Strategic Management Assessment Question

Strategic Management
Assessment Question

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of the Company: ...................................................................................................1
Philosophy of Microsoft :.......................................................................................................1
Current Business Scenario: ....................................................................................................2
TASK 1............................................................................................................................................3
Porter's Five Force Model:.....................................................................................................3
TASK 2............................................................................................................................................5
Porter's Generic Strategies:....................................................................................................5
.........................................................................................................................................................7
TASK 3............................................................................................................................................7
Recommendation....................................................................................................................7
CONCLUSION................................................................................................................................8
..........................................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management can be defined as never ending process of planning, assessment
and analysis of all that which is essential for administration in order to meet it's set standards.
This plays a critical role as it helps in maintaining strategic balance between administration goals
and resources in the market environment. It's main role is to effectively and efficiently utilize the
resources in order to achieve the enterprise desired set objectives. By adopting strategic
management in the working premises business will become more discipline and organised.
Moreover, it act as bridge between rewards and performance for the staff members. This report is
based on Microsoft Corporation which is located in Redmond, Washington. Organization was
discovered in the year 1975 and is serving it's services across the globe (Baumgartner and
Rauter, 2017). This assignment covers distinguished theories like porter's five Force model and
porter's Generic Strategies. This will help the Microsoft firm to effectively utilize the strategic
management so that business operations can be carried out smoothly in the competitive market
place. As well as recommendation in context to enterprise is discussed.
Overview of the Company:
Bill Gates and Paul Allen are the founder of Microsoft Corporation and the CEO is Satya
Nadella. This successful business came into existence in the year 1975 and is situated in
Redmond, Washington. This is a American multinational technology administration which deals
in developing, selling computer software, personal computers, consumers electronics,
manufactures, licenses and related services. Across the globe it is well known for it's software
products such as, Microsoft Window line, Microsoft Office Suite, Edge Web Browsers etc.
Around 144,106 staff members are working worldwide and are meeting the emerging needs of
the customers. Also, this is the world's largest software maker by revenue (Microsoft Annual
Report, 2018) Along with this it makes wide range of consumer and firms software such as,
tabs, desktops, gadgets, servers, laptops etc.
Philosophy of Microsoft :
The Philosophy of Microsoft normally aims to achieve set standards in the cut throat
competitive world. Also, companies vision and mission statement keep eye on framing
businesses so that workers can be motivated to perform effectively and efficiently in the cut
throat competitive world. By studying this worth can be given to their product which is designed
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for targeted customers (Boulet and Reddel, 2015). However, Microsoft is to authorise every
employees so that they can take best decision at their own level . By this step potential customers
are given best sort of services as compare to the competitors prevailing in the neck to neck
competitive world. Microsoft Corporation current philosophy is to reinvent firm into a design
oriented enterprise. And their mission is to come up with unique design across the globe. As
they this designs assist organization to raise public image, products and marketing.
Current Business Scenario:
In era of competitive world where other competitors of Microsoft's are struggling to
sustain in the open market. Microsoft Corporation has thought to reinvent enterprise into a
design oriented company. This is the most valuable organization across the globe and are able to
capture huge market ratio over the years. In the year 2019 this successful software business has
earned US$125.8 billion and the net income was US$39.2 billion which is a positive sign for the
firm. To meet the emerging needs of the customers around 144,106 employees are working day
and night. This business associates adopts advance technology in order to enrich their abilities
and capabilities in the market place. Company come up with innovative idea on continuous basis
due to which more and more potential customers are pulled towards the product and huge profit
is gained at a large scale.
The current business scenario of Microsoft Corporation is that Microsoft performance is
normally showed on distinguished social media platform which are, Surface, LinkedIn and
Window pro. However, several other like Dynamics 365, Azure, Office 365 etc. are developed
by Microsoft Corporation in the global market place. This is huge success in the market and
company is able to recognize their brand in the customers eyes. Moreover, business concern has
been overseen effectively gaming by which around $10 billion is earned in the global market.
