Order# 209392824
Marketing
Abstract
The software industry has many competitors. One of the big competitors in the industry is Microsoft Corporation. Microsoft was founded in 1975 and was the first company to build an operating system for PC’s. When Microsoft was founded its purpose was to put a PC on every desk. The purpose of the company was to get every person computer literate. The company has monopolized the making of operating system for every PC in the world. Also, the company wanted people to use computers in their homes and business and they also built other programs such as Microsoft Office Suite to help users be productive.
These are the three reasons why I prepared a marketing plan for Microsoft Corporation. First, Microsoft is one of the most valuable companies in its industry. Microsoft has been around for the past 39 years and they are seen as the leader in the industry. Secondly, Microsoft has variety of products. The products that Microsoft sells include the windows operating system, the surface tablet, Xbox consoles, Office Suite, Skype, cellphones and many others. This makes the company attract revenue from different segments in the market that makes their financial statement attract investors. The third reason is the corporate organization of the company. Microsoft has many products on the market and this shows that the company is constantly innovating different product. The company recently changed their organizational structure to fit the number of products they offer and how this new organization will help meet the company’s goals.
Though Microsoft stands out as a leader in the industry, there are some key issues that affect the firm. An issue that the firm is facing is focus. Microsoft Corporation has many products and seems like they are deviating from their purpose. The company needs to have a focus on what to produce and the people they will serve instead of having a broad market. Another issue the company faces high competition. Microsoft is facing competition from Apple products and their software. Competiton has made Microsoft rethink their strategies and the company is still looking for an organizational structure that will best fit their business.
Executive Summary
Microsoft is one of the most valuable software companies in the world. Since its establishment in 1975, the company has always differentiated itself from competitors by making authentic products and providing businesses that suit consumer needs. The company has expanded its business from just manufacturing windows operating system to venturing into new markets. The mission statement of Microsoft addresses how the company wants to help people and businesses meet their full potential. The goals of the company include strengthening their business culture, holding management accountable to the owners and the efficient use of resources. The company’s core competencies are the number of its product lines. From operating systems to gaming consoles, Microsoft has not given up in competing in every software market. The company’s sustainable competitive advantage is innovation.
The SWOT analysis shows the company’s strengths, weaknesses, opportunities and threats. The SWOT analysis allows the companies to turn their weakness to strengths and threats into opportunities. The software industry has many practical competitors such as Apple and Google who are both internationally recognized and are direct competitors to Microsoft. Apple and Google both have their operating systems which are on tablets and cellphones. With other competitors in different markets such Samsung, HTC, Sony and many others Microsoft is an industry that competes with big names. The company’s target market is young adults because mainly most of their users use computers, tablets and Xbox, the gaming consoles. The company sells its products online and mostly through retailers. Microsoft's positioning in the market is high quality, innovative and medium to high pricing. The company’s marketing strategy focuses on the price, product, place and promotion. The marketing mix helps Microsoft markets its products to meet its goals.
Microsoft’s financial statement shows an increase in sales every year. The company has a variety of products, and that explains the billions of dollars that the company receives through sales. Due to the company’s yearly increase in sales, financial analysts have projected close $100 billion in revenue. The company has also changed its organizational structure to fit a number of product the company sells. The new organizational structure will help the company create a division for every product; this will allow for proper innovation for every product and cut interference between divisions. The new organization will also allow the managers to report directly to the head of their divisions in management. The new organization will allow an easy flow of information from management to managers.
Microsoft is no doubt one of the most valuable company’s in the world. A company that started by creating an operating system for computers is has expanded its business into the cellphone industry, video game industry, tablets industry and more. Microsoft is accomplishing a lot as a company since its 39 years of operation. Through innovation and differentiation, Microsoft has managed to stay ahead of its competitors for many years. The industry where Microsoft competes is competitive, and the market in the industry continues to grow. The innovation in the industry and consumer demands continue to see the industry grow for many years to come.
