Strategic Analysis of Microsoft Corporation: A Management Report

This report provides a comprehensive strategic analysis of Microsoft Corporation. It begins with an executive summary outlining the company's goals and objectives, followed by an in-depth analysis of the market and industry. The core of the report applies Porter's Five Forces model to assess the competitive landscape, identifying key threats and opportunities. The analysis reveals that Microsoft employs a differentiation generic strategy to maintain its competitive advantage. Furthermore, the report explores Porter's generic strategies in detail, concluding that differentiation is the most effective approach for Microsoft. The report also includes recommendations for the company's strategic direction and concludes with a summary of the key findings, highlighting the importance of strategic management in achieving organizational goals.

Strategic Management

EXECUTIVE SUMMARY
Strategic management is procedure, in which continuous planning, analysing, monitoring
as well as assessment is done of all the activities and functions of an organization, in order to
meet its goals and objectives. For conducting this report the Microsoft company is selected. In
this analysis of market and industry is conducted in brief which is helpful for management of
company in effective working. Along with this porters five force model is considered for
analysis, from this it is analysed that, there are numbers of threat present in market in against to
Microsoft's and from overcoming from all thereat, the differentiation generic strategy is adopted
by management of Microsoft's company. In addition to this, porter's generic strategic is also
illustrated in this report and analysed that, the Differentiation generic strategic is best strategy,
which can be used by the management of Microsoft's in effective and efficient manner. As this
helps in making the product different and innovative form their competitors product.

Table of Contents
INTRODUCTION...........................................................................................................................5
MAIN ANALYSIS..........................................................................................................................5
Porter's five force model.........................................................................................................6
Porter's Generic Strategies......................................................................................................9
RECOMMENDATIONS...............................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The strategic management refers to the process of continuous planning, analysing,
monitoring and assessment of all important function of business organization which helps the
management in meeting and achieving the organizational goals as well as its objectives. For
conducting this assignment Microsoft company is chosen, the Microsoft is a corporation of
American multinational company, which deals in different software, which helps in effectively
running of the computers (Hahn, 2013). Along with this, the management has adopted different
strategies for their business organization which is helpful for them in garbing the effective
market with the help of their product and services. In addition to this, some recommendation are
also stated for the company, which the management can applied in their business organization as
they are beneficial for them.
MAIN ANALYSIS
Overview of organization
Microsoft Corporation is an American multinational technology company, and leading
developer of PC software, started in April, 1975 in Albuquerque, New Mexico, U.S and founded
by Bill Gates and Paul Allen. The company headquarter is located in Redmond and Washington
in United States. The Microsoft's has numbers of products, such as Microsoft Windows, line of
operating systems developed for computers, the Microsoft Office application, and some web
browsers like Internet Explorer, Edge and many more. It also deals in hardware products such as
Xbox, video game software, Microsoft Surface, touch screen personal for computers and many
more products like this. With help of ample numbers of products, the company has created good
brand image and goodwill of their company which helps them in generating more profit.
The Microsoft is a biggest and leading software developing company, which serve their
product in all across the world. This company is started in 1975 by a college dropout student,
named Bill Gates and Paul Allen (Grunig, 2013). The management of Microsoft is focusing on
reaching effective profitable and maximum numbers of customers, so they can serve their
services effectively and efficiently. The mission of Microsoft is setted, as to empower each and
every people as well as business organization for achieving more competitive advantage. The
company believes in what people make and create, in an proper manner. Along with this,
company focuses on their effective organizational culture, ethics, norms and their values. As they

