Microsoft Corporation, Coursework Example

There has been no greater contribution to the tech world than that of the creation and innovation of the Bill Gates and his multinational Microsoft Corporation. Technology is an ever advancingforce and forward thinking trend that will continue to connect millions of people together from different parts of the world. In just about every computer system, users have Microsoft software, and companies around the world utilize its services. Microsoft is one of the leading technology companies that engage in licensing, developing, and supporting a wide range of software services and products. Microsoft is formative in designing and selling hardware, where it is able to deliver online products, services, and advertising to the consumers.Since creating the company in 1975, founders Paul Allen and Bill Gates has increasingly grown at a rapid pace to become one of the most successful, and recognized brands around the world.The Microsoft Corporation is in the top position and ranks as one of the top three Global 500 companies that demand revenues in excess of over $30 billion yearly.Microsoft has developed a formative position as the go-to company for software and hardware. Frontier within the industry that has provided cutting-edge products where the company has been able to adapt to the changing even with increasing competition. The purpose of this essay is toprovide an overview of Microsoft Corporation, while also providing a succinct analysis of the business strengths and weaknesses, new product and service developments, competitive landscape, and marketing strategies.

Business Strengths and Weaknesses

The business strategy of Microsoft has including being the leader in providing personal computers, operating systems, software, and hardware to consumers. It is without a question that many that use a personal computer has used Microsoft products. The leading product is their operating system, Microsoft Windows that has developed throughout time. Microsoft operating systems has gone without major competition since its introduction into the market, as it remains the standard operating system for personal computers. Microsoft defines their three core markets as, entertainment, business, and platform products and services. To date, Microsoft has over 100,000 employees that operate within seven divisions, and offices in more than over a 100 countries. These divisions include research and development, sales and marketing, product support, consulting services, manufacturing and distribution, and in general and administration.

Beginning in 2010 Microsoft has measured its business financials based on the following segments, Server and Tools, Windows and Windows Live, Online Services, Microsoft

Business, and Entertainment and Devices. Based on Microsoft’s Annual Report their revenue is at a staggering $77.85billion, with operating income at $26.76 billion, and a net income of $21.86 billion. (Microsoft Annual Report 2013) From both Moody’s and Standard and Poor’s rating, Microsoft has and has maintained a AAA rating with assets at $41 billion compared to the exceptionally low debt of $8.5 billion. Based on Microsoft’s $314B market capitalization, Microsoft is the 8th largest company in the world by this result.

The strengths of Microsoft Corporation are rooted in their brand loyalty which they has helped to remain the leader in operating systems and software. They make up over 90% of the market share for operating systems to personal computers, as many continue to use the system out of quality and familiarity. Their brand reputation is one of the 5^th most valuable in the world at $57.8 billion. This is translated through greater market share and higher sales. More importantly to a billion dollar revenues in the last five years.

This is helped by Forbes’ ranking of the company as the 7^th most reputable in the world. (Badenhausen, 2013) Microsoft has strong distribution channels, where the company works with all major computer hardware producers that include, Toshiba, Dell, Lenovo, and Samsung. This allows the company to be able to pre-install their software into computers, and help tighten relationships with their investments. Their robust financial performance is a major strength, as the company has grown over 20% in the last five years. Their weaknesses are their poor investments and acquisitions that have not brought in the projected products, and revenues for the company. Many of these investmentsrecently acquired,have been divested and shut down. Microsoft’s dependence on hardware manufacturers puts them at a disadvantage. While they are a leader in software development, they do not produce their own hardware, and depend on manufacturers that help to run their operating systems. They are at a disadvantage if manufactures choose another corporation. Their security flaws are often a criticized by being weak, and least protected against virus attacks. Although Microsoft has been an innovative leader, they have been slow to innovate new products to compete with Apple, Google, Samsung and other companies that have begun to gain market share.

Development of New Products and Services

Dominating the personal computer operating systems thanks in part to IBM, which propelled the company to develop its own Microsoft Windows operating systems. (Bellis, 2014) As the company continues to diversify their products and services to open up more market opportunities to the consumers. In taking a strategic approach in product and service development, Microsoft utilizes their vast resources and acquisition in providing innovative products for the consumers. While continuing to focus on improving and updating old ones. The technical innovations and Microsoft’s leadership position in the consumer markets allows them to hold the position to be unequivocal competitor.  The products and services that Microsoft have developed include Windows, with the latest Windows 8, Windows Server, Windows Live Essentials, cloud-based services such as their internet service, Bing, XBOX 360, XBOX One, XBOX Live services. Microsoft has added new services development include, Microsoft Office Web Apps, Business Productivity Online Suite, and Microsoft Dynamics Online used in Enterprise Resource Planning Services, and Customer Relationship Management (CRM). This division has been one of the largest, with expected GDP to increase as sales increases. The technological innovations from Microsoft’s research and development has allowed them betters opportunities and resources to explore more markets.

Competitors

The development of the Personal Computer (PC) has been by the innovations and creations of several top tech companies that include, IBM, Apple, Xerox, Dell, and Compaq that have played considerable roles in what the PC is presently. However one of the biggest impacts from the success of Microsoft. Apple and Google have emerged the biggest competition, as Apple has taken a greater position within the mobile market, where Microsoft has been slow to advance. Apple has been constantly rolling out new products in the mobile market, as well as an operating system that is catching on as an alternative to Microsoft Windows.  Google is right behind with cloud-based service competitions, quickly gaining market share with consumer friendly products and services. Google has rolled out their own personal computers, as well as mobile devices for consumers at a cheaper price. Threats from global brands that provide open source projects, such as Apache and others is creating a shift from buying PCs to smartphones and tablets . This has been where Microsoft has been slow in development.

Marketing Strategies

Microsoft takes a strategic approach in implementing their market strategy planning, research and development, and testing. They have developed many campaigns that advertised their latest products with the help of creating catchy ads,which provides consumers with information on the products.  Marketing strategies include tapping into the younger markets, as well as the global markets in order to diversify its marketing mix. Their marketing efforts are to continue to market their operating systems as the standard and best. While getting into mobile advertising markets, where they are expected to increase substantially in the next few years. Through marketing objectives that are specific to their numerical goals, they are able to measure their marketing success in identifying their target markets, positioning of competition, and developing new products and services to the market mix.

Conclusion

Microsoft has long held a monopoly on the tech industry as technology has become an every necessity for individuals and businesses around the world. As the boundaries of technology continue to expand, it has afforded many other companies to increase their market share with innovative products. As Microsoft continues to mitigate the competition by staying up to date on the current trends, there are evidence in which suggest they will not be able to hold their top position for much longer. Microsoft has experienced much success over the years, however they are externalities that are threatening their position. With several cases against the company for anti-trust, anti-competitive, and monopolistic practices that have kept the company tied up in court cases. To continue their success as the market leader, they must continue to innovate and bring new products and services to the market. As they face global and national competition as technology is continually changing, Microsoft must continue to change as well.

Bibliography

Bellis, Mary. “Bill Gates-Biography and History”. About. 2013. http://inventors.about.com/od/gstartinventors/a/Bill_Gates.htm

Badenhausen, Kurt. “Apple Dominates List of the World’s Most Valuable Brands.” Forbes. 2013. http://www.forbes.com/sites/kurtbadenhausen/2013/11/06/apple-dominates-list-of-the-worlds-most-valuable-brands/

Microsoft.“Investor Relations”. 2013. http://www.microsoft.com/investor/CompanyInfo/Strategy/default.aspx

Microsoft. “Annual Report 2013”. http://www.microsoft.com/investor/reports/ar13/shareholder-letter/index.html