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Microsoft Corporation

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Analysis of Historical Development and Current State of Microsoft Corporation

Firstly, the success of the company in many cases is dependent on its leader. Therefore, in order to realize why Microsoft Corporation occupies the leading position in the world, it is necessary to analyze the steps that the leader has taken in the course of historical development of the company. Talking about Microsoft Corporation, the company’s leader is Bill Gates who is the greatest entrepreneur of the 21st century. The first step he has taken is determination. In 1975, Bill left Harvard and together with his friend Paul Allen founded Microsoft. They were not afraid of future difficulties because their goal was clearly defined, namely to develop software for the newly emerged PC market (Clark & Salisbury, 2006, p. 920). The second step is the opportunity to catch the chance. With the introduction of the first PCs by IBM in 1980, Microsoft did everything possible to develop an operating system for them. The invention of DOS helped Microsoft not only to achieve this objective but also to become the most popular standard for PCs in the world (Riper, 2011, p. 308). The third stage is fighting with competitors. In 1983, to be in the same league with Apple Macintosh, which sported a graphical user interface, Microsoft created Internet Explorer and version 1.0 of Windows operating system. The last stage is constant improvement. To adjust to the changing needs of the society, Microsoft provided users with new updated versions of Windows operating system. For example, Windows 95, introduced in 1995, was a radical departure from the previous as its principal innovation was 32-bit memory addressing with protected memory and independence from MS-DOS (Ritchie, 2003, p. 279).

Nowadays the majority of people define Microsoft Corporation as the leading company in the field of software. Almost every person has in his or her PC such Microsoft applications as Internet Explorer, Media Player, and MS-Office Suite consisting of Word, Excel, Power Point, Outlook, and Access. Almost all Microsoft products are complementary to a member of the Windows family of operating systems for personal computers and servers (Economides, 2003, p. 3).

Secondly, one can reveal the present position of Microsoft Corporation on the worldwide market with the help of analyzing concrete case studies. The first case study shows that Microsoft helps business companies to be successful. According to it, Raritan Bay Federal Credit Union upgraded its Windows XP PCs to mobile PCs running the Windows 8 operating system so that it can offer modern financial services (Microsoft Case Studies, 2013). With the help of the use of Windows 8-based mobile computers, RBFCU can serve customers more promptly, calculate and post interest rates faster, and enables employees to work in different conditions (Microsoft Case Studies, 2013). The second case study proves that Microsoft is helpful for people with special needs. At the Abu Dhabi Center for Autism, Microsoft through its assistive technology device the DynaVox Maestro, built on the Windows 7, helps students to communicate, interact with teachers and school peers, develop language skills, and successfully function in the society (Microsoft Case Studies, 2011).

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Finally, it is difficult to imagine what Microsoft will prepare for its users in the nearest future. Nowadays people have the possibility to use Windows on their mobile phones. Thus, it is possible that in a few years, Microsoft managers will provide users with penetration of Microsoft in almost every sphere of their life. For example, cars will be equipped with special small computers, based on Windows, and toys for kids will be running with the help of Microsoft applications. Thus, one might formulate the motto of changes in such a way Microsoft is everywhere.

Microsoft Corporation is a leading software manufacturer in the modern world. One can analyze the history of its development from the point of view of steps that the company’s leader Bill Gates has taken on the way to its success. They are as follows: determination to open the new company, the opportunity to seize the chance proposed by IBM, fighting with competitors, and constant improvement. With the help of regarded case studies with Raritan Bay Federal Credit Union and the Abu Dhabi Center for Autism, one can indicate such benefits of Microsoft as strong leadership and a wide range of productions, adjusted to the changing needs of the modern world. However, the biggest disadvantage of Microsoft is illegal and unethical monopolization of power. It does not give the opportunity to reveal the potential of other smaller companies. It is difficult to predict the future of Microsoft Corporation. Nevertheless, it is feasible that Microsoft will penetrate into different spheres of life of its users from cars to toys in order to make the life of people easier and extend its influence.

