Microsoft Business Statergy

1. Microsoft Corporation
The Business Strategy
Author:
Saurabh
Kamaldeep
Laltendu
July 15th 2012
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2. Quotes from Bill Gates
Every day were saying, „How can we keep this customer
happy?‟ How can we get ahead in innovation by doing this,
because if we don‟t, somebody else will.”
“Your most unhappy customers are your greatest source of
learning.”
“Success is a lousy teacher.
It seduces smart people into thinking
they can‟t lose.”
“As we look ahead into the next
century, leaders will be those who
empower others.”
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3. Index
We have partnered
• Microsoft Profile & Offering
• Vision Mission & Value
• SWOT
• Porter's Five Force Model
• Microsoft Finance
• Future Strategy
• Q&A
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4. Microsoft Corporation
Computer software
Industry Online services
Video games
Founded Albuquerque, New Mexico, United States (April 4,
1975 (1975-04-04))
Founder(s) Bill Gates, Paul Allen
Headquarters Microsoft Redmond Campus, Redmond, Washington, U.S.
Key people Steve Ballmer (CEO)
Revenue US$ 69.94 billion (2011)
Operating Income US$ 27.16 billion (2011)
Net Income US$ 23.15 billion (2011)
Total Assets US$ 108.7 billion (2011)
Total Equity US$ 57.08 billion (2011)
Employees 92,000 (2011)
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5. Important Milestones
Date Event
1975 Microsoft founded
Jan. 1, 1979 Microsoft moves from Albuquerque, New Mexico to Bellevue, Washington
Aug. 12, 1981 IBM introduces its personal computer with Microsoft's 16-bit operating system, MS-DOS 1.0
13-Mar-86 Microsoft stock goes public
22-May-90 Microsoft launches Windows 3.0
Aug. 24, 1995 Microsoft launches Windows 95
25-Jun-98 Microsoft launches Windows 98
Jan. 13, 2000 Steve Ballmer named president and chief executive officer for Microsoft
Feb. 17, 2000 Microsoft launches Windows 2000
22-Jun-00 Bill Gates and Steve Ballmer outline Microsoft's .NET strategy for Web services
31-May-01 Microsoft launches Office XP
Oct. 25, 2001 Microsoft launches Windows XP
Nov. 15, 2001 Microsoft launches Xbox
Nov. 7, 2002 Microsoft and partners launch Tablet PC
24-Apr-03 Microsoft launches Windows Server 2003
Oct. 21, 2003 Microsoft launches Microsoft Office System
Nov. 22, 2005 Microsoft launches Xbox 360
Jan. 30, 2007 Microsoft launches Windows Vista and the 2007 Microsoft Office System to consumers worldwide
Feb. 27, 2008 Microsoft launches Windows Server 2008, SQL Server 2008 and Visual Studio 2008
3-Jun-09 Microsoft launches Bing decision engine
Oct. 22, 2009 Microsoft launches Windows 7
15-Jun-10 Microsoft launches general availability of Office 2010
Nov. 4, 2010 Microsoft launches Kinect for Xbox 360
Nov. 10, 2010 Microsoft launches Windows Phone 7
28-Jun-11 Microsoft launches Office 365
Oct. 13, 2011 Microsoft closes its acquisition of Skype
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6. Product Divisions
Server Entertainm
Windows Online Business
ent
& and Services Division
and
Windows Tools Devices
Live
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7. Windows, Server and Tools, Online Services Division
We have partnered
Windows 7
Microsoft Visual Studio
Microsoft SQL Server
Windows Set of Certification Programs
IT consulting
("Microsoft Consulting Services")
Online service MSN $ search engine Bing
Cable news channel MSNBC
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8. Business Division
We have partnered
Microsoft Office 2010
Outlook
Publisher
Business Visio
MS Project
Enterprise resource planning (ERP)
MapPoint, InfoPath and OneNote.
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9. Entertainment and Devices Division
We have partnered
Windows CE OS for embedded Systems
Windows Phone for SmartPhones
Computer Games - Microsoft
Flight Simulator Series
Entertainment
and Microsoft Office 2011 for Mac
Devices
Xbox 360
Personal computer hardware -
Mouse, Keyboards
Game controllers - Joysticks & Gamepads
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10. Vision Mission & Value
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11. Vision
Our vision is to create innovative technology
that is accessible to everyone and that adapts to
each person's needs. Accessible technology
eliminates barriers for people with disabilities
and it enables individuals to take full advantage
of their capabilities.
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12. Mission & Value
Mission
At Microsoft, we work to help people and businesses
throughout the world realize their full potential. This is our
mission. Everything we do reflects this mission and the
values that make it possible.
Values
As a company, and as individuals, we value: Integrity and
honesty.
Passion for customers, for our partners, and for
technology.
Openness and respectfulness.
Taking on big challenges and seeing them through.
Constructive self-criticism, self-improvement, and
personal excellence.
Accountability to customers, shareholders, partners, and
employees for commitments, results, and quality.
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13. Mission Statement Evaluation Matrix
Concern for
Survival,
Products Growth,
Organization Customers Services Markets Profitability Technology
Microsoft
Corporation Yes No Yes Yes Yes
Self- Concern for Concern for
Philosophy Concept Public Image Employees
No No Yes Yes
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14. SWOT Analysis
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15. Strengths
Windows series, and Windows NT are globally known as the
PC desktop operating system with a market share of 88%
Multinational corporation operating through regional
subsidiaries in more than 60 countries
Relatively rapid product development processes that allow
for timely updating and release of new products
Revenues and profits rising at 30% a year with
merger/acquisition or investment over past five years
Software products have high name recognition, and
consumer acceptance
Top rating from Fortune for best company to work at
Strong reputation for innovative products
Loyal, hardworking, and diverse workforce
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16. Weakness
Dependency on hardware manufacturers to pre-install
Microsoft's PC operating system
Employee turnover has increased from 6% for a ten year
period to 7.4%
Falling sales in the operating systems and server software s

