Strategic Analysis of Microsoft: Porter's Five Forces, PESTLE Analysis, and SWOT Analysis

This report provides a strategic analysis of Microsoft, including Porter's Five Forces, PESTLE Analysis, and SWOT Analysis. It discusses the external and internal factors impacting the company's growth and development.

STRATEGIC MANAGEMENT
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Introduction of Microsoft............................................................................................................3
Porter’s five force of Microsoft...................................................................................................4
Pestle Analysis.............................................................................................................................6
SWOT Analysis...........................................................................................................................8
Mckinsey Model........................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Strategic analysis is based on the process or method in which organizational evaluating and
analysing its entire business environment or culture. This documentation will discuss about the
external and internal factors that help for impacting on the business in term of growth or
development. Furthermore, it is analysing the effective strategic approach in term of growth and
development. However, on the basis of effective decision which are undertaken by enterprise. In
this report, it is mainly focused on the different kind of strategies which is mainly applicable
within business growth. It will discuss about the different tool or platform to analyse the current
business condition or situation, analysing in evaluating the performance of enterprise in global
marketplace. Therefore, this report will describe about the strategic analysis of Microsoft as
company and analysing through Porter’s five force, Pestle analysis and SWOT analysis.
MAIN BODY
Introduction of Microsoft
Microsoft is a leading multinational technology company which provide the software and
hardware service of consumers in global marketplace. This company will focus on the running
their business with the help of information technology. Microsoft is mainly focused on the
strategic approach to determine the both issue of failure or success (Bindra, Parameswar and
Dhir, 2019). Afterwards, it will be highlighting the analysis of enterprise through Five Force
analysis, porters.
Microsoft Company will be achieving the revolutionary aspects and implement five force
for purpose of analysis. As per consideration of porter’s five force in order to observe the impact
on the performance of enterprise, identifying the competition level in global marketplace.
Usually, Microsoft can develop their own understanding towards the innovation concept which
deals with the other kind of competitors in global world.
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Porter’s five force of Microsoft
It is a kind of the analysis model which is mainly representing the competition in the
external factor with highest intensity of Information technology environment. However, there are
various type of issues or problem affect on the Microsoft as shown through Five Forces analysis.
Basically, company must be developed as appropriate responses to overcome certain kind of
impact on the external factors. The ability of this model which is always influencing the overall
organizational resilience. In order to measure the actual intensities of five force within Microsoft
industry as follows:
Competitive Rivalry and competition within Microsoft enterprise-
Microsoft enterprise has needed to effectively achieve the desirable success of business
but sometimes, it is mainly depending on the five forces model for identifying the effects of
enterprise with each other. Another way, it is also related to the condition of industry culture or
environment (Bogers, Chesbrough and Teece, 2019). In Microsoft, there will be considered as
moderate switching price or cost which have been corresponding moderate influence on the
entire business. For Example- Many potential clients have a moderate tendency so that they can
easily shift or move towards another products. But at certain level, it is not easy where enterprise
can upgrade their system could opt to use software or hardware items.
Bargaining power of buyers-
Microsoft is always focused on the continue satisfying the potential consumers,
identifying the overall performance of organization. By using five force model, it has been
evaluating the hardware as well as software environment which is directly impacts on the
existing consumers. Bargaining power of buyer is moderate which is mainly depending on the
specific power of consumers. Microsoft enterprise have a low substitution so that enterprise face
the difficulty in accessing the effective products of company. For Example- potential client have
faced the difficulties in identifying the better non-hardware network solution. However,
enterprise have a moderate switching cost that will be creating the considerable force on the
Microsoft enterprise. Different products of Microsoft is considerable as toughest competitors in
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global marketplace. In this way, bargaining power of consumer include moderate and
significantly concern in its entire enterprise strategies.
Bargaining power of Supplier-
Microsoft enterprise is primarily depending on the different kinds of supply condition or
situation. In this way, it will be identified the influences of supplier in context of computer
related software or hardware. Company will establish a better coordination with external factors
and also maintain weak force within power of suppliers. The bargaining power of supplier is
moderate which enable them to impose in proper ways but they have considerable as limited
influences on the business. For Example- many suppliers have been changed their cost or price
so that Microsoft can do adjustment according to them. By using Five force model, it has been
identified the moderate force in term of bargaining power of suppliers and consider as important
strategic consideration within IT industry.
