Microsoft's Financial Project and Its Volatility

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MICROSOFT’S FINANCIAL PROJECT
AND ITS VOLATILITY
New York University : Stern School of Business
Professor: Robert F. Engle (rengle@stern.nyu.edu)
Class: B40.2332 Financial Theory II
Students:
Jay Gurkan (cg1368@nyu.edu) Stern(MBA)/Law (J.D) ‘12
Jessica Gonzales (jg1174@nyu.edu) Stern (MBA) ‘11
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I. Historical Analysis:
A. Business:
Microsoft is an American multinational company that is specialized in the
computer technology, software’s and computer games. Microsoft
dominated the home computer’s software industry with their most popular
software called Windows after they invented MSDOS in the 1982. The
latest polls show that every 8 out of 10 computer in today’s world has
Windows as an operating system. One of the most popular software’s that
Microsoft ever created were Microsoft Office as well as operating system
Windows along with some computer games. Microsoft has been accused of
monopoly few times in the history but U.S Justice Department and others
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have ruled against Microsoft for these violations. The owner of the
Microsoft is known as Bill Gates and he’s known as richest man in the
world for past 11 years according to Forbes Magazine. Following the
launch of the Altair 8800, William Henry Gates III, (known as Bill Gates)
called the developers of a new microcomputer, Micro Instrumentation and
Telemetry Systems (MITS), offering to demonstrate an implementation of
the BASIC programming language for the system. After the demonstration,
MITS agreed to distribute Altair BASIC.[16] Gates left Harvard University,
moved to Albuquerque, New Mexico where MITS was located, and
founded Microsoft there. The company's first international office was
founded on November 1, 1978, in Japan, titled "ASCII Microsoft"[17]
[18]

(now called "Microsoft Japan").[16] On January 1, 1979, the company
moved from Albuquerque to a new home in Bellevue, Washington.[16]
Steve Ballmer joined the company on June 11, 1980, and later succeeded
Bill Gates as CEO.[16]
Among preIBMPC products were the software package TASC (The
AppleSoft Compiler), which compiled a BASIC program into Apple
machine language, and the hardware product Microsoft Softcard, an add
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on Z80 processor card for the Apple II and compatible computers which
allowed the use of the CP/M operating system instead of Applesoft and
Apple DOS. In 1980, Microsoft entered the operating system business with
its own version of Unix, called Xenix, which it licensed to various computer
vendors. In 1995, Microsoft released Windows 95, a new version of the
company's flagship operating system which featured a completely new
user interface, including a novel start button; more than a million copies of
Microsoft Windows 95 were sold in the first four days after its release.[34]
The company also released its web browser, Internet Explorer, with the
Windows 95 Plus! Pack in August 1995 and subsequent Windows versions.
[38]
On, May 26, 1995, following Bill Gates's internal "Internet Tidal Wave
memo",[39] Microsoft began to redefine its offerings and expand its
product line into computer networking and the World Wide Web. On
August 24, 1995, it launched a major online service, MSN (Microsoft
Network), as a direct competitor to AOL. MSN became an umbrella service
for Microsoft's online services.[16]
[34]
[40]
The company continued to
branch out into new markets in 1996, starting with a joint venture with
5
NBC to create a new 24/7 cable news station, MSNBC.[34]
[41]
Microsoft
entered the personal digital assistant (PDA) market in November with
Windows CE 1.0, a new builtfromscratch version of their flagship
operating system, specifically designed to run on lowmemory, low
performance machines, such as handhelds and other small computers.[42]
Later in 1997, Internet Explorer 4.0 was released for both Mac OS and
Windows, marking the beginning of the takeover of the browser market
from rival Netscape. In October, the Justice Department filed a motion in
the Federal District Court in which they stated that Microsoft had violated
an agreement signed in 1994, and asked the court to stop the bundling of
Internet Explorer with Windows.[16]
The year 1998 was significant in Microsoft's history, with Bill Gates
appointing Steve Ballmer as president of Microsoft but remaining as Chair
and CEO himself.[16] The company released Windows 98, an update to
Windows 95 that incorporated a number of Internetfocused features and
support for new types of devices.[16] On April 3, 2000, a judgment was
handed down in the case of United States v. Microsoft,[14] calling the
company an "abusive monopoly"[43] and forcing the company to split into
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two separate units. Part of this ruling was later overturned by a federal
appeals court, and eventually settled with the U.S. Department of Justice in
2001.
