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Strategic Plan for Microsoft

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Scarlett Cheng

on 2 June 2014

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Transcript of Strategic Plan for Microsoft

II.I External Environment
II.II Competitor Analysis
III.I Target Market Segment
VI. Recommended Strategy
V.I Strategic Alternatives
IV.I Critical Business Issues
Apple Inc.

Financial performance, customer loyalty, creative ad campaigns
Above-average prices, rate of growth will slow as market matures

Google, Inc.
Synonymous with Internet search category, diversified product portfolio: Nexus 7 tablet, Nexus 5 smartphone, and Android
May face market share losses with new entrants

Samsung Group
Diversified, Robust market position of smartphones with lower prices
Patent infringement litigations with Apple
Behavioral Markets:
High-end users are over-served by competitors
Low-end users are under-served by the industry

Geographical Markets:
Reaching a saturation point in developed countries
Market is growing fast with low penetration in developing countries

Alternative 1:Flanker Strategy
Pros: less expensive, new market segment, increase market share
Cons: limited potential in the target segment, prevent from future growth, the target consumers may not even consume.
3-year revenue forecast:

Group: Micro to Macro

Casandra Bungert
Laura Knudson
Mentha Wan
Sarah Brooks
Scarlett Cheng

Strategic Plan

Leverage a frontal attack strategy by bundling products

Bundle mobile devices & cloud based services
Leverage high growth potential of Azure
Target business purchasers to increase employee productivity
- Large corporations & small businesses
I.I Overview of Microsoft
III.II Target Market
Customer Needs and Application:
High reliance on mobile device products
Intuitive user interfaces
High computing power
Engagement with device applications
- 80% of time spent
Issue: Market Entry Status

Low market share (3.6%) compared to competitors (94%)
High switching costs for consumers
Small library of device applications
- Microsoft: 240,00 app options
- Apple & Google: millions+ app options
Acquisition of Nokia's mobile business

V.II Strategic Alternatives
Alternative 2: Remove barriers to conversion
Pros: seamless transition between devices, gaining loyal consumers for the whole package of products and services.
Cons: risk of losing current customers, costly.
3-year revenue forecast:
V.III Strategic Alternatives
Alternative 3: Further promoting Microsoft Cloud and Azure
Pros: easily accessible and secure, huge potential needs in market.
Cons: difficult to differentiate from competitors (Apple, Google).
Have lasting positive effect both in short term long term.
3-year revenue forecast (of each alternatives)
Issue: Consumer Privacy

Recent SSL security attacks
Potential legislation implications
Impact on consumer trust

Issue: Brand Perception

Past PC leader position damaging current mobile position
Negative usability with past products
Lack of authenticity

VI. Strategy Risk Assessment
Strategy Risks are
Low research & development costs
Growth forecasts
Ensuring synergies between internal groups
- Project leadership is crucial
Senior management support
I.II SWOT Analysis
I.III Financial Summary
Financial is greater than industry benchmarks:
- Market Cap
- Revenue
Market share losses to Apple and Google
Acquisition of Nokia is predicted to increase revenue by 9% in 2014

II.III Competitor Strategies & Market Share
1) Apple
High market share due to product differentiation strategy

2) Google
Diversified product offering beyond traditional "search" category

3) Samsung
High investment in R&D
to cater to changing needs
Microsoft is the worldwide leader in technology, software, services, and solutions designed to help people and businesses realize their full potential.

Established PC leader with wide range of products
- Operating Systems, Devices and Studio, Application and Services, and Cloud and Enterprise Group
Evolving to place greater emphasis on
"Mobile First. Cloud First"

New product introductions:
- Tablets (Surface)
- Gaming Systems (XBox)
- Smartphones (Nokia)

1. Laggard Market
Entry Status
2. Industry Wide
Security Concerns
3. Low Consumer
Brand Affinity
IV.II Product Valuation Process
Product Strategy
- Positioned for high productivity seekers
- Hardware: Nokia acquisition
- Software: limited app store library

Distribution Strategy
- Partnerships for direct customer sales
- New free-standing store concepts

III.III Target Market
Pricing Strategy
- Reference strategy
- Professional vs. student products

Promotion Strategy
- Marketing responsibilities newly assigned to Chris Cassossela
- New agency responsibilities
- Additional $1B in advertising budgets
Most accessed mobile activities in three typical segments:

U.S : mapping,
social networking
, accessing local information and
reading news
Europe: text messaging, taking photos,
social networking
reading news
China: instant messaging, search, web music, web literature,
social networking
, gaming and video
Short term: revenue increases and market position boosted ;
Long term: capture loyal customers
Short term: gaining a new base of customer, create greater brand loyalty.
Long term: benefiting for the company but costly.
Thank you!
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