Introduction
The company known as Microsoft Corporation was developed in 1975 and it develops and sells computer software along with applicable electronics. The most well-known product is Microsoft Windows along with Microsoft Office and Internet Explorer. The creators of the company were Bill Gates and Paull Allen. They had a desire to create a company in which people could have personal computers with matching operating systems. Throughout the years, the company flourished and it is considered one of the most successful publicly traded corporations today (Kelly, 2015). The purpose of this paper is to analyze Microsoft as factors such as environment rating, competitive forces and ability to improve forces are discussed. Moreover, there will be an assessment on the external threats, the strengths/weaknesses, resources, value chain and external/internal environments.
General Environment Ranking
One segment of the general environment that would be ranked the highest would be the Microsoft Business Division which can be ranked under the sociocultural category since it offers a broad line of software such as Word, Excel, Access, etc. This particular impacts the company in a great manner because they are considered the most used platforms for performing daily tasks by both individuals and companies. In essence, without the use of Microsoft Word, many people would feel as if they would have no other software to turn to in the even that they need to create a project or write something. The same can be said with Excel. It has been determined that Excel is the best software to use with regard to analyzing numbers and organizing funds on a daily basis. The Business Division has flourished throughout the years and Microsoft is continuing to expand the line accordingly. Another segment of the general environment that would be ranked at a high level would be the technological environment. As a whole, the company has a great dependency on technology in order to move forward with building the organization even more. In turn Microsoft ensures that the needs of users are met in the best way possible (Kelly, 2015).
Competitive Forces
Within Microsoft Corporation, there are specific competitive forces to take into consideration. With regard to the five major forces, it should be known that there are two that will be assessed. The first one includes the threat of new entrants. The technological industry that Microsoft is in continues to change as time progresses. Moreover, there are additional companies that are striving to be on top with regard to electronics and software. Even on a global scale of operations, Microsoft is extremely well known, but they have to maintain a vigorous stance considering the fact that there are constantly up and coming companies.
The second competitive force that Microsoft should be aware of is the bargaining power of buyers. Fortunately, Microsoft offers a wide range of products on an international level, therefore the elasticity of both the products and the services are high. Even if buyers take the time to purchase certain factors from competitors, they will not be up to par with the standards that have already been determined by Microsoft. In the recent past, Microsoft has addressed this force in a gracious manner. While they are fully aware of the competition that exists, they have still been taking the time to develop new and innovative products/services for the customers so that the bargaining power remains (Stucke, 2013).
Ability to Improve Forces
In order to address the forces as stated above, it may be necessary to develop a strategic plan of action moving forward. For example, with the threat of new entrants, Microsoft can ensure that they are reaching their highest standards in terms of innovative and creative projects and processes. In essence, they should never fall stagnant and they should maintain a strong level of advancement. With regard to the second force known as the bargaining power of buyers, they should also ensure that they have a wide variety of products that are unique to Microsoft. While the company seems to be doing well in today’s society, there is no guarantee in the world of technology. With an increase of variability, Microsoft then has the ability to control the buying power so that they can progress in a positive manner.
External Threats
Since Microsoft is considered one of the largest companies in the world, there are many external threats to be aware of. The first one includes the immense competition with regard to software products. In today’s society, technology is the leading field where people are constantly developing new protocols that can be used on computers. Many of those protocols are new software which can potentially make the lives of people much easier. As a whole, it is almost as if the company is pressured to ensure that they develop new software for the mobile markets and for personal computers. They already have large competitors such as Apple and Google, therefore there is a need for new strategies.
An additional external threat is the fact that customers’ needs and habits tend to change with the times. Currently, most people are buying laptops so that there is a level of efficiency in their lives, however in a few years, more people may want to buy other devices such as tablets so that they could keep up with the times. As a whole, Microsoft should be aware of the fact that needs are constantly changing. So far, they worked diligently in order to maintain a proper pace since they are trying to outperform Apple. To go along with that external threat, one last implication to be aware of are the projects that are considered to be open sourced. This means that there are new devices that are now coming into the market, and Microsoft needs to ensure that they are aware of the ramifications towards their own company. Again, with strategic planning, there is an allowance to succeed (Yesilurt, 2016).
