Management Strategies of Microsoft - Case Study Example

Microsoft Table of Contents Introduction 3 Brief of Microsoft 3 History 3 Importance of the study 3 Discussion 4 Management strategies ofMicrosoft 4 Evaluation of the main product of Microsoft by SWOT 7 Suggestion 9 Evaluation of the main product of Microsoft By Matrix 10 Evaluation of the main product of Microsoft by Porter’s five forces 11 Suggestion 12 Comparison of Microsoft with Macintosh 12 Conclusion 13 References 14 Introduction Brief description of Microsoft Microsoft Corporation is recognized as one of the primary and largest software organization in the entire globe. It came into limelight in the year 1975 with the collaborated help of William Gates and Paul Allen. As a result of which, just within 10 years, the organization of Microsoft positioned itself as a multibillion company among many other rival players in the market. This acted as a boon for the organization that increased its net income and revenue by $ 3.45 billion and 11.36 billion. History The organization of Microsoft Corporation is developed by Bill Gates, after passing out from the University of Harvard at an age of 19 years. Along with this, a best friend of Bill Gates, Paul Allen paired up with him in order to sell the programming language, BASIC. Then, in the year 1979, Gates transferred Microsoft to Seattle and started manufacturing software’s. After developing software’s for a certain period of time, he started developing personal computers, so as to ease the works. Other than this, then, the organization of Microsoft is also hired by IBM in order to write the operating system for the new machines among others. This helped the organization to improve its brand image and reputation in the market among other rival players. As a result of which, very soon, Mr. Gates became the first billionaire in the entire globe (Thurrott, 2001). Importance of the study This research paper mainly deals about the company analysis of Microsoft Corporation. Along with this, the paper also includes the management strategies implemented by the organization of Microsoft Corporation so as to improve its position and dominance in the market. It also includes analysis of the features of its main product, Windows with the help of various analytical tools such as Matrix, five forces, Swot. Other than this, this paper also includes a brief comparison with Macintosh, its biggest competitor. Discussion Management strategies of Microsoft In order to improve the dominance and position in the market, the organization of Microsoft implemented varied types of management strategies and policies. Some of them are presented below: Acquisition or merger strategy- The organization of Microsoft decided to merge and acquire different companies and organizations. Such type of strategy is taken by Microsoft in order to enhance its leadership in the field of innovation and credibility. By doing so, it might enhance the level of awareness of the customers that may improve its sustainability and competitive advantage in the market among others. However, in order to do so, the organization of Microsoft Corporation joined hands with IBM in the year 1984. This helped the organization to develop a new operating system named OS/2. With the help of this operating system, the organization became able to manufacture Microsoft Windows as well as a graphical extension for MS-DOS. Furthermore, after joining hands with IBM, Microsoft released numerous office applications such as Microsoft Excel, Microsoft Word and many others. Making computer more easier to hear, use and see- in order to increase the total sales and market share of the organization of Microsoft, it launched Windows 3 version in the year 1990. This invention streamlined the use of interface graphics and also improved the protected mode abilities. This improved the performance as well as supremacy of the products of the organization of Microsoft within the minds of the customers that enhanced its brand value and demand by 50 percent as compared to others. After inventing Windows 3 version, it introduced numerous versions, such as Windows XP in 2001, Windows 7 and then Windows 8. This helped the organization to retain its supremacy in the market among other rival contenders. Furthermore, due to the invention of these above mentioned latest versions, the position and brand image of the organization of Microsoft improved to a significant extent as compared to others. This proved extremely effective for the organization of Microsoft that improved its market share and demand of its products as presented by the below graph. (Source: Thurrott, 2001). Developing products with extra-ordinary technologies and features- in order to ease the work of businesses or office, the organization of Microsoft Corporation developed Microsoft Office. Along with this, the organization also introduced Microsoft Notes, Microsoft Power Points etc so as to make varied types of presentations. Moreover, for accounting firms, the organization developed, Microsoft excel. However, in order to cope up with the changing requirements and demands, the organization of Microsoft used to upgrade the systems. This helps the organization of Microsoft to respond to the changing market challenges and other business risks. As a result, the reputation and equity of the organization enhances by almost 67 percent as compared to other rival contenders (Grant, 2005). Improvement of competitive position in the market through strategic alliances- by collaborating with varied types of technology providers and organizations, Microsoft became successful in developing CPM OS that is used within the personal computers of IBM. Moreover, the organization of Microsoft also introduced new versions of OS that attracted a wide range of new customers that