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Introduction 1.1 Profile 1.2 Products: 1.3 Business Division 1.4 Entertainment And Devices Division 1.5 History Of Software Industries Porter Five Force Analysis SWOT Analysis Of Microsoft Corporation Strategies Followed (1975 2009) 4.1 Microsoft's International Strategy Entry Mode 4.2 Changes In Microsoft's International Strategy Entry Mode 4.3 Stages In The Industry Life Cycle International Business-Level Strategy 5.1competing With Products And Standards 5.2 Defining Products And Development Processes 5.3 Developing And Shipping Products International Corporate-Level Strategies 6.1 Global Strategy 6.2 Diversification Strategy: Related Diversification Conclusion
CHP-1 INTRODUCTION
Microsoft Corporation (NASDAQ: MSFT and NYSE: MSFT) is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions. Established on April 4, 1975 to develop and sell BASIC interpreters for the Altair 8800, Microsoft rose to dominate the home computer operating system market with MS-DOS in the mid-1980s, followed by the Microsoft Windows line of operating systems. Microsoft would also come to dominate the office suite market with Microsoft Office. The company has diversified in recent years into the video game industry with the Xbox and its successor, the Xbox 360 as well as into the consumer electronics and digital services market with Zune, MSN and the Windows Phone OS. The ensuing rise of stock in the company's 1986 initial public offering (IPO) made an estimated three billionaires and 12,000 millionaires from Microsoft employees (Forbes 400 list revealed that in March 2011 both Jon Shipley and Nathan Myhrvold lost their billionaire status). In May 2011, Microsoft Corporation acquired Skype Communications for $8.5 billion dollars. Primarily in the 1990s, critics contend Microsoft used monopolistic business practices and anticompetitive strategies including refusal to deal and tying, put unreasonable restrictions in the use of its software, and used misrepresentative marketing tactics; both the U.S. Department of Justice and European Commission found the company in violation of antitrust laws. Known for its interviewing process with obscure questions, various studies and ratings were generally favorable to Microsoft's diversity within the company as well as its overall environmental impact with the exception of the electronics portion of the business.
1.2 Products:
For the 2010 fiscal year, Microsoft had five product divisions: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division. Windows & Windows Live Division, Server and Tools, Online Services Division The company's Client division produces the flagship Windows OS line such as Windows 7; it also produces the Windows Live family of products and services. Server and Tools produces the server versions of Windows, such as Windows Server 2008 R2 as well as a set of development tools called Microsoft Visual Studio, Microsoft Silverlight, a web application framework, and System Center Configuration Manager, a collection of tools providing remote-control abilities, patch management, software distribution and a hardware/software inventory. Other server products include: Microsoft SQL Server, a relational database management system, Microsoft Exchange Server, for certain businessoriented e-mail and scheduling features, Small Business Server, for messaging and other small business-oriented features; and Microsoft BizTalk Server, for business process management. Microsoft provides IT consulting ("Microsoft Consulting Services") and produces a set of certification programs handled by the Server and Tools division designed to recognize individuals who have 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"). Microsoft Press, which publishes books, is also managed by the division. The Online Services Business division handles the online service MSN and the search engine Bing. As of December 2009, the company also possesses an 18% ownership of the cable news channel MSNBC without any editorial control; however, the division develops the channel's website, msnbc.com, in a joint venture with the channel's co-owner, NBC Universal.
companies under the Microsoft Dynamics brand. These include: Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, and Microsoft Dynamics SL. They are targeted at varying company types and countries, and limited to organizations with under 7,500 employees.[57] Also included under the Dynamics brand is the customer relationship management software Microsoft Dynamics CRM, part of the Azure Services Platform.
At Microsoft, our vision and values are to help people and businesses throughout the world realize their true potential.
Online Services This division competes with: AOL, Google, Yahoo and a wide ray of Web sites and portals that provide content and online offerings of all types to end users. Microsoft compete these organization to provide advertising opportunities for merchants. Entertainment & Devices Microsoft Xbox hardware business competes with console platforms from Nintendo and Sony, both of which have large, established base customers. The life cycle for video game consoles averages five to seven years.
Microsoft is a huge global brand. It is recognizable for two main reasons. It was one of the largest software developers it has developed a customer base of around 30 million people. It has built its reputation on the successful development of its computer softwares namely the Windows line of products. Brand is all-important. Microsoft is one of the most established and healthy IT brands in the World, and has a very loyal set of enthusiastic customers that advocates and uses the brand. With loyal customers, it means that Microsoft does not only recruits new customers but retains old ones. The company is composed of different main offices inside the United States and around the globe making the distribution and development of its products easily accessible to the consumers. It has its offices in Germany, United Kingdom and Europe and sub offices in countries such as China, France and Korea.
