Introduction to Business Operations and Management

This document provides an introduction to business operations and management, focusing on the main functions of business operations, SWOT analysis, PESTLE analysis, Porter's 5 Forces, supply chain and logistics analysis, and new market entering analysis. The document also includes a case study on Microsoft and its operations.

INTRODUCTION TO
BUSINESS OPERATIONS
AND MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Main business operations functions........................................................................................1
SWOT Analysis......................................................................................................................1
Pestle Analysis........................................................................................................................2
Porter's 5 Forces.....................................................................................................................3
Supply chain and logistics analysis........................................................................................4
New Market Entering Analysis .............................................................................................5
Quality control and HR..........................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Everything which happens within a firm in order to keep it running and earning money is
known as business operation. Its main purpose is to creates the highest level of efficiency related
to business practice which is possible within a firm. The chosen firm is Microsoft which is the
technological company and also develops manufactures, licenses and sell computer software.
The company operates its business at world-level and ranked 30 in 2018. The company's net
income in 2019 is $39 billion and have around 15000 employees.
Report will describe company's operations management decision by using SWOT,
PESTLE, Porter five force and describe the supply chain and logistics analysis and them market
analysis by defining the entry modes in market.
MAIN BODY
Main business operations functions
Business operations uses key people and other organizational resources which seeks to
reach the defined goals through effective planning, directing and controlling. Further, an
effective business operation also leads to increase the customer base and also provide the best
customer experience to their customers. Its main aim is to create transparency within all
departments of the company so that proper information should be shared to each member of a
team (Korauš and et.al., 2019). Moreover, it also maximizes the performance of the employees
by developing a balance between department and groups.
SWOT Analysis
This model is used to determine the internal strength and weakness of Microsoft which is
as mention :
Strength:
 Microsoft have brand loyalty and brand reputation at global level.
 It also have strong distribution channel and provides high quality of services to their
customers (Sammut‐Bonnici and Galea, 2015).
 It also have strong financial performance and also make acquisition of Skype.
 It also ranked world's largest company (4th) with good market share and also operates in
more than 190 countries.
Weakness:
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 Increasing cybercrime is considered as a weakness for Microsoft because hackers also
attacked with cybersecurity.
 Company also lack innovation and due to which sometimes its failing to grow its
hardware products (SWOT Analysis of Microsoft, 2018).
 Company have poor acquisition strategy and investment like WebTV, LinkExchange etc.
Opportunity:
 Having a brand image will help the business to invest in cloud business growth.
 It also have a great opportunity to many innovative areas such as AI and game
technology (Gürel and Tat, 2017).
 Company also increases its sales and revenue by using cost leadership strategy so that it
also attract wide range of customers.
Threats:
 Company faces workforce related criticism because it has low number of women and
minorities.
 It also faces intense competition in software products which is also considered as a threat.
Even changing preference of customers related to smartphones and laptops also creates
threat for Microsoft (Daman, Tripathi and Mishra, 2016).
Pestle Analysis
Pestle analysis is the tool or framework used to analyse and monitor the macro
environment factor which may have impact on organization performance.
Political Factor: Political factor are factor of macro environment which looks at effect of
government on business. Political factor are significant in micro soft decision-making as there is
political stability in UK market. At the same time political parties are favouring international
trade it may affect the operation as competition will be increased (Achinas and et.al., 2019).
Economic Factor: These factors are the factor which used to determinants of a certain
economic performance. This factor used to help the business in seeing a good amount of growth
as interest rate and inflation rate in the UK is at positive side. This help the business in getting
the adequate finance and also serving the quality service and product.
Social Factor: Social factor are the factor determinant of demographic characteristic,
norms, custom and value. In the rapidly changing environment the demand of the consumer is
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changing on regular basis as there is good demand of stable demand for high quality of customer
service. This usually drive the changes in the organization.
Technology factor: Factor which used to impact the business due to the advancement in
the technology. Technology factor used to affect the organization in both positive and negative
way. As technology advancement used to open the opportunity of adoption of rising demand of
mobile technology and also allow the company to develop more product which a secure online
transaction. At the same time it has also increased the threat of cybercrime attack.