improved its distinctiveness in the market as presented below. Market Share of OS (Source: Thurrott, 2001) Therefore, due to the implementation of the above mentioned strategies, the organization of Microsoft Corporation improved its profitability and revenues. Analysis Evaluation of the main product of Microsoft by SWOT The organization of Microsoft became successful in developing dominant software’s named Windows that improved the brand image and popularity in the market among others. Introduction of this software also helped the organization to attract a wide range of customers of varying age-groups and income profiles. As a result, the net revenue and competitiveness increased by 74.3 $. Moreover, the evaluation of Windows is also judged with the help of an analytical tool named SWOT analysis. It is presented below: Strengths of Windows- Strong brand identity- the brand identity of Windows is quite high in the market that improved the demand and brand image of the organization. As a result of which, the net revenue and total sale of the organization increased by almost 50 percent as compared to before. This became possible mainly due to the attraction of wide range of customers of varied income groups (Luo & Tung, 2007). Number 1 operating system in the entire world- Windows is recognized as one of the most renowned and popular operating system in the entire globe. This marked the development and enhancement of the net income and identity of the organization in the market among other existing contenders. Best software for consumers and professionals- Windows is recognized as one of the best software for the individual engaged in varied types of professions such as accounting, business, CV writing work etc. This helped the organization of Microsoft to enhance its profitability and market share by $ 72.1 billion. Competitive pricing- competitive pricing strategy also proved extremely effective for the organization of Microsoft that improved its brand image and identity in the market among others. As a result, the position and reliability of the brand improved that retained its sustainability for a long run (Mathews, 2002). Weaknesses- Low level of up-gyration- due to low up-gration of the software of Windows, the level of dependency and reliability is becoming fader and fader. This is one of the prime cause for which, the organization of Microsoft is reducing its image and equity in the market among others. Unsecured Operating System- as compared to Linux, the operating system of Windows is considered quite unsecured. This is also another important cause that reduced its demand and equity in the market. As a result, the rate of profitability and net income of the organization is also reducing day by day. Slow adaption of the new iterations of Windows- another important weakness of Windows is slow adaption of new iterations. This reduced its reliability and dependency in the market among others. Due to these weaknesses, the fame and position of the organization of Microsoft is reducing at a rapid rate as compared to many other rival players. Opportunities- Launch of updated windows versions- introduction of new versions of Windows such as Windows 7 and Windows 8 attracted a wide range of customers of varied professions. This helped the organization to improve its position and brand image in the market as compared to many other rival players. Moreover, due to the introduction of such type of updated Windows versions, the reliability and dependability of the organization within the minds of its target customers enhanced. As a result, its market share and net revenue increased by $ 72.1 billion in the year 2012. Implementation of new technologies- introduction of new technologies proved extremely useful for the organization in amplifying its brand image and position in the market. Beating XP in performances- introduction of Windows 7 proved extremely effective for the organization of Microsoft as compared to XP due to its updated techniques and methods. This acted as a boon for the organization that improved its demand and customer awareness as well. Presence of new security features such as ‘Windows Action Center’ – presence of Windows action center as a sort of security feature proved extremely effective for the organization of Microsoft. This amplified its profitability and market value to a considerable extent (Grant, 2005). Threats- Fast changing technology- as technology is changing at a rapid pace, so it becomes extremely problematic for the organization to retain its supremacy in the market. However, in order to do so, it’s extremely essential to perform effective up-dation of the techniques and features of the products. Only then, the product might retain its portfolio and demand within the minds of the customers in long run. Change-over of the preferences of the customers from personal computers to mobiles- this is also recognized as one of the biggest threat for Microsoft. In order to overcome the threat, the organization might try to introduce products with mobile version so as to retain its dominance in the market (Pcubed, 2013). Suggestion Thus, from the above mentioned SWOT analysis, it might be revealed that, in order to remain effective in the market, the organization of Microsoft need to undergo frequent up-dation of the features of Windows. Evaluation of the main product of Microsoft By Matrix Ansoff matrix of Windows New versions of Windows such as Windows Vista, Windows 7 and Windows 8 are launched to penetrate new markets. This is recognized as a business strategy of the organization of Microsoft. Windows 7 is developed by Microsoft to up-date the requirements and demands of the customers Market development is also possible due to the introduction of more secured versions of Windows as compared to Linux Diversification of