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Microsoft: Strategic Analysis

Business Strategy Group Analysis Presentation

Kaitlyn Herder

on 22 April 2015

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Transcript of Microsoft: Strategic Analysis

Firm History
5 Forces
SWOT Analysis
Performance Analysis
Kaitlyn Herder
Lauren Chesner
Michael Brooks
Erica Jones
General Environment
Business Strategy TTH 11am
Diversified Portfolio
Powerful Brand Name
High Innovation and Product Development
Strong Distribution Channels

Software Security Flaws
Mature PC Market
Slow to Innovate
Dependence on Hardware Manufacturers

Mobile Device Industry
Acquire Acquisitions

Mobile devices are being used as computers.
Life cycle of technology is becoming shorter.
Open Source Systems

Value Chain
Competitor Analysis
Outbound Logistics
Inbound Logistics
Marketing & Sales
Technology Development
Human Resources
Operating system is delivered to computer companies & placed in their computers and other devices.
Internet downloads of software.
Access of services from internet.
Microsoft hardware & devices are sold online, in microsoft stores & retail stores.
Help program setup on software programs as well as operating systems.
Online chat support.
Detailed solution posts to common problems.
In house research and development.
Invest in heavily in research and development.
Looking for ways to replace third party cookies.
Hire innovative employees.
Sooner to release innovative products.
Continue expanding into the mobile device industry.
Today people are using more social media networks than ever and they are dependent on the internet. Also, they have more disposable income that they are willing to spend on computers and gaming systems.
Globalization and changes in the demand of IT products are opening broad opportunities to branch into new markets. Africa currently makes up only 7% of internet users. Asia has the largest amount of Internet users with 44.8% of 2,405,518,376. However, Internet users only represent 27.5% of the total Asian population.
Legal issues such as affirmative action cases, patent infringements anti-trust laws, health regulations, and safety regulations can all play a large role on a company like Microsoft. The patent law becomes especially important when companies buy up patent rights like large tech companies have been lately. Microsoft recently acquired 40,000 patents and patent applications from Nokia.
A couple factors that impact companies like Microsoft or Apple include personal income and interest rates. Both of these factors can influence the purchasing power of consumers and firms alike. Companies using computer software try to choose less costly software to replace Microsoft.
Since early 1990’s, Microsoft has become the global leader of software services and Internet technologies for the computing industry. Sales for the global software will reach $3,400 billion by 2014.
Microsoft strongly depends on its cutting edge technologies. The gaming and computing market requires the most advanced technology to meet consumer wants and needs. Preferences and competition with other rising companies, such as Google and Apple, is intense.
Apple and Oracle
Sony and Nintendo
Microsoft's Xbox line of consoles and games has two primary competitors in the Entertainment & Devices sector. They are the Nintendo Wii and the Sony PlayStation line.
Google is Microsoft's primary competitor in Internet Services outperforming Microsoft by a wide margin.
When it comes to operating systems, Oracle is a far greater threat to Microsoft than Apple.
When it comes to operating systems, Oracle is a far greater threat to Microsoft than Apple.
Finantial Ratios
Return on Equity (ROE)
Return on Assets (ROA)
Balance Sheet
Earnings per Share
-Microsoft Investor Relations
- Microsoft is founded by Paul Allen and Bill Gates
- Microsoft was chosen by IBM to create operating system for its first PC
- Microsoft introduces Word and plans to create Windows
- FTC begins an investigation into Microsoft
Justice department and European Commission begin investigation
- Microsoft makes deal to buy Intuit, maker of the personal finance software quicken
- Justice Department blocks Microsoft purchase of Intuit
- Microsoft launches Windows 95
- Microsoft releases Internet Explorer 2.0 for Windows 95
- Microsoft and Apple Computer unveil broad-ranging deal to share technology and set aside long-standing feud
- Bill gates steps down
- Windows president, Steven Sinofsky, unveiled Surface.
Bargaining Power of Suppliers
Microsoft has become such a power house in the software industry that the people who have supplied to them have low bargaining power.
Bargaining Power of Buyers
Microsoft has weaved its way so deep into the software industry that it’s become standard to have Windows software installed on most new computers.
Threat of New Substitutes
There isn’t an alternative for an operating system.
Threat of New Entrants
Microsoft, Apple, and Linux have such a hold in the industry that it’s virtually impossible for a new company to become popular.
Rivarly of Existing Competitors
Microsoft is the number one software provider in the world, but Apple is beating Microsoft in revenues because of their product diversification. ($77,849,000,000; $170,910,000,0000)
-MorningStar Financials
Product: SCM Dynamic - CRM, supply chain, and financial management solutions for small- to mid-size businesses (SMBs).
"Operations controls product manufacturing, licensing, and packaging, as well as the supply chain that moves products to market. We work closely with technical, sales, and marketing professionals to coordinate product launches, transactions, and vendor relations. You might say we put Microsoft products on the shelf." -Microsoft.com
"The integrated central processing unit/graphics processing unit is purchased from IBM, and the supporting embedded dynamic random access memory chips are purchased from Taiwan Semiconductor Manufacturing Company. Although we have chosen to initially source these components from a single supplier, we are under no obligation to exclusively source the components from these vendors in the future." -Microsoft.com
"We generally have multiple sources for raw materials, supplies, and components, and are often able to acquire component parts and materials on a volume discount basis." -Microsoft.com
"We market and distribute our products and services primarily through the following channels: OEM*; distributors and resellers; and online." -Microsoft.com
*OEM = Original Equipment Manufacturer

Diversified Purchases
"Before payment can be approved, every Microsoft supplier has to be approved by the Microsoft Procurement group, have signed an agreement with Microsoft, and have a purchase order in hand." -Microsoft.com
"Microsoft purchases a wide variety of goods and services and seeks to increase the volume of goods and services purchased from certified Minority, Women, and Disabled Veteran Business Enterprises (MWDVBEs)." -Microsoft.com
"The Core Infrastructure Optimization model defines four capabilities that are necessary to build a more agile IT infrastructure:
- Datacenter Management and Virtualization
- Device Deployment and Management
- Identity and Security Services
- IT Process and Compliance"
Full transcript