Strategic Management Report: Microsoft's Analysis and Strategies

This report provides a strategic analysis of Microsoft, evaluating both its external and internal factors. It utilizes various strategic analysis tools, including PESTLE, SWOT, McKinsey's 7S model, and Porter's Five Forces, to assess Microsoft's competitive position and strategic choices. The report explores the company's strategies for increasing revenue, maintaining its brand image, and promoting its hardware and software. Key aspects covered include the threat of new entrants, bargaining power of suppliers and buyers, threat of substitutes, competitive rivalry, and the internal structure, systems, shared values, style, staff, and skills within Microsoft. Furthermore, the report examines the internal and external environment, including political, economic, social, and technological factors impacting Microsoft's strategies. The analysis provides insights into how these factors influence the company's market position and strategic decision-making.

STATEGIC MANAGEMENT
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EXECUTIVE SUMMARY
This report has summarised about the strategic analysis of Microsoft and help for evaluating both
external as well as internal factors. it has been described about the suitable tool, platform and
other strategic analysis through Pestle, SWOT, McKinsey and Porters Five forces. Here, it has
supported the enterprise to increase revenue of Microsoft which already established the brand
image or position. In this report, it has been adopting the effective model to promote use of
hardware and software.
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Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Strategic management is the process of ongoing analyses, planning, monitoring an assessment of
all the necessities companies needs to meet their set goals and objectives. With the change in
organizational environment within a market where there operating their business they should also
need to change their strategies accordingly so they can be success in their business.
This report will cover case study of Microsoft Corporation that is an American multinational
technology based company who are having headquarters in Redmond, Washington (Hitt, M. and
Duane Ireland, R., 2017). This company manufacturer, support and provide licencing to sales
computer software’s, personal computers, And other similar services to their customers. This
companies one of the most popular software is Microsoft Windows line of operating system, the
Microsoft Office suit etc.
This report will analysis swot and pestle Analysis to identify factors that affect the companies
strategies. Additionally it will include Porter’s five forces that is used to measure the
competitiveness within a market and McKinsey’s 7s model To understand the company
strategies.
MAIN BODY
Porter’s five forces of Microsoft
This model is based on the analysis purpose which help for identifying competitiveness
of Microsoft where how will effect on the entire business performance. Porter’s five force is
consider as strategic model or tool that help for Microsoft to make better decision regarding
growth and development (Njuguna, 2020). It is best way to find out the current competition level
of Microsoft and their tough competitors, who have already established their business in
marketplace. Typically, this type of five force model is developing as sustainable competitive
advantage within hardware, software industry. Owner of Microsoft is not only consider as
analysis model but also planning an effective strategies to build a strong position in global world.
Threat of New entrant
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Microsoft is a leading organization in context of software development which always
influencing other existing consumers towards product as well as services. Threat of new entrant
is moderate because it’s external factors that will increase more intensities of business. Microsoft
is a company which always used modern technology in their product and services. In this way,
price/cost of brand is becoming high than others. But Nowadays, it can be identified the weakest
effects of new Entrant on the Microsoft. It has more chances to moderate price of developing
enterprise. For Example- Switching price of new entrant is moderate and their contribution
towards business growth and development. Typically, external factor can influence the
contribution of competitive environment.
Bargaining power of Supplier
In Microsoft, they do not have many suppliers. For Example- Microsoft is based on the
software or hardware industry, which is mainly consists of intangible product that is developed
in house (Kayoka, 2019). The suppliers supply various components for marking an effective
hardware item for consumers such as tablets, game consoles and so on. Usually, Suppliers can
feel prestige to put labelled as suppliers of Microsoft. The Switching cost of supplier is low.
Therefore, it is not applicable as position to bargain or influence cost/prices. The bargaining
power of supplier is low against Microsoft.
Bargaining power of buyer
In context of Microsoft, bargaining power of buyers in moderate. So that it help for
enterprise to satisfy its need and requirement of existing consumers. This will help for
organization to attract potential consumers through various product as well as services.
Generally, it involves software and hardware equipment’s. Nowadays, Demand of customer’s
will be increasing because large number of individual people use electronic items in their daily
life style. It helps for increasing the overall business production and sales in global marketplace.
For Example- existing customers have faced the problem or issue regarding the computer
networks. But it can be resolved through effective strategic planning. Otherwise, clients have to
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move towards another organization. In this way, it will be considered as moderate switching
price.
Threat of Substitutes
Threat of substitutes will be reducing the market share in which directly effecting the
business activities. The substitutes can depend upon the manual mechanism process which often
to improve the performance and efficiency. Threat of substitution is weakest external factor
against enterprises. For Example- Implementing advancement of modern technologies that help
for reducing the availability of substitutes.
The Substitutes of software is manual writing as well as record keeping, which have
considered as obsolete now. Typically, Substitutes of hardware items such as tablet as use of
writing pad. Carry a counter, device and cameras that can perform different functions.