Gaming software: XBOX 360. Therefore, from the above graph, it might be clearly revealed that, in order to retain its image in the existing markets, up-dation is extremely essential. Keeping this fact in mind, the organization of Microsoft introduced various versions of Windows such as Windows 7, Windows 8, Windows Vista and many others (Thurrott, 2001). By doing so, the changing demands of the customers might be satisfied that may improve the demand of the products of Microsoft as compared to Macintosh or Apple Inc (Porter, 2008). Due to these reasons, it is recognized as a strategic policy of the organization of Microsoft to retain its supremacy among its competitors. Moreover, Microsoft Corporation might try to offer more secured versions of Windows as compared to Linux so as to retain its dominance in the emerging and new markets like US and European markets. The organization of Microsoft also developed new product versions in order to attract new customers and retain the existing ones. Furthermore, in order to maintain the distinctive competitive position and image in the market, the organization of Microsoft diversified to gaming segment by introducing XBOX360 software. This proved extremely effective for the organization of Microsoft in maintaining its net income and total sales. Evaluation of the main product of Microsoft by Porter’s five forces Porter’s five forces comprises of five elements that may be used to judge the position of Windows in the market among others. Bargaining power of the buyers- the bargaining power of the buyers is extremely high in this age of competitiveness (ESOMAR, 2008). This is mainly due to the presence of wide range of brands with exclusive features and software’s such as Macintosh, Apple Inc. Therefore, in order to retain the image and portfolio of the organization of Microsoft, it needs to offer highly advanced technologies within its software’s. Along with this, the organization needs to up-date the older versions with new features so as to fulfill the changing requirements of the customers. Only then, the customer might remain more loyal and dependable over the brand. Bargaining power of the Suppliers- due to the presence of numerous suppliers, the bargaining power is also extremely high. As a result, the organization of Microsoft needs to act according to the demands of the suppliers in order to attain their required products and materials (Drummond & Ensor, 2006). Threat of substitute products- the threat of substitute product in the segment of computer software’s is quite high as compared to many other segments. As a result, the organization of Microsoft need to up-date its software’s very effectively in order to improve its demand and reliability within the minds of the customers. Threat of new entrants- the threat of new entrants is also quite high. Therefore, in order to retain the supremacy and image in the market, the organization of Microsoft introduced various versions such as Windows Vista, Windows XP, Windows 7 and others. This strategy proved effective for the organization in amplifying its total sales by almost 70 percent as compared to previous years. Competitive rivalry- the level rivalry among the rival players is quite high in the segment of software’s. As a result, it’s extremely essential to continuously up-date the existing products with innovative features to retain the competitive advantage in the market. This might also reduce the rate of switch over costs of the customers thereby amplifying the profitability and productivity of the organization of Microsoft (Bradley, 2007). Suggestion Therefore, it might be clearly revealed that up-dation or diversification to new segments is extremely essential for the organization of Microsoft in order to retain its dominance in the market. Comparison of Microsoft with Macintosh Macintosh is the leading software manufacturing organization just as Microsoft Corporation. Mac computers are manufactured by Apple Inc and it’s the biggest competitor of Microsoft. This is because; it is one of the most brands of computers that run on the operating systems like Mac OS X, Windows XP, and Vista. These operating systems are much more secured as compared to the operating system of Windows. In spite of insecurity in operating system, the IBM computers utilize only Windows of Microsoft. This is one of the causes that reduced the fame and status of Windows in the market as compared to Mac OS X or Mac- computers (Diffen, 2014). Thus, it might be clearly revealed that due to the presence of varied types of operating systems, the demand of Apple or Mac computers is quite high as compared to Windows Conclusion Conclusively, it might be stated that up-dation or introduction of new features or products is extremely essential in this age. This might prove effective for the organization to retain its portfolio and brand image in the market among other rival players. Similarly, the organization of Microsoft need to introduce varied types of new operating systems such as Windows XP, Windows 7, Windows 8 and many others in order to retain its customers and brand value. By doing so, the net income and profitability of the organization of Microsoft might get enhanced to a significant extent among others. Along with this, implementation of such types of strategies might also prove effective in attracting a wide range of customers that may improve its net income and profitability among others. Moreover, the rate of sustainability and competitiveness of the organization might also get improved in the market that may reduce its business challenges and market risks to a considerable extent. So, implementation of such a strategy proved extremely effective for the organization of Microsoft. References Bradley, N. (2007). 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