Company Description
Microsoft is co-founded by Bill Gates and Paul Allen in 1975. The duos were computer geeks, and they were able to prove their computer knowledge in the time when computers were difficult to acquire or use. The name Microsoft came to existence when Gates wrote a letter to Allen using the word “Micro-soft” to address their partnership. Later, the name was registered with the secretary of State in New Mexico in 1976. Bill Gates was the president, and Allen was the executive vice president when the company was incorporated in 1981. The company made its operating system called Xenix in 1980. The company also made MS-DOS, that was only licensed to IBM. The company also made the Microsoft mouse in 1983, followed by windows in the same year, Microsoft office in 1989, internet explorer in 1995 and Xbox, their gaming console in 2001. The company has since then continued to manufacture many products such as cellphones and tablets. The company is making a lot of progress and is establishing itself in the software industry on every platform from computers, tablets, cellphones and video games (Bellis).
Strategic Focus and Plan
Mission Statement
The mission statement for Microsoft reads “our mission is to enable people and businesses throughout the world to realize their full potential. We consider our mission statement a commitment to our customers. We deliver on that commitment by striving to create technology that is accessible to everyone—of all ages and abilities. Microsoft is one of the industry leaders in accessibility innovation and in building products that are safer and easier to use” (Microsoft.com). The mission statement of Microsoft focuses on innovation of products by striving to create a technology will be accessible to everyone. The mission statement does not address shareholders and employees but focuses on what the company wants to achieve in the coming years.
Goals
The first goal of Microsoft Corporation is to establish and preserve management’s accountability to the owners. The company wants its management team the focus on distributing right and responsibilities among board members, shareholders and managers. The company wants a complete balance and tries to get all affiliates with the company involved in decision making. Secondly, Microsoft wants to strengthen the culture of business integrity and responsible business practices. Company culture is important to Microsoft because it is important to have integrity and responsible business practices to support their products and customers. Finally, the company encourages its employees and managements to use resources efficiently and to be accountable for the stewardship of the resources. Microsoft has many suppliers and makes different products, so it is important for the company to use its resources efficiently to be able to produce better products and services all the time.
Core Competencies and Sustainable Competitive Advantages
Core competences and sustainable competitive advantage are strategies that differentiate a company from its competitors. Microsoft Corporation’s core competencies are the number of its product families. The company has Operating systems, mobile, business solutions, Microsoft networks, Xbox (gaming console), developer tools and servers. Microsoft provides products to its customers under every product family, and the company ensures that they are meeting their consumer’s needs. The sustainable competitive advantage of Microsoft Corporation is innovation. Since the establishment of the company in 1975, Microsoft’s innovation of many products to meet consumer needs from windows operating system on computers to video game console. The innovation of Microsoft Corporation is what gives the company a competitive advantage over its competitors (Time and Again).
Situation Analysis
SWOT Analysis
The SWOT analysis investigates the company’s strengths, weaknesses, opportunities and threats. Microsoft Corporation is a company that is evaluated using these four categories. It is important for Microsoft to analyze its SWOT because it helps the company to identify their weaknesses and turn them to strengths and also turn their threats into opportunities. Some of the strength of Microsoft is brand loyalty, brand reputation, expansion into global markets, acquisitions, easy to use software’s and strong financial performances. The company’s weaknesses are dependence on hardware suppliers, poor investments and slow innovations. The company’s opportunities include entering the mobile device industry, growth through acquisitions and cloud computing services. Microsoft Corporation’s threats are intense competition in the software industry, potential lawsuits, change in consumer needs and preferences and open source projects (Jurevicius, 2013).
Industry Analysis
The software industry is very competitive and aggressive. There are many competitors with different innovations and strategies all vying to be the best in the industry. The industry also provides opportunities to make new products, technologies and business models. The barrier to entry is low, this shows that any company can enter the market but must be ready to compete with giants such as Microsoft. The software industry also allows for serious investment in research and development because competitors always want to have the latest technologies in their products. The market for software industry is growing and with many devices such as smartphones. Tablets, game consoles, computers and other, the software industry looks financially strong for many years to come.
Competitive Analysis
Microsoft Corporation faces many competitors both domestically and globally. In the U.S., there are powerful competitors such as Google Inc. and Apple. Android, Google’s operating system has a market share in the smartphone and tablet markets. Apple also controls a significant market share in the cellphone and tablet industry with their IOS software. Microsoft has the largest market share, and it is almost a monopoly in making operating systems in all computers except Apple computers. The company made a late launch into the cellphone and tablet industry, but they seem to be doing alright. There are also global competitors such Samsung, HTC, Sony and others who compete with Microsoft on different levels in the software industry.