Competitive Rivalry
Microsoft is a leading enterprise which remain maintain a strong position in global
marketplace. Competitive Rivalry force is considered as important aspects to determine the
significant effects. The switching price or cost will moderate, influencing on the business
towards growth and development. For Example- Each and every consumer can have moderate
capacity so that they can easily shift from one enterprise to other (Neokleous, 2020). Typically,
Microsoft is mainly focused on the upgrading their hardware system. On the other hand,
Aggressive enterprise will support for increasing strong forces which is directly affecting on the
organizational culture or environment. For Example- Microsoft is concerned about the
innovation and creation so that they always tried to add new features in their products.
Microsoft Mckinsey 7S model
It is based on the model that show how seven elements of enterprises can be aligned to
increase effectiveness. According to this strategy, it consists of different elements such as
strategy, system, structure, skills, style, staff and shared values (Neokleous, 2020). These are
considered as important element that help for understanding overall Microsoft performance.
Mckinsey 7S model is representing as strong presence which may establish a link between
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elements in order to change in others. On the other hand, this model will help for analysing the
effectiveness of Microsoft and identifying the internal factors.
Strategy
The Microsoft strategy can be defined as process or approach that is always support for
different product and services. Usually, Microsoft is focused on the innovation that’s why
implementing innovative features. When developing an innovative items and sell within high
price or cost. Company will focus on the cloud as well as mobile technology while acquiring
other enterprise to expand business in global marketplace.
Structure
The overall structure of Microsoft is depending on the division format, evaluating the
Cloud, AI, R&D, devices. Usually, it can be categorised into different nine divisions. The
business structure was introduced by CEO Satya Nadella in 2015. Microsoft division should
consider AI technology which help for research and development. Microsoft structure is highly
dynamic, ever-evolving to meet specific demand of changing external marketplace.
System
In Microsoft, it should be considered the different system which is an essential. It
includes TPS, KMS and CRM. These are becoming as integral part of Microsoft. Owner of
enterprise that will emphasis bureaucracy within enterprise. This can be done in order to adopt
the flexibility of business environment or culture.
Shared value
The primary style of Microsoft that include core value of enterprises. This company will
develop as effective strategic plan or procedure. In Microsoft, it also maintain the proper values
in context of integrity, openness and honesty. Generally, it is mainly focused on the continuous
improvement of staff members where each and every staff member can develop own self-
criticism. It enabled for developing a healthy positive culture or environment of organization.
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Style
Microsoft should consider as leadership style which mainly adopted within different
business processes. Microsoft can be applied as transformational style which brings employee to
change, follow specific vision or mission (Neokleous, 2020). In some situation, owner of
Microsoft have been setting a specific goal and objective that help for providing the right
direction towards achievements. This will help for Microsoft to reshape culture or environment
in term of growth and development.
Staff
It is mainly representing the working of staff members in organization, identifying
suitable candidate who have enough skill, knowledge for handling complex business activities.
In Microsoft, It has been diversified the staff members and their current working performance. It
possesses advance and high level of knowledge. An effective talented employees have been
experienced in order to easily understand the perception of business in context of growth and
development. At certain level, each and every employee have own ability or capacity to improve
overall organizational processes.
Skills
In Microsoft, Skill and knowledge of employee is considered as creative thing. Every
staff members are highly talented or experience to perform different tasks. Furthermore,
competency level of staff members are comparatively higher.
As per discussion, it has been analysed the Microsoft strategies performance which
become as effective in the organization (Neokleous, 2020). It involves in different cases, which
directly impact on the brand reputation of Microsoft in global marketplace. New Operating
system (OS) was developed by Microsoft. Thus, it require more innovation that help for gaining
more competitive advantage. In order to establish a string network of suppliers and deliver to
potential client.
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Internal and external environment of the company
There are some internal and external factors that has huge impact on companies strategies. It is
important for the Microsoft Corporation leaders to identify those factors and they should
understand how it is affecting their business strategies so they can create new opportunities and
take competitive advantages. these factors are not only used to identify the risks but it is also
help in product development, market research, market expansion etc.
PESTEL analysis Of Microsoft
Political factor
Political factor affecting the Microsoft Corporation from the couple off years,. China how taken
the issues with the Microsoft company related to their distribution an selling concept of software
(Trigeorgis, L. and Reuer, J. J., 2017). the United States Of America and China had amicable
relationship in their past here’s, even now The US relies heavily on the China and any of the
distribution by the Microsoft can cause of alarm. The company is not only facing problem in
China but they are also facing a problem within European And this union had hit Microsoft with
the more than 700 million dollars of fine and it was for their violating of their trust.
Economical factors
Economical factors has also huge impact on Microsoft , They are affected by the current state of
the economy first stop when the taxation rate was lower Co was getting huge profits but the laws
are changed Anne are from a poor relationship between international companies. Because a bad
relationship can increase the inflammation or prevent importing and exporting of materials first
up the Corporation is still recovering from changes over 10 years ago First off during the 2007
when the financial crisis hit Microsoft was forced to lay off over 5000 employees who are
working for them and this is the best example how economy has impact on them.