In 2001, Microsoft released Windows XP, the first version that
encompassed the features of both its business and home product lines.
Before XP was released, Microsoft had to maintain both the NT and the 9x
codebase. XP introduced a new graphical user interface, the first such
change since Windows 95.[16]
[44]
In late 2001, with the release of the Xbox,
Microsoft entered the multibilliondollar game console market dominated
by Sony and Nintendo.[16] Microsoft encountered turmoil in March 2004
when antitrust legal action was brought against it by the European Union
for abusing its current dominance with the Windows operating system (see
European Union Microsoft antitrust case), eventually resulting in a
judgment to produce new versions of its Windows XP platform—called
Windows XP Home Edition N and Windows XP Professional N—that did
not include its Windows Media Player, as well as a fine of €497 million
($613 million)
On June 27, 2008, Bill Gates retired from dayto day activities in the
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company, following a two year transition period from his role as Chief
Software Architect, which was taken by Ray Ozzie, but remained the
company's chairman, head of the Board of Directors and would act as an
adviser on key projects.[47] Windows Vista, released in January 2007, was
Microsoft's latest operating system and had sold 300 million copies by
December 2008.[48] Microsoft Office 2007, released at the same time,
features a "Ribbon" user interface which is a significant departure from its
predecessors. Relatively strong sales of both titles helped to produce a
record profit in 2007.[49]
Microsoft announced on February 21, 2008 that it will share information
about its products and technology to make it easier for developers to create
software that works with its products.[50] and followed that up by
providing such information.[51] However, the European Union continued
to demonstrate its dissatisfaction with the company for its lack of
compliance with the March 2004 judgment and subsequently, on February
27, 2008 imposed a fine of €899 million ($1.4 billion), then the largest fine in
the history of EU competition policy.[52]
In its January 2009 report of financial results, Microsoft announced
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layoffs of up to 5,000 employees in response to slowing economic activity
due to the ongoing financial crisis.[53] Despite this, on February 12, 2009,
Microsoft announced its intent to open a small chain of Microsoftbranded
retail stores. David Porter, a former executive at WalMart and
DreamWorks, was named corporate vice president of Retail Stores.[54]
[55]

On October 22, 2009 the first retail Microsoft Store open in Scottsdale,
Arizona, the same day Windows 7 was officially released to the public.
Microsoft focused on refining Vista with ease of use features and
performance enhancements with Windows 7, rather then a large reworking
of Windows. This division produces Microsoft's flagship product, the
Windows operating system. It has been produced in many versions,
including Windows 3.1, Windows 95, Windows 98, Windows 2000,
Windows Me, Windows Server 2003, Windows XP, Windows Vista,
Windows Server 2008, Windows 7 and Windows Server 2008 R2 . Almost
all IBM compatible personal computers come with Windows preinstalled.
The current desktop version of Windows is Windows 7. The online service
MSN, the search engine Bing (formerly Windows Live Search and MSN
Search)[6], the Windows Live family of products and services[4], the cable
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television station MSNBC and the Microsoft online magazine Slate are all
part of this division. (Slate was acquired by The Washington Post on
December 21, 2004.) At the end of 1997, Microsoft acquired Hotmail, the
most popular webmail service, which it rebranded as "MSN Hotmail" and
later "Windows Live Hotmail". In 1999, Microsoft introduced MSN
Messenger, an instant messaging client, to compete with the popular AOL
Instant Messenger. Alongside the release of Windows Vista, MSN
Messenger became Windows Live Messenger.[9]
Microsoft Visual Studio is the company's set of programming tools and
compilers. The software product is GUIoriented and links easily with the
Windows APIs. The current version is Visual Studio 2008. The previous
version, Visual Studio 2005 was a major improvement over its predecessor,
Visual Studio.Net 2003, named after the .NET initiative, a Microsoft
marketing initiative covering a number of technologies. Microsoft's
definition of .NET continues to evolve. As of 2004, .NET aims to ease the
development of Microsoft Windowsbased applications that use the
Internet, by deploying a new Microsoft communications system, Indigo
(now renamed Windows Communication Foundation). This is intended to
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address some issues previously introduced by Microsoft's DLL design,
which made it difficult, even impossible in some situations, to manage,
install multiple versions of complex software packages on the same system
(see DLLhell), and provide a more consistent development platform for all
Windows applications (see Common Language Infrastructure). In addition,
the Company established a set of certification programs to recognize
individuals who have expertise in its software and solutions. Similar to
offerings from Cisco, Sun Microsystems, Novell, IBM, and Oracle
Corporation, these tests are designed to identify a minimal set of
proficiencies in a specific role; this includes developers ("Microsoft
Certified Solution Developer"), system/network analysts ("Microsoft
Certified Systems Engineer"), trainers ("Microsoft Certified Trainers") and
administrators ("Microsoft Certified Systems Administrator" and
"Microsoft Certified Database Administrator").[9]
Microsoft offers a suite of server software, titled Windows Server System.