also value their citizenship, Trustworthy computing, their innovation, diversity and inclusion as
well as organizational working environment effectively. The Microsoft organization has their
own aim, objective, goals and their motive, such as motive is to increase their employee
productivity, performance and their working efficiency, which helps them in achieving and
gaining more profit.
Current scenario of business organization - Microsoft Company:
According to present scenario, the Microsoft has created effective goodwill in market
with different products range. They always want that they cover a large area of market so that
they are known more by its customer's as compared to its competitors. Microsoft is making more
efforts to sustain in this competitive market today. They want to increase employee efficiency
and their effectiveness to achieve increased profits (Hair and et. al., 2012). Stakeholders are very
important part of every company and they play a very important role in their overall
development. Microsoft is a leading company today in the market of electronics. It provides
different products such as electronic goods, software, hardware, networking services and many
more.
After this, company also launched window surface to beat its biggest competitor Apple.
The Microsoft's organisations strongly believe that, the developing, implementing and managing
their plans strategically and effectively, will helps them in getting more competitive advantage as
comparison to their competitors. In present context, Microsoft needs to identify their target
market and then analyse market in a proper way. This will lead to discovering of tastes and
preferences of its prospective or future customers. For the above report porters five force model
can be used by the management of Microsoft's, which will help in modifying their products and
services, according to inductry analysis and also leads to increase in growth of company.
Porter's five force model
The porter's five force model is a tool which helps the management in analysing the
overall industry analysis of their business. It is introduce by Michael E. Porter, and this
framework is published and recorded for the first time, in Harvard Business Review in 1979. The
porter's five force model includes five forces that are Bargaining power of buyers, Bargaining
power of suppliers, Threat to substitutes goods, Threat for the new entrance, Threat to
competitive rivalry.

All elements of this models, helps the management in effectively analysing market as
well as their business organization and focuses on developing and implementing the effective
business strategies. In context to Microsoft, this helps the management in generating effective
and profitable strategies which helps in increasing the productivity as well as profitability in
effective and efficient way(Hill and Schilling, 2014).
Along with this, these all forces of this models determine the industry structure and
culture along with analysing the level of competition in industry. In addition to this, the stronger
competition in market, will results in less profitability. It is talked about the barriers to new
entries in market, influence the few buyers and suppliers for dealing with them, as increase in
substitute of their products as well as their competitors will leads to low and decrease in the
profitability of business organization.
Microsoft Porter's model for company is described under below:
Bargaining power of buyers: In context to Microsoft company, the level of buyer
tendency to select the effective products and service of Microsoft’s is analysed to be low (Hill,
2017). The reason is that the, products and services of Microsoft company is highly convenient
and user friendly.
The bargaining powers of buyers is low because Microsoft is providing high quality
applications and software's at affordable price and there is no competatior present in front of the
company in current time. Also, the numbers of buyers are very high, which means, the
bargaining power of buyers is low in nature.
Bargaining power of suppliers: The Bargaining power of suppliers of Microsoft is very
low as company has many of suppliers available. In context to Microsoft, management should do
analysis their market of suppliers, such suppliers are Datawatch Corp, Adtran Inc., Cisco System,
Nacco Industries inc. and many more. The Microsoft's company creates a good relationship with
heir suppliers which is beneficial for both of them. The Bargaining power of suppliers is very
low as Microsoft has many suppliers, if any suppliers raise their prices then management of
Microsoft will easily make switch to other supplier, as it will inured less cost to company and
beneficial also (Hitt and Hoskisson, 2012).
Threat to substitutes goods: The threat of substitutes goods occur when new product
and services enter or introduce in competitive market. In other words, when new products
includes similar features, characteristics and functions, and which focuses on satisfying the