Social
It is necessary for the company to be aware of social factors because lifestyle and trends within a
customers change with the time an there dim and also change so Microsoft should be aware of
new trends and customers demand (Dmitrijeva, J. And et.al., 2020). marketing team of the
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Microsoft should take a feedback from customers so they can understand what new technology
or changes in the technology they need. it will help them to add some value for the customers
and they will able to take competitive advantages in the market where they are operating their
business.
Technological factor
Microsoft is an technology based company it developed the distribution digital software.
Changes within the technology industry can affect the Corporation easily. it is necessary for the
company always develop their technology an upgrade on the regular basis so they can be stay in
the competition. they should adopt new technology an throw away the old which one they were
using . Microsoft puts the plenty of funding towards the research, innovation Anne improvement
it helped them to take competitive advantages and they are able to show their Presence. This
company is coming up with the new technology an advanced technology that is making them one
of the top software selling company and they are able to impress their customers with an
additional features and software’s.
Environmental factor
It is necessary for the Microsoft company to give their contribution toward the environment
where they are operating their business. It will help them to create good image in customers
mind And they will able to get good support from government. they are top brand within the
technology industry Anne they are having good presence in the market so they can aware people
about the environmental issues like climate change and other factors that are affecting the
environment badly (Li, G.R. and et.al., 2019). they can influence people to be aware of this
problems and they can run some programmes where they can support to reduce climate change
effects And other problems related to the environment.
Legal factor
Microsoft is an one of the top technology based company who are having presence all over the
world so it's creates more chances for them to Getting a legal issues. The total lawsuits pay-outs
this company has given till now is around $9,000,000. The company entangled into the legal
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imbroglio When they are more than 8000 former and current employees failed to lawsuit against
the company for gender discrimination at their workplace. According to the lawsuit it explains
that this company systematically discriminate against the item employs an female engineers. It
was alleged That One out of 120 gender discrimination complaints made by the female
employees of this company and it was looked upon by the Microsoft internal complaint
investigation team. in the year 2081 of the persons case on Microsoft after a force the windows
upgrades destroy his PC. That person purchase a laptop from Asus and install Microsoft
Windows 7 in there pc (Toppinen, A. And et.al., 2019). The computer become non functional
when the person upgrade its two Windows 10 and it get failed. The company needs to be very
careful in two days time to satisfy the customer needs and their demand at the sometimes
keeping in their mind that nobody is discriminated on any kind of basis.
SWOT analysis of Microsoft
Strength
Brand reputation- Microsoft has good brand reputation in all over the world and they are first
most valuable brand globally. According to the list off Forbes this company is 7th most reputed
in international market.
Strong distribution channel – Microsoft is selling their products in all around the world and their
products are easily available everywhere this shows how strong their distribution channel is.
They are major computer hardware producers for the brands like Samsung, Lenovo, Dell etc.
Customers of this all brands get pre installed Microsoft software in their computers and laptop
(Fernández-Olmos, M. and Ramírez-Alesón, M., 2017). laptops and Microsoft software are
dependent on each other for selling their products.
Weakness
Dependent on hardware manufacturers- Microsoft Is an top software company but still they are
dependent on the other companies computer hardware manufacturers to develop the product that
run Windows First off if the cheap and popular alternative OS would appear, hardware
manufacturers may simply choose alternatives.
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slow innovation – This company has huge R&D Resources and better position within a market
with innovative product but they are getting failed in all this. It had opportunity to be the first
player and online advertising but they are continuously missing this Opportunities.
Opportunities
Cloud based services – Microsoft company can expand their business an grow rapidly in the
market if they Expand they are cloud based services and software because the demand of cloud
bed services is increasing day by day and it can provide competitive advantages to the Microsoft.
it is necessary for the company to grab this opportunity and show their presence.
Mobile advertising- Mobile advertising is increasing day by day Anne companies within
technology industry can see rapid growth and double digit and few year (Hur, J. WW., Shannon,
D. and Wolf, S., 2016). Microsoft have a great opportunity because they provide mobile
advertising services to The customers So they can take competitive advantages in a market where
they are operating their business.
Mobile device industry- Smart phones and tablet markets are growing every year and it can be
opportunity for Microsoft if they launch collaborative mobile devices within a market. They can
launch their own devices with a better improvement so they can take competitive advantages
within a market and they can show their presence.
Threats
Competition- Competition within technology industry is increasing day by day and it’s creating
threat upon Microsoft. Microsoft is more than ever on the pressure to introduce successful OS
both in mobile markets and pc. They are getting huge competition from the brands like Apple
and Google who have already established their position within a market.
Changing customer needs and habits- Needs often customers and their demand is changing
continuously (Doan, C. D., Tavernier, I., Okuro, P K. and Dewettinck, K., 2018). customers are
shifting from the buying laptops and now they are like to buy tablets and smart phones, where
Microsoft has only modest market share and may never establish itself. The customers So they
can take competitive advantages in a market where they are operating their business
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