The association has been focussing on their procedures through which they will almost certainly
improve execution of distributed computing
By adopting strategic management in appropriate manner firm will be able to run
business one step ahead of rivalry (Cascio, 2015). To grow and develop software business on
continuous basis t they need to critically examine the in market and then frame strategies
respectively. However, the main reason behind executing strategic management is that it will
guide them with a clear pathway along with potential threats and opportunities for an
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administration. For this, Porter’s Five Force Model (a suitable approach) can be used by
Microsoft to analyse the entire industry.
TASK 1
Porter's Five Force Model:
Porter's Five force Model is a scientific framework which is widely used for examining
the competitive environment in the market place. In the year 1980 this model came into existence
and was founded by Michael E. porter. This model adopted or carried out by Microsoft
Corporation in their working premises will aid to better understand firm's weaknesses and
strengths (Takey and de Carvalho, 2015.). However, it also guide the administration to adjust
their strategies so that it can match with the competitive environment. Also, there are five forces
which affect the business while accomplishing the set standards and goals. This model involves
bargaining power of suppliers, bargaining power of customers, threat of substitute, industry
rivalry and threat of entry. Here, the model is discussed as follows:
Bargaining Power of buyer: In the era of 21st century power in the hands of buyer
demand low price and best quality product in the market. Here, the buyers power is high when:
1. Buyers are cost sensitive
2. few buyers exist
3. several alternates options available in the market.
Microsoft Corporation is working within the larger market including both developed and
developing countries. Microsoft furnish more capable services and products in order to enhance
their customer base as well as meet latest technological aspirations (Cook, 2015).
Bargaining Power of suppliers : When there is high power of degree in the hands of
suppliers they sell low quality goods at high price in the market. As well as exploit customers at
a large scale and successfully gain huge profit from consumers. Suppliers has strong bargaining
power in following circumstances:
1. When there is few substitute in the marketplace
2. Switching cost of raw material is highlighting
3. Few suppliers but many buyers
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In regards of Microsoft the size of providers is moderate in the competitive market place.
It will make moderate effect on tasks and business functions can be carried out easily. Microsoft
Corporation is fit enough to build up their own product and are able to bit their competitors.
Threat of new entrants: In the competitive world threat of substitute is prevailing when
company compete with each other for the same market share. But if the new business which is
entering the market is financially strong then there is less barriers and rivalry intensifies
accordingly. The threat of new entrant is high when:
1. Business has low funds to enter into the market (Côrte-Real and Ruivo, 2017).
2. In the marketplace there is no government rules and regulation regarding trading of
business.
3. When the switching costs of customer is low.
4. Goods are identical in nature
However, Microsoft Corporation itself is large administration serving it's product across the
boundaries. Additionally, emerging needs, wants and preference of the customers are fulfilled on
set time frame. It has been found that there is less new enter who can beat this successfully
enterprise. However, the prices of the software goods need to be affordable and feasible in nature
so that potential customers can easily access it. Also, new entities styles and creativity directly or
indirectly affect the consumers mind set which leads to decrease in profit.
Threat of substitute: Here, substitute threat threatening when potential customers find
out other alternative and switch to other firm. As soon as other firm provides quality product or
services at affordable prices customers immediately switch in order to meet the emerging desire.
So in order to bind the customers for longer time duration uniqueness in product is mandatory so
that switching rate can b e reduced (Furnham and Gunter, 2015). By doing set objectives can be
achieved and goodwill can be raised in the eyes of the customers. Here, in case of, Microsoft the
substitute is prevailing in both online or offline platform. The quality of the product which does
not cope up with performance level of Microsoft is overcomed by adoption of advanced
technology. In order to gain competitive advantages in the cut throat competitive world modern
tools and techniques are adopted by the firm. As per the investigation it has been found that
Microsoft has low degree of threat.
Competitive rivalry: In order to survive for longer timer duration firm need to come
with innovative idea. Here, organization compete aggressively for market share due to which
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profit sharing is decreased ta a large scale. Competitive rivalry is intense or more in the
following situation:
1. When exist barriers are high
2. Competitors are of same size
3. Very less consumers loyalty towards the product or services
4. The growth of the industry is low.
In context to Microsoft Corporation the drives competitors are Apple, IBM, Google, SAP and so
on. Strong threats is created through innovative technology so that emerging needs can be full-
filled in affective manner. The designs are created in such way that it affect the future
requirements at tremendous scale. However, these are some of the threats Microsoft Corporation
come across in the cut throat competitive world.