The Windows Server operating system for network servers is the core of
the Windows Server System line. The Systems Management Server product
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is a collection of tools providing remotecontrol abilities, patch
management, software distribution and a hardware/software inventory.
Microsoft has attempted to expand the Windows brand into many other
markets, with products such as Windows CE for PDAs and its "Windows
powered" Smartphone products. Microsoft initially entered the mobile
market through Windows CE for handheld devices, which today has
developed into Windows Mobile 6.5.3. The focus of the operating system is
on devices where the OS may not directly be visible to the end user, in
particular, appliances and cars.
The company produces MSN TV, formerly WebTV, a televisionbased
Internet appliance. Microsoft used to sell a settop Digital Video Recorder
(DVR) called the UltimateTV, which allowed users to record up to 35 hours
of television programming from a directtohome satellite television
provider DirecTV. This was the main competition in the UK for British Sky
Broadcasting's (BSkyB) SKY + service, owned by Rupert Murdoch.
UltimateTV has since been discontinued, with DirecTV instead opting to
market DVRs from TiVo Inc. before later switching to their own DVR
brand.[9]
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Microsoft sells computer games that run on Windows PCs, including
titles such as Age of Empires, Halo and the Microsoft Flight Simulator
series. It produces a line of reference works that include encyclopedias and
atlases, under the name Encarta. Microsoft Zone hosts free premium and
retail games where players can compete against each other and in
tournaments.
Microsoft entered the multibilliondollar game console market
dominated by Sony and Nintendo in late 2001,[59] with the release of the
Xbox. The company develops and publishes its own video games for this
console, with the help of its Microsoft Game Studios subsidiary, in addition
to thirdparty Xbox video game publishers such as Electronic Arts and
Activision, who pay a license fee to publish games for the system. The
Xbox also has a successor in the Xbox 360, released on November 22, 2005
in North America and other countries.[60]
[61]
With the Xbox 360, Microsoft
hopes to compensate for the losses incurred with the original Xbox.
However, Microsoft made some decisions considered controversial in the
video gaming community, such as releasing the console with high failure
rates, selling two different versions of the system (one without the hard
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disk drive) and providing limited backward compatibility with only
particular Xbox titles.[62]
[63]

In addition to the Xbox line of products, Microsoft also markets a number
of other computingrelated hardware products as well, including mice,
keyboards, joysticks, and gamepads, along with other game controllers, the
production of which is outsourced in most cases. As of November 15, 2007,
Microsoft announced the purchase of Musiwave, Openwave's mobile
phone music sales business
Microsoft Corporation:
• Microsoft has been founded in 1975 by Bill Gates.
• Microsoft stock goes to public in March 13, 1986.
• August 24, 1995 Windows 95, in Feb 17, 2000, Windows 2000, Oct 25,
2001 Windows XP and Jan 30, 2007 Microsoft Vista have been launched.
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• Over the past 16 years, Microsoft Research has evolved into an
organization with more than 800 researches, studying more than 55 areas
of research.
• According to Forbes Magazine, Microsoft Corporation was richest #2
corporation in the world for 9 years in a row.