Strengths and Weaknesses
The largest strength with regard to Microsoft is the fact that the company leads the market in terms of operating systems and desktop computers. In most cases, when people think of desktop computers or if they want to purchase one, they usually delve into the specifics of Microsoft. Aside from standard Windows, the company leads with other platforms such as Windows Vista and Windows XP. Since there are multiple factors that can be found on the desktop, this allows customers to have an increase in choices. An additional strength to take into consideration is the fact that there is a high level of efficiency when it comes to the cloud. As a whole, the company has an array of different computing services in which cloud platforms are a part of. Examples include Bing, Microsoft Dynamics and Yammer. Without the variety, it is likely that the company would be very stagnant in terms of the products that are being sold. With cloud computing, there is more of a chance that an increased customer base would be reached.
Although there are many strengths of the company, there are also weaknesses that should be assessed. The first one includes immense technical issues with regard to Windows. Even though there are many people who are loyal customers of Microsoft and truly appreciate the Windows platform, there are still many technological issues that are seen when using the system. For example, on a periodic basis, it seems as if the software undergoes updating and instead of the device updating itself, it seems to inform the user and this often decreases a level of efficiency, especially if there are tasks that need to be completed. As time progresses, there is a desire to fix the issues that surround Windows so that there is more usability. Another weakness that should be noted is the weak position that surrounds the platform known as Internet Explorer. In today’s society, it seems that most people feel comfortable using the Google Chrome browser since there are not many glitches. Microsoft should then take the time to revamp the browser so that there is more ease of use towards the users.
Resources, Capabilities and Core Competencies
Pertaining to Microsoft’s resources, there are cash reserves and financial leverage opportunities that currently exist. It should be known that there are over $60 billion worth of cash reserves that the company has and this allows then to have a great deal of flexibility, especially if they want to pursue further projects. Moreover, with regard to their operating revenue, they have about $86 billion and within the Fortune 500 companies, it ranks as number 34 (Vega, 2015). It should also be known that Microsoft has a plethora pf physical assets, half of which are software and other realms of computer equipment. Other physical assets that should be taken into consideration are buildings on a global level and pieces of land throughout areas in the United States. The resources described are all considered tangible, but there are intangible resources as well. Those include intellectual property and research and development processes.
Aside from delving into the resources, Microsoft is known to have many capabilities as well. They have a great deal of financial control and even though there are many competitive forces, they are very skilled when it comes to decision making. Moreover, they are constantly striving to make continuous improvements so that the users are completely satisfied with the products and services that they are receiving. Finally, Microsoft is known to have a broad level of research capability so that they can keep up with all of the applicable trends.
Finally, the core competencies will be discussed as well. As a whole, Microsoft has the strong ability to adapt, especially when there are new innovations. Even with their major competitors known as Apple and Google, they have the proper brand management to know how their users think and operate. This is why they continue to be one of the most successful companies in the world.
Value Chain
It should be known at an analysis that entails a value chain involves a framework in which a business can create further value moving forward. First, the logistics in terms of the inbound processes will be discussed. It should be known that there are a plethora of suppliers that are contacted on an international basis so that operations can run in a smooth many without any major disruptions. With a great deal of knowledge about supply chain management, Microsoft is able to broaden their horizons even more. Additionally, with regard to logistics on an outbound perspective, Microsoft is currently distributing services and products via three different sectors known as online sales, original equipment manufacturers and resellers (Vega, 2015). Finally, the online sales capability is critically important because there is an allowance to present information to customers and users within a few seconds without any hassle. Without the sales channel through an online capability, Microsoft would have to determine better ways to operate the business.
Six Segments of the General Environment
The six segments of the general environment are as follows: demographics, sociocultural, political/legal, technological, economic and global. Each of the sectors will be assessed accordingly.