Company Analysis
Microsoft is the largest global producer of software products. Since company’s establishment in 1975, they have constantly been controlling the market and are also venturing into other markets. Microsoft Corporations core products are the windows operating system and Microsoft office suite. The company sells its operating systems to many computer makers such as HP, Dell, Samsung, Sony and many others. The company’s acquisition of Nokia was its gateway into the cellphone industry. Microsoft Xbox is also a big competitor to Sony’s PlayStation in the game console industry. The company has ventured into every industry possible to expand its market; this is what makes Microsoft, the largest software company in the world.
Customer Analysis
The customers of Microsoft Corporation start from people to companies. The products that Microsoft makes are used by people of all ages and in almost every company. Schools, companies, households, healthcare, manufacturing and many other sectors use Microsoft products from its operating systems to cellphones. The customers of Microsoft vary from different products that Microsoft offers. Most of its customers are users of the windows operating systems and Xbox, the gaming console.
Market Product Focus
Marketing Objectives
The marketing objectives for Microsoft focuses on the products and business they offer. The company set numerical goals that allow management and investors to measure Microsoft’s success. Intense competition in the market could sometimes make it difficult to meet some objectives. The company’s marketing objectives includes the selling of their products such as windows operating systems, office suite, Xbox consoles and many others. The marketing objectives targets specific customers and markets. Marketing objectives allows the company to sell their products to different market segmentations.
Target Market
The target market for Microsoft is mainly young adults and adults. The company targets mostly young adults because they are growing in the expanding technological society. Young adults are the main users of Microsoft’s product. For instance, the Xbox, windows tablets, office suit and other products are used by young adults. The target market is different from the users of the product. The target market is people who are attracted to the product and could be potential buyers. Also, many of the company’s advertisements feature young adults and it clear who they are targeting (Tsukayama, 2012).
Point of Difference
There are many competitors that Microsoft faces in the industry. With many products and competitors, the only way a company will thrive is differentiate themselves. Microsoft Corporation is doing well in differentiating itself with its products and services. Since the establishment of the company, there has always been differentiation in their products. Microsoft’s windows operating system differentiates itself from the competition. At one-point windows operating system was almost a monopoly and it still is a monopoly, when it comes to the operating systems in PC’s. Microsoft Office suite is an authentic product there is nothing like it. Every computer user has Microsoft office, especially word, excel and PowerPoint. Microsoft differentiates itself with products that are recognized by the consumers.
Positioning
Microsoft Corporation products are high quality and trusted by many customers. Customers always want to buy from the leaders in every business and Microsoft maintains itself as a leader in its market. Microsoft products are high quality, and their prices range from medium to high. They are also innovative and have been in the market for many years. Microsoft is also positions itself above competitors such as Google, Apple and other brands in some product categories (Hogan, 2011)
Marketing Program
Product Strategy
Microsoft’s has a variety of products, and they have built a market for every product they sell. Microsoft has market segmentation for every product they sell. The company’s sells operating systems, tablets, cloud computing and data storage, office applications and gaming console. These products attract different customers, and the company is also excelling at differentiating its product from its competitors.
Price Strategy
The pricing of Microsoft products come in different ranges. With pricing from $100 to $1000, the company still has target audiences that are attracted to every product. Some of the company’s pricing are expensive and also cheaper than their customers. For instance, the Microsoft Surface tablets are cheaper than other tablets, and they are also expensive depending on the features they provide. The pricing strategy for Microsoft is a good strategy that has been helping the sale of their products.
Promotion Strategy
Microsoft offers different promotional strategies to attract loyal and potential customers. For instance, there was a promotion during the summer for students that if they bought a laptop from the Microsoft website they would get a free Xbox 360 console. The promotion attracted many students who wanted new computers for school. The company also offers seasonal promotional prices on their products every year.
Place Strategy
Microsoft sells its product on the company website and through retailers. The company distributes its product to some of the largest retailers in the country such as BestBuy, Walmart and many others. The company still uses both online and retail strategies to sell their products. This strategy helps the company to meet its marketing and sales objectives every year.
Financial Data and Projections
Historical Sales Revenue
Microsoft’s financial statements on their revenues have been increasing over the years. The company recorded higher sales revenue of $86,833,000,000,000 in 2014. The revenues from sales of products have been increasing (GoogleFinance).
