Global Marketplace Impact on Microsoft: International Business Theories and Strategies

This report discusses the impact of global trade on Microsoft and how it uses international business theories and strategies to gain a competitive advantage. It covers PESTLE analysis, value chain analysis, and recommendations for Microsoft to create an innovative culture and improve its investments and acquisitions.

The Global Marketplace

Table of Contents
TASK 1............................................................................................................................................2
International Business Theories...................................................................................................4
Government Influences on Trade.................................................................................................4
TASK 3............................................................................................................................................4
Strategy........................................................................................................................................4
2. Value Chain in relation to Microsoft.......................................................................................5
3. Microsoft: Globally Integrative, Locally Responsive – or both?............................................5
RECOMMENDATIONS.................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
This report is for newly appointed managers and briefly covers the significance of global trade
and its impact on Microsoft as well as models that help it to gain a competitive advantage.
Moreover, there will be a brief discussion on international business strategy and
recommendations will also be provided.
TASK 1
International trade helps organisations to innovate, grow faster, improve productivity, and give
greater income as well as more opportunities to their staff (Medicherla et al., 2022). To
elaborate, global trade:
 Helps increase business opportunities: It positively impacts the organisation as it can
increase the business at other locations also where it gets skilled and talented
employees for operating business activities, adopting different cultures and traditions at
the workplace for effective results.
 Leads to the creation of dual economies: Especially within underdeveloped countries
that hope to develop their exporting sector. This brings a positive impact on the country
as well as the organisation to enhance business opportunities
That said a PESTLE analysis can help understand the external environment that an organisation
operates in better argues (Bruin, 2016). For example:
FACTOR ISSUE
Political COVID-19 guidelines impact business operations (Meitei et al.,2021).
Environment EDF supplies solar energy that creates less pollution, bringing a positive
impact to organisations (Ledenyov & Ledenyov, 2015).
Social More employment opportunities are being created within the energy and

services sector.
Technological Advanced technologies are constantly required.
Economic Increasing interest rates has made it challenging for companies to boost
their global presence.
Legal Legislations should be adhered to create a good brand image.
International Business Theories
Their a several business theories which explain why international relationships and trade can be
useful for the economy.
 Absolute Advantage (Learn, 2020): This is based on the notion to increase efficiencies
within production processes and was introduced by Adam Smith in 1776. The introducer
expresses that product manufacturing with great efficiency in comparison to other
countries at the global level is greatly advantageous. If the UK has an absolute
advantage over one another in producing a product, then it concentrates on all its
resources to create that product which benefits the whole world.
 Comparative Advantage (Comparative Advantage and the Benefits of Trade, 2019):
This theory favours relative productivity. According to this concept, a country with
maximum ‘absolute advantage’ in comparison to others can still trade with another
country with less effective approaches to create a product that is readily available, to
boost productivity. This kind of international business theory introduces opportunity
cost as a determinant to analyse for choosing among different opinions for production.

Government Influences on Trade
The government’s trade policy impacts EDF operations by making it easier for a respective
organisation to trade throughout international borders. (Medhat et al., 2021).
TASK 3
Strategy
Strategy refers to a carefully developed plan to attain the objectives or skills in developing as
well as undertaking such a method (Tucci, 2022). It is important for an MNE (such as Microsoft)
because it helps the organisation in defining its business and provides a set of values as well as
gives it purpose.
Strategies are often built on a companies: mission, vision, objective setting, and resource
allocation (Ahmed, 2019). It is significant to have a vision or mission because it defines the
purpose of business and develops a sense of belonging and recognition among employees.
With that in mind, the vision of Microsoft is to facilitate people as well as businesses across the
global world to realise their full potential. (Baucells & Maiden, 2020). Microsoft tried to
implement this vision in its mission statement, which is to empower everyone as well as an
organisation on the planet for attaining more.
That said, Microsoft creates value for users through its Software and hardware (Microsoft,
2022). The willingness of the company is to partner with competitors that permit it to create a
great influence and value for developers as well as end-users.
2. Value Chain in relation to Microsoft
The value chain analysis of Microsoft covers a wide number of operations like inbound logistics
in the form of the presence of strategic relationships with suppliers and insight knowledge of
supply chain management practices because of selling relevant software (Dudovskiy, 2019).

3. Microsoft: Globally Integrative, Locally Responsive – or both?
Microsoft company focuses on global integration and sacrifices responsiveness to local needs
and wants within each of its markets in favour of emphasizing efficiency points out (Lozupone,
2018). Microsoft also seems to adopt a ‘global business strategy’ to gain a competitive
advantage. To make its products and services more accessible, Microsoft export to other
countries.
RECOMMENDATIONS
Based on the findings of this report Microsoft should create an innovative culture within the
workplace for bringing more innovations to existing products and services, and should improve
its investments and acquisitions, more effectively.
CONCLUSION
To summarise, Microsoft’s vision is built on the foundation of facilitating people and businesses
all over the world, and they try to implement this in its mission statement. This focuses on
empowering individuals and organisations. Microsoft adopts a ‘global business strategy’ to gain
a competitive advantage to be more accessible. They create value for users through its software
and hardware and partner with competitors to create influence and value for developers as
well as end-users.
This report recommends that Microsoft focus on creating an innovative culture (to develop
more creative products and services), and to improve its investments and acquisitions.

REFERENCES
Books and Journals
Ariffin, A. A. M., 2020. Core dimensions of Islamic hotel service: towards their promotion in the
global marketplace. International Journal of Religious Tourism and Pilgrimage, 8(3).
Martins and et.al., 2020. The Viability of Heritage Craft in a Global Marketplace: Four Case
Studies in Portugal, 2019. In Handbook of Research on Driving Industrial
Competitiveness With Innovative Design Principles (pp. 249-264). IGI Global.
Parameswar, N. and Dhir, S., 2019. Global marketplace strategy and choice of interaction after
the termination of the international joint venture. Strategic Change, 28(3), pp.177-184.
Woods, J. and Lewis, H., 2021. Human rights and the global marketplace: Economic, social, and
cultural dimensions. In Human Rights and the Global Marketplace: Economic, Social,
and Cultural Dimensions. Brill Nijhoff.
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Lozupone. V., 2018. Evaluate How Microsoft Manages Hardware and Software in a Global
Market. [Online]. Available
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ages_Hardware_and_Software_in_a_Global_Market>
Microsoft, 2022 [Online]. Available
Through:<https://www.microsoft.com/en-us/about/corporate-values>
Ahmed. A., 2019. Importance of Mission Vision in Organizational Strategy. [Online]. Available
Through:<https://smallbusiness.chron.com/importance-mission-vision-organizational-strategy-
16000.html>
Tucci. L., 2022. strategic management. [Online]. Available
Through:<https://www.techtarget.com/searchcio/definition/strategic-management>
Comparative Advantage and the Benefits of Trade, 2019. [Online]. Available
Through:<https://www.econlib.org/library/Topics/College/comparativeadvantage.html>
Learn. R., 2020. What is Absolute Advantage?. [Online]. Available
Through:<https://learn.robinhood.com/articles/7iVwBnf1eE65Bk8rVGTAlE/what-is-absolute-
advantage/>
Bruin. L. D., 2016. Scanning the Environment: PESTEL Analysis. [Online]. Available
Through:<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>