Demographics
Microsoft is considered one of the most diverse organizations in the world. With the strong level of diversity, the company would not be able to present a broad range of innovative ideas on a daily basis. Moreover, there are many employee resource groups that can be found within the organization so that there is a level of comradery. For example, the following are employee resource groups that currently exist: Asians at Microsoft, Africans at Microsoft, Indians at Microsoft, Dads at Microsoft, Moms at Microsoft, U.S Military Veterans at Microsoft and many more (Microsoft, 2016). In order to transform the company, there is an understanding that the users come from many different areas of the world as well. The company prides themselves on embracing all of the differences.
Sociocultural
Since technology is constantly expanding, the platforms that Microsoft has created continue to allow users in order to communicate in the best ways possible. There are convenient methodologies with regard to staying in touch with each other just by the click of a button. One of the most prevalent programs that should be mentioned is Skype since a plethora of individuals use it in today’s society in order to converse with others.
Political/Legal
Throughout the years, Microsoft has battled with a few levels of legalities since there were political implications that were tied. For example, in 1998, The U.S Justice Department pressed charges against the company because there was a claim that Microsoft limited browser competition in terms of the new developments. After a while, Microsoft was able to win the case (Kelly, 2015).
Technological
Microsoft is known to be one of the best companies with technological and electronic platforms for users all over the world. There is a dependency on technology or the company would not operate in a proper manner moving forward.
Economic
The concepts of interest rates and purchasing power greatly impact the economic implications of Microsoft. Moreover, if there is a recession that takes place, it is known that customers will not likely purchase many computer products.
Global
For many decades, Microsoft has been selling their services and products to users all over the globe. The revenue keeps increasing since there is a strong allowance for innovation in the future.
Five Forces of Competition
Rivalry among Firms that are in Competition
For any large company such as Microsoft, there will always be rivalry among companies who are in the same industry. With this example, Microsoft should take the time to increase the level of innovation and monitor the way that they are diversifying in many different fields.
Substitute of Products Threat
With the substitutes of products, this aspect will always exist, especially when the company known as Apple is taken into consideration. The last thing that Microsoft wants to happen is to have one of their products substituted for an Apple product. Therefore, Microsoft should continue to allow for new developments to avoid this threat.
Threat of New Entrants
The threat of new entrants is something that most companies deal with. Microsoft should not be worried however because their research team is on top of creativity and innovation.
Bargaining Power of Suppliers
Microsoft currently has hardware suppliers and device suppliers that they are very fond of.
Bargaining Power of Buyers
Most of the buyers within the realm of Microsoft are large companies, individuals and governmental organizations. With an increase in alternatives of products and services, there is a strong allowance for growth.
External Environment
With the emerging economies that are found on a global level, it is likely that Microsoft can expand as long as they continue with the growth of their products and services. Currently, a majority of the revenue is found from international companies that take the time to purchase products from Microsoft. However, even though this is the case Microsoft currently has a decrease cost in terms of production. Since the entire field is considered very dynamic, the company needs to monitor the factors accordingly (Fowler, 2015).
Internal Environment
Currently, the company is known to have over 50,000 employees on a global basis and as stated before, there is a strong level of diversity that is seen. With the headquarters that are located in the state of Washington, Microsoft ensures that the people who are hired undergo a thorough level of evaluation because the company wants to ensure that the best people are hired. In order to operate among other cultures, Microsoft prides themselves on the fact that they can intermingle with different fields and paths of life (Allen, 2015).
Conclusion
Overall, Microsoft is considered one of the most successful companies in the world. Even though there are implications of struggle in terms of competitive forces, the organization continues to develop unique ways in order to completely satisfy the customer base. As time progresses, it is likely that the company will continue to flourish so that more people can enjoy all of the services and products that are offered.
References
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Microsoft. (2016). Inside Microsoft. Retrieved from
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Stucke, M. (2013). Is competition always good? Journal of Antitrust Enforcement, 1(1), 162-197.
Vega, G. (2015). Entrepreneurial finance: Concepts and cases. Business and Economics, 56(4),
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