Threat of Substitutes-
In Microsoft, Substitutes will be reducing the market share of enterprise. The primary
effects of Substitutes on the company which can identify the competitive environment through
forces analysis. Threat of Substitutes is becoming weak in the external factors on the enterprise.
Sometimes, it will be measuring the weak forces in low performance, moderate switching price
and low availability of other substitutes (Cescon, Costantini and Grassetti, 2019). In relation with
the adoption of innovative technique that can help to reduce the availability of different
substitutes. That’s why, Microsoft Company has been experienced the weakest threat of
substitution. Another way, there will be considered the moderate switching price helping to
facilitate the substitution. This type of factor is not enough to handle threat of substitutes.
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Threat of New Entrants-
In context of five force model, it is always influencing of new entrants within information
technology industry and their competitive environment. Sometimes, external factors that would
be increasing the moderate force within threat of new entrant in Microsoft Corporation. Threat of
new entrant is moderate. High price or cost of developing Microsoft brand in term of software
and hardware industry. In this way, enterprise will be representing the major contribution in term
of success of new entrants and also competing against Microsoft. However, it has been
summarised about the condition or situation related threat of new entrants and identifying
significant affects on the Microsoft Corporation.
Pestle Analysis
It is based on the framework or tool that can use for analysing the external environment
of Microsoft Corporation. It is considered the important aspect for enterprise to identify the
relevant strategies which always supports for identifying overall business performance or
efficiency (Drnevich, Mahoney and Schendel, 2020). Pestle analysis provide the better insight of
different things such as competitor’s strategies, specific requirement of potential client, latest
market trends and so on. It is an essential aspects of strategic analysis and help them to make
better decision. By using pestle analysis, it would be gathered the information through internal as
well as external analysis.
Additionally, Microsoft can determine great opportunities to expand their business in
global marketplace. Microsoft corporation has been focused on the strategic decision which are
undertaken and eliminating the different kind of threats. Besides, it has been identified the
different components such as value, goals, mission, purpose and tools.
Political-
This type of factor is mainly consist of different elements such as political stability, rules and
regulation which are imposed by country. In this way, it can directly impact on the Microsoft
Corporation. So as company will be changed their trade legislation in order to manage or control
the entire performance. Microsoft is a leading enterprise that can operate into global level but at
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certain point, lobbying of government which is directly impacts on the business image or
reputation. In 2 years ago, enterprise have paid approximately 10 million because of anti-trust
issues and also blaming the Microsoft for creating as monopoly among people. in this way,
potential consumers have faced so much difficulties in the uninstall of browser.
Economic-
This type of factor is also impacts on the Microsoft Corporation and consists of economic
growth, currency rate. These are highly influences the enterprise in context of growth and
development. Nowadays, Microsoft is well-known brand in global world because they can
operate software or hardware item (Ketchen and Craighead, 2020). In 2008, company can lay off
their employee due to recession. Thus, it is highly affecting on the revenue of enterprise. At
certain point, it is very difficult for Microsoft to overcome such problem or issues. Afterwards,
different nations are trying to maintain or stable the economic growth or business in marketplace.
Social-
This type of factor is related to need or requirement of people which has been continuously
changing on the basis of market trends. In this way, it can impact on the Microsoft enterprise and
their operations. Any kind of change which may led to produce new product as well as services.
it is becoming consider as essential part of every consumers where they can select the best items.
Nowadays, It has been spreading the COVID-19 so that many client prefer to stay in home
whereas emerging the trends in global business. Sometimes, it is positive way to improve the
demand of Microsoft because many people can do work from home.in order to highly increase
sales of laptop, computers in the marketplace.
Technological-
The advancement of modern technology has rapidly increasingly in global marketplace.
Therefore, Microsoft Corporation has been focused on the innovative idea that can implement
within their different hardware or software items. Recently, it has launched the feature of start
button which gained more popularity in marketplace. In this way, Microsoft Corporation has
continuously growing and improving their operating system. In different countries, Microsoft has
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been enabled to develop windows 10 and provide the better experience of their existing
consumers.