Environmental factor: These factors which used to include the factor like weather,
climate environmental offset and climate change. This factor is well defended by the Microsoft
operation as Microsoft has developed more environment friendly product, as there is good
demand of green product in market (Rastogi and Trivedi, 2016). Also, Microsoft uses the
recycled material in the packaging of the organizational product.
Legal factor: These factor include more specific law such as discrimination law, antitrust
law, employment law and consumer law etc. This factor used to impact the Microsoft as
organization used to compile with the different legal compliance to carry out the operation of the
business. This factor used to impact the efficiency of operation as organization need to have a
permission at all stage of operation. For example: Microsoft HR department has to make sure
that all the operation of business in the organization are compiled with the employment law of
the nation which used to impact the efficiency of operation in the organization.
Porter's 5 Forces
Porter's Five Forces is a model that identifies and analyses five competitive forces that shape
every industry and helps determine an industry's.
 Competition among the rivalry firm (Strong): This force is very strong for the
organization, organization has to take the corrective action to compete with the
competitor. The reason behind the same is that there is high aggressiveness of firms and
diversity of firm in the UK market.
 Bargaining power of Customer (Moderate): This force used to affect the organization
but not that much as there is moderate switch cost which has to pay by the organization
and also the consumer in the market is having high quality of information about the
product (Mathooko and Ogutu, 2015). At the same time there is low substitute available
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for the organizational product, it helps the business in moderating the bargaining power
of Microsoft.
 Bargaining power of supplier (Moderate): As there are moderate number of supplier in
the market which limits the influence of Microsoft by the supplier. Also, there is
moderate level of overall supply, as the intensity of force could increase if total supply
decreased.
 Threat of substitute product (weak): This force is weak in the market as the
performance of substitute product is low as compare to the Microsoft in the organization.
 Threat of New entrant (Moderate): This force is also very weak force as capital require
to carry out the different organizational operation is very high in the market which used
to see low level of new entrant in the business (Goyat and Nain, 2016).
Supply chain and logistics analysis
This is performed by using value chain analysis such that:
Microsoft inbound logistics: It contracts with range of suppliers at international level
and also maintain highly complicated supply- chain operations as well. Even all the suppliers of
Microsoft's also adhere to Microsoft supplier code of conduct. Further the main source for
inbound logistic involve economies of scale, presence of strategic relationship with the suppliers.
Microsoft's operations: It has three operations such that: Productivity and business Process:It related to productivity and communication and
information services such as Office commercial. Office LinkedIn and dynamics
(Ferrantino and Koten, 2019). Intelligent cloud: It includes public, private and hybrid server products such that SQL
server, Windows server etc.
 More personal computing: It provides the products such that Laptop, computer,
smartphones of all size.
Microsoft outbound logistics: the distribution channel is as mention: Original equipment Manufacturers (OEM):It is a vast distribution channel for Microsoft
such that PC, tablet,s smartphones, Dell, ASUS, Acer etc. Distributor and resellers: It includes retail outlets such that Wal-Mart, Dixon and
Microsoft retail stores.
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 Online sales: It also sales online products through Bing, MSM portals and Channels,
Outlook.com, Office 365 and Windows store etc.
 Microsoft stores: Firm have 116 stores at global level and similar to Apple, company
also have an opportunity to use product helpful 'Technical advisers' in stores (Xu, 2019).
Microsoft marketing and sales: Microsoft uses licensing method in order to sell the
products and services such that Enterprise Agreement Licensing, open Licensing, Select Plus
Licensing etc. In 2018, company's sales and marketing expenses is increases by $2 billion as
compared to previous year because of investment in commercial sales.
Services: Microsoft attempts to maintain the highest level of customers service pre-
purchase, during the purchase and after as well. It also has effective online billing system and
offers online answer desk in order to reply timely to their customers. Additionally, quoted firm
also offer supports for business and IT professionals to derive the maximum benefits from their
products and services (Huang, 2019). Further, it also supports its customers to provide online
security and for that it offers Malicious Software Removal Tool which is the part o the customer
service program and Microsoft has an online disability answer desk in order to answer the
customers with disability which none other company has.
New Market Entering Analysis
After going through the internal and external analysis of the Microsoft it has been
analyzed that Microsoft is in the good set of frame both financially and operation that they can
opt to enter more developing countries. As organization is having good financial position in the
market as organization is able to earn good amount of the profit in the past (Rothaermel, 2017).