customer needs and requirements in different various manner. So that, the management can
effectively grab the market and also focuses on increasing the profitability of business
organization. Some examples of substitute of Microsoft’s are Dropbox and Google Drive, as they
have inbuilt stronger technology in their products. The threat of substitute for the Microsoft’s
product and service are very low. As they offers good value of offering products, which is unique
and different from current offerings of products and service of industry. Some software
(products) of Microsoft are, Office 365 persona, Office 365 home, windows, office, servers,
Skype, visual studio, Dynamic, Xbox. As all of these products has their own unique features,
which differentiate them with others products.
Threat for the new entrance: In context to Microsoft, the company deals in software
business. According to this, the threat for new entrance for Microsoft’s is low, as it is a biggest
and leading company, which focuses on providing effective products and service to their
customer. Along with this, starting the new software business, the company is required a huge
investment, cost and skilled and specialized employees as well as experienced human resource in
their company. In addition to this, the Microsoft’s company introduce effective products, which
includes cost effective software for their customer with high quality service (Hitt and Duane,
2017).
Threat to competitive rivalry: The threat to rivalry among competitors are intense as
the Microsoft Corporation perform their operations in competitive Business in software &
services industry which helps the management in gaining more and more profit. In context to
Microsoft’s, the company has many competitors in market, which creates threat for company.
Such competitors are listed as Apple, Oracle, IBM, Google, SAP and many more. As all of these
companies has enhanced their market shares and focuses on grabbing the ample numbers of
customers all across the world. As such Microsoft's company focuses on providing a wide range
products and services effective and efficient mannerly. The aid to overcome from this threat is
that the Microsoft, should focuses doing the innovation in their product, and make its products
different form their product.
By analysing all five competitive forces of porter's five force model of Microsoft
Corporation, it is analysed that, there are ample numbers of threat present in competitive market.
In addition to this, the management of Microsoft, should adopt differentiation generic strategy
for overcoming from all these threats, which will helps the management in capturing profitable

market effectively and efficiently. Along with this, the Porter's Generic Strategies is described in
brief below:
Porter's Generic Strategies
There are many strategies which Microsoft's company can adopt which are beneficial for
them. As business strategies plays an important and vital role in each and every business
organization for effective running and operating of activities. The management of Microsoft's
focuses on adopting Porter's Generic Strategies in their business organization, as it leads to
beneficial for the company (Keupp and Gassmann, 2012).
Porter's Generic Strategies: This strategy helps in analysing and describing how can a business
organization pursue and survive in competitive market for gaining competitive advantage from
across the world. It includes three generic strategy that are cost, differentiation and focuses
generic strategy. This strategy was introduced by Michael E. Porter in 1980, the strategies
introduced in this model are very effective in implementation in any business organization, for
smoothly and properly operating all operations and function of business organizations.
According to Porter, each and every business organisations can adopt any strategy, which
helps them in eliminating of wastage resources form their organization effectively and
efficiently. The main objective of these strategies is to assist and show the directions to business
organisations which helps them in achieving and attaining competitive edges. In this, each and
every strategy has created their own effectiveness and its uniqueness which is more important for
analysing and identifying the best & correct strategy for Microsoft's company. In context to
Microsoft, the management can adopt different various strategies, which are illustrated below in
brief ( Meyer and Meeks, 2017).
Cost Generic Leadership Strategy: Porters generic strategy is a way of becoming a cost
leader. It basically deals with providing products and services to customers low in price and best
in terms of quality. Companies make attempts to reduce their overall cost by any means as
reduction in cost can only help them in increasing their profit margin. It is not easy for
companies to become a cost leader. As they have to specialize in their operations and functions,
only then they will be able to increase efficiency and effectiveness of their operations. Price is
the most important factor which must be taken care by business organization.
In context to Microsoft's company, this strategy is beneficial is they focus on providing
high quality product and services in low price. The implementation can be done with the help of