  • Bove, T. (2005). Just say no to Microsoft: How to ditch Microsoft and why it’s not as hard as you think. San Francisco, CA: No Starch Press.
  • Chen, B. (2011). Always on: How the iPhone unlocked the anything – anytime – anywhere future and locked us in. Cambridge, MA: Da Capo Press.
  • Clark, C. E., & Salisbury J. N. (2006). The enduring vision: A history of the American people. Boston, MA: Cengage Learning.
  • Economides, N. (2003). The Microsoft antitrust case: A case study for MBA students. New York, NY: Stern School of Business.
  • Microsoft Case Studies. (2011, April 11). Abu Dhabi center for autism. Retrieved from  click here
  • Microsoft Case Studies. (2013, December 11). Raritan bay federal credit union.
  • Riper, A. (2011). A Biographical Encyclopedia of Scientists and Inventors in American Film and TV since 1930. New York, NY: Scarecrow Press.
  • Ritchie, C. (2003). Operating systems incorporating UNIX and Windows. London, UK: Cengage Learning.

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Essay: Microsoft Corporation Essay

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Microsoft Corporation Essay

Microsoft Corporation: A Research Project

Since its inception in 1975 by co founders Bill Gates and Paul Allen, Microsoft Corporation have steadily and rapidly become one of the world’s most successful companies, with brands amongst the most global. It now commands a position among the top worldwide corporations, ranking number three in the FT Global 500while enjoying revenues in excess of $36bn.

This essay seeks to provide an overview and history of the company, while undertaking a succinct analysis of its business successes. The reasons for this success of the company shall be explored, and the prospects for continued future prosperity will also be assessed.

Introduction and History

Microsoft, a public US company trading shares on the NASDAQ stock exchange in New York, is active globally, with offices in over seventy countries. For an overview on Microsoft figures, see Appendix A. Originally set up to make operating systems for the Altair 8800 system, the company has since produced industry benchmarks in the market, first with MS-DOS in the 1980s, and with Windows in the 1990s.

By dominating this market with a near total monopoly on the world’s home and business PCs, it was in a position to develop software applications to complement and support its product range. The most successful examples of these include Microsoft Office, a clutch of desktop publishing applications, and more recently the online integrated programmes and services of MSN.

Microsoft and their Markets

According to their website, Microsoft loosely define their three core markets as:

  • Entertainment
  • Platform Products & Services

The development and subsequent strength of the brand has revolved around specialised marketing to each of its target audiences. Fill (2002) identifies the company’s overall marketing strategy as taking a radical new approach to the needs of the market and break away from the way in which brands in the sector are normally perceived. Although Microsoft’s core markets now appear to be in maturity, it initially sought to build presence in these markets via distinct product positioning which set it apart from its competitors. The strategy is evidently a success, as applications such as Office and Internet Explorer rapidly became benchmarks.

Microsoft’s website offers a good indication of how the company very clearly segments its markets. Business, for instance, is split into areas covering all aspects of industry (education, finance, retail etc.) while home markets concentrate on education, entertainment and utility segments.

Within its business market, Microsoft offers integrated applications tailored to specific industries. It aims to cover all business technology needs over two distinct areas: business solutions such as supply chain management and customer relationship management, Windows Server System, covering network and hardware management.

On a more micro level, the company aim to tailor its services to customers via its Certified Partners scheme. Using a worldwide network of regional business units and individual professionals, it can be sure that its customers are receiving service from people who know the industry or are more familiar with local business issues. Functions performed in this regard include what its website refers to as add-in products to build on standard functionality to meet industry-specific and company-specific needs. Such personalised service is something often found lacking in large multinational organisations that often use a one size fits all approach to whole territories. The company’s contact with its customers extends as far as individual training and certification on how to use its software.