From the above it can be summarized that threat which has been studied are affecting the
business at a large scale. All this directly or indirectly affect the smooth functioning of the
business. Despite of this firm need to come up with innovative idea so that huge profits can be
attained as well as loyal customer can be raised. In order to over come this threat Porter's model
can be used in effective manner (Helfat and Martin, 2015).
TASK 2
Porter's Generic Strategies:
Porter's Generic Strategies can be defined as how business administration pursues
competitive advantages against competitors in chosen market scope or place. This widely
adopted model was discovered by Michael Porter in the year 1980. The name of the Porter's
Generic Model is named after this great personality. By adopting this in the Microsoft
Corporation the set standards or objectives can be attained easily in the cut throat competitive
world. In order to attain average performance in the industry there are four generic strategies
which are differentiation focus, Cost leadership, differentiation and cost focus (Rosemann and
vom Brocke, 2015). However, by effectively conducting this business will be able to raise their
workforce performance effectively and efficiently in the competitive market place. In addition to
this, Porter's generic strategy mainly depend of the type of customers which are targeting by
organisation (Hopkinson, 2017). However, every single strategy possess uniqueness and
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purpose which is important for examining the right strategy that has been chosen as recovery
plan. In context of Microsoft company Porter's Generic Model is discussed as follows:
The Cost Leadership Strategy: In this particular case, Microsoft company set out for
becoming lower cost producer within their respective industry. Cost leadership is adopted by the
organization in order to decrease the cost of the firm of delivering goods and services. The main
reason behind carrying out this in the working premises is to attain huge return on the amount
invested for goods and services to meet the emerging needs of the customers. However
Microsoft Corporation attain cost leadership style by providing standardised services to their
client and need to distance them from any type of customisation as well as personalisation within
their offerings (Kerzner, 2019). As by raising the production level at a large scale this will be
able to result in low cost unit. In order to effectively implement this strategy Microsoft need to
get proper control on their functional groups which are, information technology, finance,
marketing etc.
Differentiation Strategy: By adopting this strategy uniqueness and extra value is added
to the goods and services that makes them more attractive as compare to rivalry products. The
differentiation strategy includes, durability, support, features, functionality etc. Within
differentiation strategy company select one or more attribute as buyers in industry perceive as
unique or important position for accomplishing the requirement. In the competitive world
Microsoft Corporation opt differentiation Strategy for those potential customers who are not
sensitive in relation of price. In addition to this, Microsoft Corporation charge premium price for
their unique product as well as brand recognization is done in the eyes of the customers.
Focus Strategy : Here, in this case, firm focus on specific market and evaluate the
marketplace accordingly in order to make unique low cost goods for the targeted customers (Maa
and Crutzen, 2016). By doing so more and more customer base for the product can be increased
which is a positive sign for the firm. However, Microsoft Corporation conduct this strategy
when they are having niche market segment in the competitive market place. Before executing
this focus strategy in their working premises business associates select specific section of
industry and gradually adopt strategy so they can serve better services. Organization utilise
focus strategy when they want to stay away from competition frame with large scale company.
Moreover, cost strategy focus on organisation to accomplish cost advantages in distinguished
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market place. This is done to that they can frame their different image in customers eyes as
compared to competitors.
Hence, from the above mentioned it can be concluded that differentiation strategy is the
best aspect which is adopted by Microsoft Corporation in the neck to neck competitive world. In
differentiation strategy uniqueness in product is concerned so that large number of customers can
be pulled towards the innovative goods. Whereas, in Microsoft corporation they come up with
creative software products and are successfully able create tough competition for others in the
open market place (Maitland and Sammartino, 2015.. In context to Microsoft the aim to acquire
global marketplace, this strategy turn out to be effective as it focus on long term and short term
objectives of the enterprise. Differentiation strategy is more effective as compared to focus and
cost leadership strategy. However, cost leadership which is appropriate for short term company.
While, focus strategy is meant for predetermined single segment not for set standards and
objectives. Adoption of this strategy aid the the business concern to improve their quality of
products so that sales volume can be raised and huge profits can be maximized. to So, from the
above it can e calculated that, for Microsoft Corporation differentiation strategy proves to be
useful and effective in the global marketplace.