cost cutting, the manager can adopt various methods, like total quality management, six sigma,
lean production method, federal innovations, as this will help the management, in focusing on
cost as well as quality of their product.
Differentiation Strategy: To sustain in market for long term it is important for company
to have certain differentiating feature. This will provide them competitive edge as compared to
its competitors . Company can choose any feature which could provide them a different identity.
For example if company is dealing in products then differentiating factor can be its price,
physical appearance, colour, texture etc. Depending upon product. In context of Microsoft the
management should focuses on their product differentiation, as they can also introduce new
product with new feature of artificial intelligence, new software, new technology and make
product better then their competitor.
Focus Strategy: The focus generic strategy states that, effective and profitable niche
market are to be considered by business organizations with a aim of offering different choices.
This helps company in selecting different competitive scopes and areas to apply this strategy. A
business area is selected according to focus strategy of Porter's generic model effective and
efficient way (Priam and Carr, 2012). There are basically two types of focus strategy - cost focus
and differentiation focus. In cost focus Microsoft's application is in a way that its prices are
always affordable by its customers in comparison to its biggest rival Apple. Microsoft focuses on
continuous innovation in its products time to time. This helps Microsoft to apply focus strategy
in long term. It could be understood with a good example, where Microsoft is looking forward to
launch a new software. Here, organisation will basically compare it's software with it's
competitors like Apple and then fix the cost of it (Software) in order to sustain in the market for
a longer period of time.
Hence forth, it is concluded that, the Microsoft Corporation has adopted best strategies in
their business organization, that is differentiation generic strategy, which helps the management
in generating competitive advantage from the marketplace. The differentiation strategy,
differentiates the product with unique characteristics and features, as the Microsoft's introducing
their product with new updated technology and artificial intelligence which creates their product
and services different for others. Along with this, it focuses on organization mission, aim,
objective,vision statements, goals and helps the management in capturing profitable market at
national and international level.

The management of Microsoft's should adopt differentiation generic strategy because it
focuses on differentiating the product and services with innovative features profitable market
segment with effective. As company provides many differentiation in their services and products,
with the help of innovation, good quality, differentiation prices, updated technologies and many
more differences.
RECOMMENDATIONS
It is recommended to Microsoft’s company, that they should analysis their effective
market and also conduct proper analysis of their over all industry and strategies which helps in
effective business operations and functions of Microsoft's company in effective and efficient
manner.
Along with this, it is also recommend to company that for tackling the new entrance the
should do innovations in their products and introduce new products in market. If it is talked
about, recommendations for overcoming from bargaining power of suppliers, the company
should focuses on building effective and efficient supply chains, with numbers of multiple
suppliers.
Along with this, the Microsoft Corporation should take effective measure for for tackling
Bargaining Power of the buyers, with the help of building effective and large customers base. As
this will help the company in two different ways such as it helps in decrease the bargaining
power of buyers as well as it also gives an opportunity to the business organization for
generating and increasing its sales with the help of effective and increase in production process
of their product and services.
Also the management, should focuses on handling the problems arise with their substitute
of their products. It is recommended to the Microsoft's to effectively handle this issue with help
of focusing on giving effective services and being service oriented company rather than product
oriented as it attracts the customers. Also considers the need as well as requirements of profitable
customer instead of focusing on what's product customer is buying.
In addition to this, Microsoft Corporation can adopts effective tools and measure for
tackling Intense Rivalry between the existing Competitors of their business organization, of
Business Software & Services industry. By building effective and sustainable differentiation
among competitors, also by creating effective economical scale which helps in competing better

competitions with their Rivalry. Also the company can do the collaborating with their
competitors, which helps in increasing market size instead of competing with small market area.
In addition to this, it is also recommended to the management of Microsoft corporation
that, they should adopt differentiation generic strategy which helps in influencing and attracting
numbers of customers. Along with this, differentiation strategy also focuses creating the product
different form others with the help of introducing Artificial intelligence, updated technology,
best quality along with this, also focuses on achieving the aim, objective, mission, vision of
company. In other words, the differentiation strategy includes unique and different products
which are offered by organisation to their profitable customers.
CONCLUSION
It is concluded from the above report that strategic management is an essential factor of
an organisation. This is basically alignment of the business goals with strategy of the company. It
is beneficial for company to have an effective strategic management as it will help in fulfilling
the demands and needs of organisation in an effective manner. Strategic management consists of
planning, accessing, monitoring and accomplishing targets and goals of the organisation. It is
essential for each and every company to analyse market for increasing the level of productivity.
As strategic management is important for efficiency and productivity of the company so every
company must implement this within the organisation.

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