Using this multi-functional approach to business solutions, the company is able to frequently interact with its business markets, helping consumers to believe the company is marketing directly to their individual needs. East (1997) highlights the importance of retention in durable markets (i.e. one off or long lasting purchases). He argues that the cost of losing customers in such markets are high as setting-up costs often include higher overheads associated with the purchase. Microsoft appears to have been very successful in retaining its customers, due in part to convenience or the overall high cost of switching. It can be assumed that the interaction the company appears to have with customers creates a reinforcement effect, which will increase a customer’s propensity to remain loyal to the company in future purchases, defined by East (1997) as learned reinforcement.

Using a combination of strategic partnerships with PC manufacturers, as identified in their 2004 annual report, proactive marketing and the strategies discussed below, Microsoft has managed to build and maintain a near complete monopoly in its core markets.

Understanding and marketing to the target audience

According to their website, Microsoft Corporation would define their business position as the worldwide leader in software, services and solutions that help people and businesses realize their full potential. The company’s success in adapting to changing market conditions and demands represents perhaps one of the key reasons for their continued success. In addition, it is their ability to exploit its strengths which help it to maintain its position, a point which will be explored in greater detail later in this essay. The company, with vast amounts of funds available to formulate the kinds of integrated global marketing campaigns historically observed (over $8.3bn spent globally on marketing activity in 2004), has nevertheless attempted to understand its market from a corporate level in many ways.

Commitment to Online Development

By placing the evolution of its applications into Web-based services for enterprises and consumers (Hoover 2005) at the forefront of its product development strategy, Microsoft is demonstrating its perception that the Internet is and will continue to be important to its consumers. In addition, it has attempted to integrate its Hotmail email programme into a more far reaching MSN passport system, and relied on online functionality for the success of its games consoles. Davenport (1997) acknowledged that the company identified as far back as 1997 that they needed to embrace the Internet and incorporate it into virtually all products and services. Whether or not such a strategy will continue to prove successful remains to be seen, but success should be assisted by Microsoft’s original online vision and the experience it has gained since then.

Microsoft’s Corporate Strategy: Organic Growth & Acquisitions

During its lifetime, Microsoft has pursued an aggressive policy of take-overs and acquisitions. Via this strategy, Microsoft has shown that it is ready to adapt quickly to market conditions in order to appeal to its consumers. The company has carried out over 50 acquisitions in the last ten years. One of numerous examples of this includes the 1999 purchase of Hotmail, the world’s most popular free email service, and reflected Microsoft’s sound belief in the strategic need to deliver high quality free email services to its customers in the face of strong competition from other free email providers (Yahoo!, Lycos etc.). In addition, Microsoft has shown that it is prepared to purchase companies who could improve their overall product quality. Prior to the launch of its Xbox games console, the company embarked on a strategy to secure exclusive rights to top rated games, including the purchase of developer Bungie, creator of the popular game Halo.

The approach has allowed the company to acquire competencies it may have lacked if it had followed a strategy of internal development, and allowed it to bring high quality products to market within a relatively short timeframe.

Concurrently, Microsoft has strongly pursued a policy of internal development, placing a high level of emphasis on research and development. The company state in their 2004 annual report that the concept of integrated innovation was key to their strategy, which aims to deliver even greater value to customers. Hence, Microsoft has invested a great deal in product and service development (over $7bn in 2004). The company’s willingness (something which may or not have been enforced upon them for legal reasons) to allow third party companies to complement their products demonstrates an evolution in strategy. Such a strategy would seem to be complimentary to their competence of moulding other company’s products to fit their own product output as observed in the high number of acquisitions that have taken place. Hence, this type of integrated innovation would appear to see Microsoft playing to their strengths when delivering products to their markets.

A Workforce that Understands Technology Markets

According to Davenport (1997), Microsoft has built up a reputation for employing highly skilled individuals who understand the business and the industry. It is argued that, in doing so, the company’s operations are able to better adapt to the industry and the observed changes in markets. The company’s marketing activity, for example, must be able to communicate how the company is striving to meet the changing needs of the consumer. Highly skilled workers, therefore, will help the company to develop and implement strategies successfully as needed.