• Microsoft has over 91,200 employees in the world. %48 of them are
from United States while the rest of them are from different locations in the
world.
• Microsoft’s revenue was $60.42 billion with a growth of %18; net
income was $17.68 billion with a growth of %26, their net sales were $78
billion with a %19 growth as of June 30, 2008.
• The founder of Microsoft is known as Bill Gates retires his day to day
role from Microsoft as of June 27, 2008 to devote more time to his work at
The Bill & Melinda Gates foundation.
7372 Prepackaged Software
Sic Codes: 7371 Computer Programming Services
7379 Computer Related Services, Not Elsewhere
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Classified
7373 Computer Integrated Systems Design
7389 Business Services, Not Elsewhere Classified
3577 Computer Peripheral Equipment, Not
Elsewhere Classified
2731 Book Publishing & Printing
2741 Miscellaneous Publishing
7812 Motion Picture, Video Tape Production
NAICS 511210 Software Publishers
Codes 334119 Other Computer Peripheral Equipment
Manufacturing
511130 Book Publishers
511140 Database and Directory Publishers
512110 Motion Picture and Video Production
541511 Custom Computer Programming Services
541512 Computer Systems Design Services
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541990 All Other Professional, Scientific and
Technical Services
B. Goal Clarification C. Strategies and Tactics fulfilling the Goals:
Goal #1 – To outperform their rivals in the computer industry.
Exception of year 2001 and 2002, Microsoft always had growth in
their net income. In 2001, they had negative %22 growth and in 2002, they
had negative growth of %28. Other than these consecutive two years,
Microsoft always had increase in their net income. But in 1999, Microsoft
had a record net income with %73. Everybody thought that Microsoft
would be the only company who leads the industry alone but as Steve Jobs
got back to Apple for his second term in early 2000’s, Apple had
magnificent come back with the invention of iPods. From 2001 to 2007,
Apple had more growth than Microsoft. Their invention of iPod made a big
impact Apple’s revenues as well as their net income. As of today, Microsoft
feel that Apple made a good back with Steve Jobs and they feel that they
should be get back on tracks just like they did mid 1990’s when they had no
rivals in computer industry at all. Some may accused them doing a
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monopoly in the industry but Microsoft has been extremely successful in
those years. They want to be number one and most profitable company in
the computer and software industry in the world by making new
inventions such as Xbox 360 and so on. We can say that Microsoft is on
right track because they announced that their goal was to make more than
%20 growth in 2008 and they have reached to %26 as of June 30, 2008.
Goal 2: More than 2 billions served by 2015.
In today’s home computers, every 8 computers out of 10 have Windows
as their computer system software. It is the most favorite software by far in
the world but Microsoft want to take this one step further by their
Unlimited Potential Program. Their plan is to sell $3 bundle of Windows
XP Starter Edition, Office Home and Student 2007, Windows Live Mail
Desktop and several educational products to governments in developing
nations for distribution to local students.
Their main goal is to compete against Linux even though Microsoft
has been surpassed Linux by extremely large margins. Microsoft Office is
the second most favorite software that Microsoft has and approximately all
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universities within United States have an access to this software because it
is necessary for students to use this program. This is Microsoft’s biggest
and most important plan to spread out their software’s throughout
everybody in the world. Their goal is to serve more than 2 billion copies of
software’s by 2015. “This is not a philanthropic effort, this is business,” said
Orlando Ayala who is a senior vice president at Microsoft’s emerging
segments market development group in an interview with Reuters.
Microsoft is aiming to hit 2 billion people by at the end of 2015 with
Windows, Windows Office and with so many software programs.
D. Environmental Analysis:
Economic – Recession:
One of the major problem that we are going through is a recession. We
are not fully in recession but there are some signs that we have a great
threat of recession in front of us. FED is constantly buying securities to
inject money into market to prevent us going to recession. FED is doing
everything in their power to prevent recession in United States. When there
is little money in the economy, this is known as recession. People are afraid
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to spend money because they cannot see future in terms of economy and
they don’t know what will happen in the future, therefore they demand
more exchange of their money.
Political/Legal – Monopoly & AntiTrust:
Microsoft has been accused of doing monopoly in computer industry.