Financial Projections
The financial projections for Microsoft in the coming quarters in terms of revenue will be close to $100 billion in 2015. The projections also shows that the company will continue to see growth in their sales revenue for the next coming years. In the first quarter of 2015, there will be a decrease in revenues but the second quarter will be much higher than the first (Financial Times)
Organization
Organization of the Firm
Microsoft’s corporate organizational structure uses the functional organizational structure. The company’s organization is divided into nine different groups based on its business functions (Yarow, 2011). The functional organizational structure allows for innovation within the company and better communication between top management and managers. This organizational structure also lets the managers of every department report directly to their department head without any confusion.
Implementation Plan
Plan to Implement Strategy
Microsoft’s Strategy is to separate every division under top management so there can direct supervision and direct report to top management in charge of a particular division. Each division is in charge of their innovation and finding specific way to improve their products. The organization allows the company to have quality ideas in every division of business without any interference between divisions. The divisions are also responsible for every product and service that Microsoft produces, and this allows innovation to be fresh throughout the company.
Evaluation and Control
Plan to Evaluate and Control Strategies
The strategy is a good fit for the company especially considering the number of products and business they offer. This is the third organizational structure for the company and with their current innovation and products; the functional organizational structure fits Microsoft. The strategy also helps the company focus on each product by assigning division on the basis of the products they sell. This makes the use of the companies resources efficient and there good research and development per department to produce quality products for their consumers.
References
8 Marketing and Strategy lessons from Microsoft. (n.d.). Marketing91com. Retrieved October 8, 2014, from http://www.marketing91.com/8-marketing-strategy-lessons-from-microsoft/
Bellis, M. (n.d.). Microsoft - History of a Computing Giant. About.com Inventors. Retrieved October 4, 2014, from http://inventors.about.com/od/CorporateProfiles/p/Microsoft-History.htm
Equities. (n.d.). Microsoft Corp, MSFT:NSQ forecasts. Retrieved October 9, 2014, from http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=MSFT:NSQ
Hogan, S. (n.d.). Positioning a Brand in the Marketplace. Lippincott: Brand Strategy and Design. Retrieved October 7, 2014, from http://www.lippincott.com/en/insights/positioning-a-brand-in-the-marketplace
Jurevicius, O. (2013, February 16). SWOT analysis of Microsoft. Microsoft SWOT analysis 2013. Retrieved October 6, 2014, from http://www.strategicmanagementinsight.com/swot-analyses/microsoft-swot-analysis.html
Microsoft Accessibility. (n.d.). Mission, Strategy, and Progress. Retrieved October 5, 2014, from http://www.microsoft.com/enable/microsoft/mission.aspx
Microsoft Corporation 2012 Annual Report. (n.d.). Discussion & Analysis. Retrieved October 7, 2014, from http://www.microsoft.com/investor/reports/ar12/financial-review/discussion-analysis/index.html
Microsoft Corporation: NASDAQ:MSFT quotes & news - Google Finance. (n.d.). Microsoft Corporation: NASDAQ:MSFT quotes & news - Google Finance. Retrieved October 9, 2014, from https://www.google.com/finance?q=NASDAQ:MSFT&fstype=ii
Microsoft Investor Relations - Microsoft Corporation Goals. (n.d.). Microsoft Investor Relations - Microsoft Corporation Goals. Retrieved October 7, 2014, from http://www.microsoft.com/investor/CorporateGovernance/Goals/default.aspx
Microsoft's Core Competency. (2007, October 4). Time and Again. Retrieved October 7, 2014, from http://havetoremember.wordpress.com/2007/10/04/microsofts-core-competency/
Org Chart Microsoft. (n.d.). TheOfficialBoard. Retrieved October 9, 2014, from http://www.theofficialboard.com/org-chart/microsoft
Tsukayama, H. (n.d.). Microsoft's ads target young users, haters. Washington Post. Retrieved October 8, 2014, from http://www.washingtonpost.com/business/technology/microsofts-ads-target-young-users-haters/2012/04/30/gIQAAbJMsT_story.html
Yarow, J. (2013, July 11). MICROSOFT ANNOUNCES ITS REORG. Business Insider. Retrieved October 9, 2014, from http://www.businessinsider.com/microsoft-announces-its-reorg-2013-7