Legal-
This type of factor is based on the rules and regulation which is mainly applicable by Microsoft
Corporation. Usually, enterprise can follow employment law that may support for consideration
of all legal issue or problem within organization. Microsoft has been addressed compliant
regarding discrimination in the workplace. That’s why, company initiatives to implement
employment act to provide the right of every staff members. If any kind of illegal activities are
identified so that company will take legal action against them.
Environmental-
This factor is related to environment condition of Microsoft so that implement suitable
legislation to maintain or control business operations. In some situation, Microsoft can include
CSR practices that provide the better opportunities for enterprise. Furthermore, Microsoft
Corporation was ranked in 1st in 2019 within context of environmental friendly (Knight,
Daymond and Paroutis, 2020). MS can focus on the sustainable development so that they can
raw materials which can emits limited amount of carbonate gases. Moreover, company has been
set up target to be spending 50 million within next 5 years on modern technology which can
easily deals with environment or culture.
SWOT Analysis
It is based on the tool or platform that can use for internal analysis of Microsoft
Corporation. By using SWOT analysis, it can be determined strength, weakness, threat and
opportunities of enterprise. However, it has been described about the Microsoft internal analysis.
Strength
 The biggest strength of Microsoft is becoming as strongest brand loyalty which are
leading enterprise in global marketplace. There are several kind of hardware and software
services provided by existing clients (McCann and Schwab, 2020). Basically, Microsoft
Corporation can operate more than 100 different countries, Also focusing the license,
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developing as strong position. This type of company is leading through OS (operating
system) over a years, providing the better result in their share which will be rapidly
increases 90%. This is reason why Microsoft compete other competitors in marketplace.
 Enterprise can offers the different types of products such as hardware or software. These
are based on licensed, Microsoft can obtain profitability by developing software and
provide better services of their consumers (Ketchen and Craighead, 2020).
 Microsoft corporation have a strong network in term of distribution which enabled them
t9 provide the product in quickly manner. Usually, they contain both several distributors
and suppliers.
 Microsoft is the fastest growing organization so that they can achieved 5th most valuable
brand in global world.
Weakness
 The weakness of Microsoft is the critical security flaws which can be identified the
different operating system (OS). These are becoming criticised for being so weaker than
against viruses or attackers. In this way, it can be identified that represent as lack of
protection or security.
 Lack of motivation or inspiration towards innovative which may increase the complex
situation or condition in term of business operations. Microsoft enterprise have huge
amount of R&D resources and use as great opportunities but it is very difficult for
enterprise to enter in new marketplace (McCann and Schwab, 2020). Sometimes,
innovative item may be failed due to lack of coordination or testing.
 In recently, Microsoft has been rapidly entered into mobile business but it may have
faced the issue regarding sales of product. Mobile industry has already established in
market so that it is quite difficult to again establish or target the new consumers.
 Microsoft is the biggest MNC firm but at similar time, it does not produce their own
hardware in marketplace. It is mainly focused on their existing items to upgrade with new
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ways. This is type of alternative approach to maintain the position of brand in
marketplace.
Threat
 The most common threat in Microsoft is high competition level in marketplace.
Employees of MS have faced the highly competition from other enterprise such as Apple,
Google. These are already well-established organization to implement innovative idea
within their product and service. In this way, it is directly impacts on the overall revenue
or market share of Microsoft Corporation.
 While changing the preference, want and demand of client has continuously changing.
Existing client can shift or move from other organization to purchase stand alone, laptop
pc. In this way, Microsoft has faced threat of modest market value or share (Ketchen and
Craighead, 2020).
 In marketplace, there are several type of new open source project launch by other
competitors such as Linux OS. In this way, Microsoft have faced such kind of issue
because the price or cost of MS item is expensive than others.
 MS can use the various lawsuits which help for considerable all expensive item as if not
require any time or money. But MS has been continuously operate business with similar
way. Therefore, it will be increasing the more law suits in market.
Opportunities
 The opportunities of Microsoft is gaining the more popularity in marketplace, company
also shifting to blade concept in order to identify any kind of illegal use of hardware or
software. In this way, Microsoft can earn more revenue and maintain market share in
global world.
 MS has established the strategic alliance that always support for business to achieve their
desirable goal or objective. it help for enterprise to increase their profitability as well as
productivity through strategic approach.