Such a reliance on highly knowledgeable staff in which product development occurs in parallel to understanding what the customer requires may be one of the main factors in maintaining its position. With a marketing department that understands the technology market and anticipates its changes, the company is able to retain its image as technology and product innovators.

The above has summarised many of the ways in which Microsoft has sought to appeal to its various target audiences. Observing the company’s competitive position may also help to identify the decisive factors effecting future continued success.

SWOT: An Analysis of Microsoft

For a full outline of identified strengths, weaknesses, opportunities and threats to the company, see Appendix B. Some of the key issues facing Microsoft as it aims to maintain past successes include the following.

In the past, Microsoft has been extremely successful in developing new products by promoting, or bundling, them with existing brands. The Windows operating system is perhaps the best example of this, where applications such as Internet Explorer and Media Player have become industry benchmarks due to their out of the box availability. By exploiting the monopoly power it has on PC operating software, it is in a position to influence the success of strategic areas of future performance. In an industry where the battleground for future dominance in the technology industry is likely to be aggressively fought, as companies increasingly move towards wholly integrated media devices, the strategic advantage of such a means cannot be overstated.

Legal Lawsuits

Due to an observed monopoly Microsoft enjoys in the home PC market, it could be considered inevitable that competitors will seek to undermine or diminish this power though legal means. It is, however, stated in Microsoft’s 2004 annual report that major progress has been made to stem legal action and improve relations with governments. Nevertheless, the threat of lawsuits remains one of the greatest threats to Microsoft’s current monopoly of its market position.

Current examples:

  • Recent payment to RealNetworks, Inc. ($361 million)
  • Recent Novell settlement

Emerging Online Brands

The emergence of online global brands has led to strong competition, particularly within the media market, a developing Microsoft market according to Hoover (2005). Google and others are increasingly bringing a greater range of products to the market, many of which directly compete with Microsoft’s own product portfolios.

What perhaps differentiates Microsoft from many of its more traditional competitors such as IBM is its globalised nature. Anholt (2000), as cited by Fill (2002) suggests that by using technology in place of more traditional physical distribution channels Microsoft was able to negate the inefficiencies associated with the latter. Upcoming online brands, on the other hand, do not suffer the same traditional barriers, and may in time create better conditions to compete effectively with Microsoft.

Conclusions

As the technology market evolves, it could be speculated that the successful companies within the industry will be the ones that are able to best suit the changing needs of consumers. If the upcoming trend towards technological integration of media products predicted by Microsoft and others does occur, the company is seemingly well placed to do this.

The many analysed strengths of Microsoft detailed in this essay appear to be particularly pertinent to the evolution of the market’s needs. The company appears to have sensibly accepted the role of integrating competing products within its own products, which may in future assist it in maintaining its position from a legal perspective. Adaptability in the market place, as it has been in the past, may prove to be decisive as competition from Google and other online brands strengthens.

Microsoft Overview

  • Company Name: Microsoft Corporation
  • Current CEO: Steven A. Ballmer
  • Company Headquarters: 1 Microsoft Way
  • Redmond, Washington State, USA
  • Shares listed on: Nasdaq (USA)
  • Current Share price $28.07
  • (as at 18/11/05)
  • Year high $28.00
  • Year low $23.82
  • 2004 Sales Revenue $36.835bn
  • (Year ended June 30, 2004)
  • 2004 Net Income $8.168bn

SWOT Analysis

Bibliography.

  • East, R. (1997), Consumer Behaviour: Advances and Applications in Marketing FT Prentice Hall, UK
  • Fill, C. (2002), Marketing Communications: Contexts, Strategies and Applications (3rd Ed.), FT Prentice Hall, UK
  • Davenport, T.H. (1997) Knowledge Management at Microsoft,
  • Web: 2005 Sales, source Hoover’s Microsoft Company Report 2005

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