Windows is extremely popular throughout the world, Windows are
favorably using by %90 of the home computer owners. In May 18, 1998,
United States Department of Justice alleged that Microsoft abused
monopoly power in its handling of operating system sales and web brower
sales. Joel Klein was the lead prosecutor for this case. In monopoly, one can
set prices artificially high because it has no serious competitors to force it to
do otherwise.
Judge Jackson stated on November 5, 1999 that Microsoft’s dominance on
operating systems and therefore it is a monopoly. Then on April 3, 2000, he
issued two part ruling: he said that Microsoft had committed
monopolization and asked Microsoft to break into two separate units as a
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remedy. One to produce the operating system and one to produce other
software components.
Therefore, Microsoft has been accused of monopoly before and they
really have to watch out for other threats in the future.
E. Competitive Analysis:
Windows:
Windows is the most popular operating system in the world. Every 8 out
of 10 home computers have a Windows as their operating system. They
announced as their first version of Windows in November 1985. One of the
most popular Windows versions are Windows 95, Windows 2000,
Windows XP and Windows XP. MAC OS came in to market before than
Windows but Windows completely took over world’s market for operating
system software. It is Microsoft’s number one and most popular software
in the world. Microsoft had even lost a case in United States because of
Windows because they have been accused of monopolized on operating
systems and judges stated that Microsoft attempted to monolopolized
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operating systems and became a threat to other operating system
companies.
Windows Office:
This is Microsoft’s second most popular software program throughout
the world. It has multiple programs inside of it such as World, Excel,
Powerpoint, Access, Groove and so on. This software is generally using at
educational venues such as universities, schools and in any industry that
has to do with publishing texts. One of the most popular Office versions
are Office 97, Office 2000, Office XP, Office 2003 and Office 2007. Even
though Microsoft sees Apple as a rival, they also announced MAC version
of Microsoft Office.
XboX:
One of the most significant invention of Microsoft is Xbox. It is
Microsoft’s first game console in the history. They came up with idea of
Xbox against Playstation and Nintendo’s Gamecube. It was released on
November 15, 2001. Microsoft announced that they have sold over 24
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million Xbox’s as of May, 2006. In same year, Microsoft stated that they had
$4 billion loss because of high selling rates. Microsoft’s strategy was to not
charge as high as it costs them to make Xbox. They thought that they could
gain their loss back from games that they would make. Therefore, they
tried to sell consoles for cheaper price than they had cost them. They
reaches their goal within 5 years and they sold more than 20 millions as of
2006 and this number is increasing every year. Microsoft think that whole
Xbox mission is a successful try.
F. Strengths and Weaknesses of the Organization
Strengths
Marketing:
• Few of their products are top seller software’s in the world such as
Windows and Microsoft Office.
• There are lots of variety and supports customers needs.
• It is extremely easy to use compared against equivalents.
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• Advertising highly and everybody who knows about computers well
know that there are software made by Microsoft exist.
• Has Windows version over 20 languages in the world and makes it
easy to use it for all people around the world.
Finance:
• Makes high net income recent years.
• Growing increases every year except 2001 and 2002.
Human Resources:
• Encourage new ideas from employees
• Has high standards and get best specialized people on their field.
• Have a positive manners because of the remarkable founder Bill
Gates
• Have employees from 113 different countries.
ECommerce:
• Easy to buy from any web site.
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• Able to find any upgrade or any versions of any software from
Microsoft.com
• More affordable when people buy it from online
• Has live chat help service that makes everything easier if a customer
has a problem or concerns about the software
Weaknesses:
Marketing:
• Doesn’t advertise often, their rivals such as Apple is catching up.
• Increase prices to increase profits and stock prices.
Finance:
• Have not reached to their growth goal in past three years.
• Rivals made a comeback and increased their growth more than
Microsoft.
• Have not reached their goal of growth in recent years.
Production and Operations:
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• Even though there are one of the most successful programs that made
by Microsoft, they are not looking for anything new like Apple. Same
software’s with new versions.
• Couldn’t come against anything spywares and popups effective.
• Crashes unexpectedly and reboot is the only way to get system back.
ECommerce:
• Official web site is slow compared to others.