TASK 3
Recommendation
From the above mentioned discussion it can be summarized that execution of Porter's
Five Force Model has greatly assist the organization in determining administration structure and
tactics of the operation. In order to sustain for longer time duration and to gain competitive
advantages against rivalry then Microsoft can adopt this model effectively in their working
premises. This model is suggest to the firm as it helps in assessing threat which is prevailing in
the open market place. In order to overcome, Bargaining power of suppliers, threat of new
entrants, production of substitute goods, bargaining power of buyers or competitive rivalry this
model is deeply studied. So that strategies can be adopted accordingly (Massa and Afuah, 2017).
For continuous success against competitors this forces need to evaluated and accesses on priority
level. This is the reason Porter's Five Force Model is suggested to Microsoft Corporation guides
to ascertain profits and its creativeness which lead to attracts potential consumers. In order to
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analyse the impact of Five forces factors on this corporation it is advised to Microsoft
corporation to invest huge funds in research and development sectors. Whereas, administration is
suggested to use distinguished tactics or strategies by the organisation for achievement of
increment in market share at international level. Additional to this it directly or indirectly focus
on the mission and vision statement of the set standards (Morden, 2016). By doing so company
will be able to get access in the international market which is a huge success for the enterprise.
CONCLUSION
From the above it can be concluded that strategic management plays a critical role in the
business. By effectively adopting this effectively in the working premises best outcomes can be
achieved in the competitive market place. Strategic management is a predetermined process that
is widely adopted to examine, monitor, analysis, access and arrange the acts of the enterprise to
sustainably achieve the desired aims and objectives. However, company is adopting Porter's Five
Force Model so that external factors can be examined easily and strategies can be formulated
accordingly. Porter's Generic model is used so as to better understand the market scenario and
accordingly research and development activities can be carried out competitive market place.
However, appropriate conclusion is provided to the business administration so that errors can be
eliminated in the initial stage and modification can be done accordingly. By doing business can
sustain for longer time period which is a positive sign for the firm.
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REFERENCES
Books and journals
Baumgartner, R. J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production.140.
pp.81-92.
Boulet, L. P., FitzGerald, J.M. and Reddel, H.K., 2015. The revised 2014 GINA strategy report:
opportunities for change. Current opinion in pulmonary medicine. 21(1). pp.1-7.
Cascio, W.F., 2015. Managing human resources. McGraw-Hill.
Cook, N. D., 2015. Crisis management strategy: Competition and change in modern enterprises.
Routledge.
Côrte-Real, N., Oliveira, T. and Ruivo, P., 2017. Assessing business value of Big Data Analytics
in European firms. Journal of Business Research. 70. pp.379-390.
Furnham, A. and Gunter, B., 2015. Corporate Assessment (Routledge Revivals): Auditing a
Company's Personality. Routledge.
Helfat, C. E. and Martin, J.A., 2015. Dynamic managerial capabilities: Review and assessment of
managerial impact on strategic change. Journal of management. 41(5). pp.1281-1312.
Hopkinson, M., 2017. The project risk maturity model: Measuring and improving risk
management capability. Routledge.
Kerzner, H., 2019. Using the project management maturity model: strategic planning for project
management. Wiley.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment,
management accounting, control, and reporting. Journal of Cleaner Production, 136,
pp.237-248.
Maitland, E. and Sammartino, A., 2015. Decision making and uncertainty: The role of heuristics
and experience in assessing a politically hazardous environment. Strategic Management
Journal. 36(10). pp.1554-1578.
Massa, L., Tucci, C. L. and Afuah, A., 2017. A critical assessment of business model
research. Academy of Management Annals. 11(1). pp.73-104.
Morden, T., 2016. Principles of strategic management. Routledge.
Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process management.
In Handbook on business process management 1 (pp. 105-122). Springer, Berlin,
Heidelberg.
Takey, S. M. and de Carvalho, M. M., 2015. Competency mapping in project management: An
action research study in an engineering company. International Journal of Project
Management. 33(4). pp.784-796.
Thompson, A., Strickland, A. J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Online:
Microsoft Annual Report 2018. [Online]. Available Through:
<https://www.britannica.com/topic/Microsoft-Corporation/>
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