Perceived by many as a cut-throat competitor that uses its
dominant market position to marginalize competition by
stealing/destroying the competition's products, stifling product
innovation, and decreasing availability of competitor products
Little or no significant presence in the wireless market and
Windows CE has been disappointing
Not a key player in the Internet space and few products for
Internet applications
Products have a single application focus and do not work
well with or on-top of other products
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17. Opportunities
Cheaper global telecommunication costs open new markets
as people connect to the Internet
Mobile phone applications and exploitation of personal
digital assistants

Popularity among people for Internet access
The demand for personal computers in American and global
markets remains strong despite the growth and increasing
popularity of personal handheld devices
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18. Threats
Apple and Linux threaten Microsoft's 88% market share of the
desktop operating market
Currency exchange rates negatively impacting revenues in the
global marketplace
Hardware manufacturers (Sun , IBM, AOL, and Apple) are
issuing their own pre-bundled programs on their own hardware
Rapid development of mobile devices that will displace/replace
personal computers
Recession or economic slowdown in global market
Software piracy of commercial and consumer software on a
global scale threatens revenue streams
Technology life cycle is shorter and shorter
Unix dominates high-end mission-critical applications and its
customers do not believe Windows can handle these operations
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19. Porter’s Five Force’s Model
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20. Industry rivalry: HIGH
The intensity of industry rivalry within the enterprise software
industry is affected by several factors:
i) The concentration of competitors
ii) Diversity of competitors,
iii) Product differentiation and
iv) Price differentiation.
Large multinational vendors and a handful of smaller localized firms
compete in the enterprise software industry
Concentration of competitors within the industry is high with big
players such as Oracle, Google, Apple, SAP etc
The companies within the enterprise software/server platforms
industry are very diverse.
Larger companies not only produce and consult on hardware and
software, but also manufacture operating systems, general computer
software, and development platforms
Business Tie-up among Market leaders
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21. Microsoft Vs Competitors
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23. 23

24. 24

25. Threat of New Entrant
Threat of new entrants to OS, Enterprise software industry and
Gaming is low.
 Capital requirements to enter the industry are very large
 Cost to design and develop enterprise software is extremely
high
 Software development process is quite long and expensive due
to the reality of the software development lifecycle.
 Companies within the industry have already achieved
economies of scale, thereby reducing the potential profit for new
entrant
 Considerable product differentiation within the industry.
 If new company had a differentiating software major companies
would takeover the new firm in order to acquire the technology for
themselves.
 Government policies
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26. Threat of New Entrant Cont……….
Threat of new entrants to Mobiles, Browsers and Peripherals is High.
 Capital requirements to enter the industry are low
 Cost to design and develop low
 Many players exists in market and scope for new entrants is
high
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27. Threat of Substitutes
There are few substitute products that compete with enterprise
software.
The old way of maintaining and sharing company information was
manual paper archival systems or printed reports from separate
databases. The modern way of connecting all of a business
information requires enterprise software.
A business could continue with building multiple disparate systems,
however, they would never be able to achieve what an enterprise
software business solution could provide. Therefore, enterprise
software is more flexible, scalable, and less expensive than the older
types of solutions.
The near absence of modern substitutes in the industry is a good
sign for the companies within the industry.
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28. Bargaining Power of Suppliers: LOW
Within the industry, the bargaining power of suppliers is quite
minimal. The main reason is because there are few suppliers with
whom the companies must negotiate.
The fact that enterprise software applications are an intellectual and
intangible product rather than a physical product minimizes the
number of suppliers required.
The main type of supplier that an enterprise software company most
likely has to deal with is one that physically records the media. Since
the cost of physically transferring the software to media is minimal, the
media producers and manufacturers have little effect on the industry
as a whole.
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29. Bargaining Power of Buyers: LOW
The bargaining power of buyers within the enterprise software
industry is fairly minimal for several reasons. First, the concentration
of buyers is growing quickly; however, they are a very diverse and
non-unified group, because they all have different backgrounds and
needs.
Second, more companies are deciding that enterprise software is a
necessity for their business. Therefore, they are often willing to pay
the going rate.
Lastly, there are extremely high switching costs from one supplier to
another, due to the high cost of the related infrastructure for these
types of systems
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30. Financial Performance
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31. Revenue & Headcount Growth – 10 Years
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32. Future Strategy
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33. Managing Weakness
 Migrate perceptions and re-brand - While Microsoft has successfully
begun to alter its reputation among consumers, many IT purists and CIOs
remain leery of Microsoft products because of their image as the evil empire.
To manage this weakness and repair their tarnished image, Microsoft should
re-brand as a company that serves to make business function easier and
seamlessly, through enterprise software solutions.
 Address security concerns - As technology becomes more seamless,
and as devices outside of the PC are used more extensively, consumers are
becoming more concerned about security, especially in the enterprise
software area.
Microsoft is poised to shape consumer preferences in this area, but to do so,
will need to spend considerable revenues in researching and responding to
security concerns.
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34. Investing in Growth
Innovating
Creating demand
Investing in competitors and
Going global
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35. CSC Proprietary and Confidential 35