WEAKNESSES:
Microsoft lacks a solid client and service support center on the internet. This is important since problems and bugs with regards to their products must be fix rapidly to attain efficiency. The lack of a customer service center would erode the integrity and quality perceived by costumers on Microsoft products. Microsoft products have compatibility issues with other hardwares and softwares manufactured by other companies. This compatibility issue would then limit the ability of the customer to buy all products made by Microsoft since it would affect the stability and performance of a computer. Microsoft does not share the programming codes of its softwares making modification difficult if bugs and other malfunctions are detected by programmers not affiliated to the company.
OPPORTUNITIES:
Microsoft moved into the Chinese market by producing computer programs based on the Chinese language and giving discretionary authority to the Chinese government to censure and to eaves drop on emails, documents and webpage. Microsoft has also diversified its products. During the past years the company has ventured into fields such as game design, game developing and publishing and the production of game consoles such as the Xbox.
The company has also branched out to provide free email and news services to its costumers. It has also developed softwares and computer programs that is vital in organizing business spreadsheets and data.
THREATS:
The success of Microsoft in software development has spawned other competitors to follow the footsteps of the company towards success. The primary competitor of the company in the operating systems industry is the Linux program developed by independent programmers. This program is easy to use and can be obtain free of charge. Since the company is diversifying in other fields it competes its products with the products being made by companies who have been experts in their chosen industry. The company might eventually lost its battles in making its products competitive when put side by side with products made by corporations which has established their name and reputation to the customers. Another threat that is being faced by Microsoft is the different lawsuits and indictments against the company being made by independent companies, programmers and software developers. These lawsuits do not only exhaust the financial resources of the company but it also promotes negative publicity and bad public image.
4.1 Microsoft's international strategy entry mode The reason why Microsoft wanted to go international was, they were leaders in domestic market and they want to increase their market size. They wanted to take advantage of other growing markets around the world. Being a leader in OS business, they wanted to take first mover advantage by entering in new markets before competitors, and maintain their competitive advantage. Initially they followed licensing and strategic agreements as an entry mode International Strategy. There are many reasons why they go for this kind of strategy, some of these are Involves low cost to expand internationally, as there is low cost of development. Allows licensee to absorb risks, less amount of risks because of risk sharing approach. But there are some disadvantages also, as This strategy has low control over manufacturing and marketing It offers lower potential returns, as they are shared with licensee and because of inability to realize location and experience curve economies. Involves risk of licensee imitating technology and product for own use, i.e. lack of control over technology. Again there more restrictions on the licensing from US government and from Customer approach. Also because of antitrust regulation in the US, EU and because of the competition in the desktop software industry, they decided to change their strategy.
4.2 Changes in Microsoft's international strategy entry mode Companies both International Business level strategies and international corporate level strategies depends on its entry mode strategy. There industry life cycle shows they are now in shakeout zone of industry life cycle.
a traditional software provider to a broader technology services and media company, Microsoft tried to position its OS, Software's and Services as a de facto standard for accessing, communicating, and doing business over the internet. This helps them to enter in new market segments while maintaining current operational excellence. Hence they go for related diversification strategy and by the end of year 2005 they have three main divisions under their OS division.
platform and market, speak a common language on a single development site, continuously test the product as you build it, use metric data to determine milestone completion and product release. Building a Learning Organization Microsoft in its early years was not known for self-critique. The firm today has so clearly accepted a new position on this point that critique has become one of their key strategies. Information-sharing is now important - both as between the marketplace and the firm, and as between various functions within the firm. . Organizing and Managing the Company The firm, from the beginning, has continuously sought, and employed, such people and can thus immediately spot (and grasp) opportunities when they appear. It has hired managers who are competent in technology as well as understanding the business situation, and hence they are highly effective in implementing solutions for their customers. These people have constituted the managers at different levels in the organization. Managing Creative People and Technical Skills Microsoft usually formed small teams to handle projects, with cross-functional specialists, who could easily switch from one function to another, giving them a wider range of reach and productivity and creativity. Go To Market To compensate for less-frequent product launches and to focus on integrated solutions rather than specific products, Microsoft organized its marketing efforts around annual "go-to-market" (GTM) campaigns. GTMs focused Microsoft and its partners on short-term strategic challenges and provided consistent marketing approaches for most of its business products. Partners could align their products or services with Microsofts GTMs to benefit from these campaigns. However, while GTMs were intended to make Microsofts message to the marketplace more focused and coherent, their short-term focus and vagueness meant partners would take time to understand their benefits.
CONCLUSION
Microsoft with its apparent success in the present must face problems that will be evident in the near future. Although Microsoft is a leading company in its chosen field of software industry, the dominance and the monopoly that it enjoys can be erased and its dominance in the market can be eclipsed by other new companies in the industry. The paper has identified several problems inherent to the company and have highlighted the effects that these negatives factors will bring on the over all stability of the company in the future. Problems such as poor designs, the challenge of other competitors like Linux and tightening government control are some of the hindrances that will eventually obstruct Microsoft in its road to progress. To eliminate and to diminish the impact of these problems and difficulties, the company must undertake needed reforms and initiate policies that will improve certain aspects of the company.