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 Microsoft Corporation has been entered into market through cloud based service which
are completely emerging the new market. In order to gain the more popularity on the
basis of consumer demand.
 Many existing consumers are attracting towards different hardware and software products
through advertising. It is to be considered as marketing approach that will help for
establishing a good business reputation (McCann and Schwab, 2020). Afterwards, it is
good way to tap market by enterprise. Furthermore, Microsoft corporation has concerned
about the targeting the small enterprise while acquiring to increase their cash flow. this
can possible for implementing new innovative technology in their start-up enterprises.
Mckinsey Model
This type of model is used by Microsoft for purpose of identifying their effectiveness in
both internal as well as external perspectives.
Strategy- Microsoft can use the innovative strategy that can implement within different product
as well as service. So as they can sell their innovative item within highly cost or price. This type
of innovative strategy will attract more potential client and then afterwards, it will acquire for
other small based enterprise in term of expansion.
Structure- Basically, MS can offers various kind of system such as CRM and KMS. These are
considered the most commonly used system by Microsoft. This will help for maintain the
flexibility within enterprise environment (Ketchen and Craighead, 2020).
Shared valued- The primary share value of Microsoft are considered as honesty, openness and
other integrity. This will help for improving the self-respect of staff members and continuously
putting extra efforts within business operations. It help for enabling a healthy working
environment for staff members.
Style- It is mainly representing the actual leadership style of manager which are adopted by
Microsoft. This company can be applied the transformational styles that help for bring more
changes within business tasks. in some situation, An effective leader is always inspiring or
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motivating their staff members towards organizational goal and objective. A great leader may
have enabled to reshape its business culture or environment.
Staff- Each and every employee of Microsoft have an ability, skill and knowledge to handle any
kind of critical condition or situation. MS can use as diversified culture which is always possess
advance to gain more knowledge.
Skill- Every staff members have different skills to improve the entire business services.
Sometimes, Microsoft have been hired the talented or experienced people who have a power to
maintain the coordination with client (Ketchen and Craighead, 2020). Furthermore, it is helping
to fulfil all essential need or requirement of existing consumers.
From above analysis, it has been identified the overall strategic performance of Microsoft
which become consider as effective way to involve in the different enterprise operations.
Innovative idea will inspire or motivate the consumers in order to maintain the brand position,
reputation in global marketplace. Another way, it also summarised about the weakness of
business in different areas but it would be handled by efficient employees within organization.
CONCLUSION
From above discussion, it has concluded that Strategic analysis plays important role in the
organization that help for identifying the entire performance of enterprise in proper manner. In
this report, it has been summarised about the external and internal factors for identifying the
greatest strength or weakness. Afterwards, they have supported to enhance the overall business
in term of growth or development. This report is identifying the effective strategic approaches
and concerned about the different kind of strategies which is mainly applicable within business
growth. As per discussion, it has been described about the strategic analysis of Microsoft as
company and analysing through Porter’s five force, Pestle analysis and SWOT analysis.
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REFERENCES
Book and Journals
Bindra, S., Parameswar, N. and Dhir, S., 2019. Strategic management: The evolution of the
field. Strategic Change. 28(6). pp.469-478.
Bogers, M., Chesbrough, H. and Teece, D.J., 2019. Strategic management of open innovation: A
dynamic capabilities perspective. California Management Review. 62(1). pp.77-94.
Cescon, F., Costantini, A. and Grassetti, L., 2019. Strategic choices and strategic management
accounting in large manufacturing firms. Journal of Management and Governance.
23(3). pp.605-636.
Drnevich, P.L., Mahoney, J.T. and Schendel, D., 2020. Has strategic management research lost
its way. Strategic Management Review. 1(1). pp.1119-1127.
Ketchen Jr, D.J. and Craighead, C.W., 2020. Research at the Intersection of Entrepreneurship,
Supply Chain Management, and Strategic Management: Opportunities Highlighted by
COVID-19. Journal of Management. 46(8). pp.1330-1341.
Knight, E., Daymond, J. and Paroutis, S., 2020. Design-led strategy: how to bring design
thinking into the art of strategic management. California Management Review. 62(2).
pp.30-52.
McCann, B.T. and Schwab, A., 2020. Bayesian analysis in strategic management research: Time
to update your priors. Strategic Management Review.
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