Also, organization is having good market position in term of goodwill due to quality operation of
business.
Microsoft in past has used acquisition as a market expansion tool to enter into the new
market but it has not proved that well for the organization. For example: Microsoft has acquired
Nokia in the past to enter into the mobile phone industry of India but not able to earn the
expected return from the same.
Microsoft can look at the option like merger as a market expansion technique, this will
help the organization in sharing the risk equally with the other parties whom is involved in the
merger. This will also help the company in getting the advantage of the other company goodwill
at the time of entering into the new market. Also, this option of market entering will help the
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organization in requiring the less amount of the finance at the time of entering into the new
market. Joint venture can be another alternative option which can be looked by the organization
at the time of entering into the new market (Ghauri and et.al., 2016).
Quality control and HR
In order to control quality, HR of Microsoft uses Total quality Management as a quality
control tool which helps to measure the overall performance of the company. Though this model,
quoted firm will easily check the qualities of company products/ services. Further, Microsoft also
uses quality assurance system which allows the business in order to prevent from defects
throughout the process of delivering the goods and services to their customer.
On the other side, HR of company also uses different methods of recruitment and uses
job empowerment, job rotation to motivate their employees. Overall, it is clearly reflected that
company uses the best techniques in order to attract wide range of customers and also maintain
financial performance too.
CONCLUSION
By summing up above report it has been concluded that business operations plays an
important role in Microsoft such that company has strong presence in market with brand
reputation and strong customer loyalty. After that the report goes on to summarized that macro
environment of company is also favorable for the organization as few factor like technology and
political are the one who used to impact the performance in negative other than that macro
environment is at favorable side. After that the report goes on to highlights that there are forces
in the macro environment which used to impact the performance of organization in environment.
Also, it has been summarized that organization can use merger as a new market entering method
to enter into new market. Moreover, the company's has strong outbound and inbound logistics
and that is why, it provides best services to their customers at global level.
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REFERENCES
Books and Journals
Achinas, S and et.al., 2019. A PESTLE Analysis of Biofuels Energy Industry in Europe.
Sustainability. 11(21). p.5981.
Daman, R., Tripathi, M. M. and Mishra, S. K., 2016. Cloud Computing for Medical Applications
& Healthcare Delivery: Technology, Application, Security and Swot Analysis.
Ferrantino, M. J. and Koten, E. E., 2019. Understanding Supply Chain 4.0 and its potential
impact on global value chains. GLOBAL VALUE CHAIN DEVELOPMENT REPORT 2019,
p.103.
Ghauri, P and et.al., 2016. Market driving strategies: Beyond localization. Journal of Business
Research. 69(12). pp.5682-5693.
Goyat, S. and Nain, A., 2016. STRATEGIES OF ENTERING IN FOREIGN MARKET.
International Journal of Management Research and Reviews. 6(10). p.1382.
Gürel, E. and Tat, M., 2017. SWOT analysis: A theoretical review. Journal of International
Social Research.10(51).
Huang, J., 2019. Contract Research Organizations Are Seeking Transformation in the
Pharmaceutical Value Chain.
Korauš, A. and et.al., 2019. Using quantitative methods to identify insecurity due to unusual
business operations. Entrepreneurship and Sustainability Issues.6(3). pp.1101-1112.
Mathooko, F. M. and Ogutu, M., 2015. Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management. 29(3). pp.334-354.
Rastogi, N. I. T. A. N. K. and Trivedi, M. K., 2016. PESTLE technique–a tool to identify
external risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
Rothaermel, F. T., 2017. Strategic management. New York, NY: McGraw-Hill Education.
Sammut‐Bonnici, T. and Galea, D., 2015. SWOT analysis. Wiley Encyclopedia of Management,
pp.1-8.
Xu, X., 2019. Value Creation for Intelligent Connected Vehicles: An Industry Value-Chain
Perspective. In Digital Business Models (pp. 57-79). Palgrave Macmillan, Cham.
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Online
SWOT Analysis of Microsoft. 2018. [Online]. Available through:
<https://bstrategyhub.com/swot-analysis-of-microsoft/>.
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