• It is complex and cannot be found updates for every software out in
the market.
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II. Future Analysis
A. Future Environment:
Economic – Disposable Income:
As economy has normal yield curve, it would mean that economy will
improve in the future. Most likely, people will have more money and they
will not have any threat for either recession or inflation. When people have
no fear for future, they will be more likely to spend more money on the
things they would like to own such as luxury things. But during a
recession, just because of there’s little money circulating in the market,
people are afraid to spend money especially for things that are not
necessity.
Since most householders have a computer, during a recession time,
they would not likely to purchase a new computer, therefore, they will be
using their old version of Microsoft software’s. This is a big threat for
Microsoft as well as to other companies that are selling products other than
necessities. Once we get in good shape in the economy, people are more
willing to try new products when they can afford to take risk other than
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saving money in their checking account. This is the one of the biggest
reason why Microsoft didn’t reach their net income and net growth rate in
2008. They lowered their goals for growth and net income rate for year of
2009.
Political/Legal – AntiTrust Act:
Microsoft has been accused of monopolized the industry in 1999. Since
Microsoft hold %90 of the operating system’s software’s, they should be
more careful on their marketing strategies in the future. Even though, their
marketing net volume is decreasing in past 8 years because Apple came up
with more new innovations than Microsoft and that’s why Microsoft
started to see Apple as their new rival nowadays. As court ruled and most
people hate Microsoft because they monopolized the industry for many
years without having a competition in the industry. This made them to
charge people a price whatever they felt like it and people who are using
Linux, Apple and other companies customers hate Microsoft for doing that.
They already had a bad fame on monopolizing and not obeying antitrust
act and they should be extremely to watch out about on these issues.
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Technological – Computers are taking over:
We have computers in our lives than ever before. In today’s world,
computers are doing most of the work regardless the industry we work in.
This has many advantages such as there is less margin error about the
work, save money and saving time. But it also has a disadvantage because
it’s cutting the labor work for the country. As computers are involved in
our lives more than before, we rely on software’s more and this is where
Microsoft come in as a biggest company in that industry.
Since people are using more computers in their life, Microsoft has to
come up with new program that satisfy people’s needs. We almost use
computer in everyday in our lives such as getting train ticket from
computers to buying snacks from vendors. Therefore, we will need more
software’s in the future to use to satisfy our work.
B. Strategic Targets:
Since Microsoft is the biggest and most profitable company in software’s
industry, I think they would have money to invest more money than any
other company in that industry to improve their net sales. Even though
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they have not reached their goals of sales last year, if they come up with
new ideas to improve their sales, eventually they will be able to reach their
goals easier than any other company out there. In my opinion, Apple has a
great marketing system in United States as well as in the world. Microsoft
should take an example of Apple and do the things they do because
Apple’s growth is 4 times bigger than what Microsoft has been
accomplished.
More Microsoft Stores in Most Locations:
Just because Microsoft doesn’t build computers, it doesn’t necessarily
mean that they cannot open stores in big cities such as Miami, New York or
Los Angeles. Microsoft has variety of software’s that people need. People
usually go to big electronic stores to buy Microsoft’s software’s such as Best
Buy or Staples Center. It would be more beneficiary for Microsoft to open
up their stores in every state like Apple because as soon as someone steps
into a store, they would be aware of what a great product line that
Microsoft has and be able to find sales person to discuss what he really
needs. In big stores like Best Buy, sales people don’t really care about if
they sell any Microsoft products or not because their goal is to sell
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something. But if Microsoft has stores all over the states, their ultimate goal
would be to sell Microsoft products to consumer and help out them to
discover what they have for customers to discover.
Workshops and Tutorials:
Unlike Apple, Microsoft is not a fan of workshops. In every Apple store,
there is workshops everyday to teach Apple users what they can do with
their Apple software’s. On the other hand, Microsoft doesn’t have this
option at all. They think that to make software easier to use, most people
will eventually know how to use and how to take an advantage of the
software’s that they make. But most people that I know don’t even know
how to use any other software’s than Explorer, Office and Windows itself.
There are so many software’s to discover for Microsoft but most people
aren’t even aware of it. In my opinion, Microsoft should come to
universities and many other big cities to give out workshops to teach
people what they are missing by not know how to use it. This is what
Apple does and they came to Hofstra University for workshop last year, for
example.
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Other thing that Microsoft doesn’t do is that their web site is not
helpful as Apple. Once we go to Apple’s web site, there are lots of tutorials
about Apple’s software’s as well as iMacs. But Microsoft web site is more
complex than Apple’s web site and it’s more confusing. As soon as people
go to web site, they cannot find any tutorials to find out about any software
are that Microsoft created.
C. Implementations:
2005:
Microsoft should aim big cities in United States as of their first step. The
cities should include New York, Orlando, Boston, Chicago, Los Angeles
and so on. They should not have more than ten stores to see if this really
works out and help to increase their sales by big margins.
2006:
Microsoft has been successfully opened ten stores in United States with
lots of variety of software’s programs as well as of their whole full product
line. They were able to see that they wouldn’t lose any money by opening
new stores in United States because people are willing to buy their
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products. They should aim to increase their store numbers by 3 in the
second year. This will be big step for Microsoft because at the end of 2006,
they should be around 30 or more stores in the United States and after this
year, numbers should give an exact answer to Microsoft if opening stores
all over the United States really helps them.
2007:
Microsoft has opened over 30 stores all over the United States and they
didn’t lose money at all. People come to stores to buy products and they
are doing well in overall. They should add new features to their stores to
get more attention to their stores. They would set up workshops to tell
people how to use Microsoft’s software’s throughout the United States.
Since most people don’t know how to use most programs that Microsoft
made, it would be smart idea to teach them what Microsoft has more than
Microsoft Office and Explorer.
People would come to Microsoft stores not to buy software’s only but
to learn also. They learn what they have been missing out by having
Microsoft Windows.
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2008:
Microsoft successfully created over 50 stores around the world and
they should be increasing their store number by two every year. Now, they
have been doing workshops every day in their stores and people actually
have a habit to come to stores to learn new tricks and software’s that
Microsoft has. They see an increase in net sales as of 2008 and understand
what people exactly want from Microsoft. The idea of opening stores all
over the United States is not a bad idea. This makes Microsoft to increase
their number of stores within the United States as well as doing more
workshops at the stores.
2009:
Microsoft now has over 100 stores in United States and at least one
store in every state. They now know that stores help to increase their net
sales and profits by large margins. They have workshops in every stores
that they have and they see people attending to their workshops. Their
mission now is to go to colleges to give workshops and let students know
that what they can do with Microsoft software’s and how they can help
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themselves using Microsoft in their education. Other goal that Microsoft
has that they should be going to Europe to open up stores.
2010:
Microsoft has been created stores in big countries in Europe such as
Italy, Spain, England, France, Germany and Turkey and now they have
over 200 stores in United States as well as having 6 stores in Europe.
Workshops have been a big success because it actually made people to buy
Microsoft products because they know that they can do with it. Their net
sales almost tripled compared to years when they didn’t have stores.
REFERENCES
1) http://www.microsoft.com/MSFT/DEFAULT.MSPX
2) http://www.microsoft.com/presspass/inside_ms.mspx
3) http://research.microsoft.com/aboutmsr/presskit/MSResearchFS04
.aspx
4) http://msdn.microsoft.com/enus/esp/cc824927.aspx
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5)_ http://msdn.microsoft.com/enus/esp/cc824927.aspx

6) http://www.iht.com/articles/2005/11/15/yourmoney/msft.php

7) http://en.wikipedia.org/wiki/Microsoft

8) http://en.wikipedia.org/wiki/United_States_v._Microsoft

9)
http://www.wikipedia.ws/wikipedia/mi/Microsoft_antitrust_case.html
10) http://www.eksisozluk.com/microsoft

11)
http://www.knowledgerush.com/kr/encyclopedia/Microsoft_antitrust_c
ase/
12) http://news.cnet.com/21001001975656.html

13) http://www.microsoft.com/msft/financial/default.mspx

14)
http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?
symbol=us%3Amsft
36
15) http://finance.google.com/finance?fstype=bi&q=NASDAQ:MSFT

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