A1.

What is Strategy A set of managerial decisions and actions that determines the long-run performan ce of an organization It is the pattern of decisions in a company which determines shapes, & reveals i ts objectives, purposes & goals, which produces the principal policies & plans for achieving these goals, which defines the business that the company intends to be in, & the sort of economic & human organization it intends to be in pursuit of this, & the nature of the economic & non-economic contribution it intends to make to i ts share-holders, employees, customers & communities( Andrews) FOR MICROSOFT: Business division related software like office sites, unifies communication busi ness solutions Differentiation strategy innovation adopt easy to use Entertainment & Devices Division

A2. Core competenceA core competence is the result of a specific unique set of skills or production techniques that deliver value to the customer. Normally, core competencies of a n org. are difficult to imitate.

A3. STEPS IN STRATEGIC MANAGEMENT 1. Identifying the Organizations Current Mission, Objectives, and Strategies 2. Analyzing both the specific and general environments to determine what t rends and changes are occurring 3. Identifying SWOT parameters 4. Analyzing the Organizations Resources and Capabilities, Core competencies 5. Formulating Strategies at corporate, business, and functional levels of the organization 6. Implementing Strategies 7. Evaluating Results Microsofts mission is to enable people and businesses throughout the world to rea lize their full potential. Initially Microsoft was a traditional software busine ss that sold packaged software. Its strategy and vision was very clear, to place a PC on every desk and in every home running Microsoft software. The Microsoft Networks (MSN) strategy of delivering software services over the in ternet will be instrumental in helping Microsoft achieve its latest vision Diversity and inclusion Having the best and brightest employees with varied perspectives, skills, and ex periences Collaboration of cultures, ideas, and different perspectives is an organizationa l asset and brings forth greater creativity and innovation. Partnering with our outreach partners which include academic institutions, profe

ssional organizations, and national advocacy groups REPRESENTATION, INCLUSION & INNOVATION FOCUS on different ethnic groups, persons with disabilities socially responsible image enhancement PESTEL analysis

PORTERS 5 FORCES MODEL Threat of new entrants - Low The way and scale now Microsoft operates makes a big entry barrier for new entra nts. On the other hand Microsoft over the years created a very successful cohere nt network, integrating people, partnerships, businesses, etc making everyone di rectly or indirectly dependent to Microsoft technologies. For existing customers , this makes hard to switch. Threat of substitutes Moderate Microsoft offers a broader range. Product wise there can be many substitutes. Wh en it comes to their core products (operating systems, office software package, SharePoint, Internet explorer etc) there are substitutes. But they are not popul ar due to cross platform limitations. Microsoft having advantage of their operat ing systems, they successfully avoid customer to move towards competitor product s by strictly limiting support for competitors. Being second to market, Microsof t has successfully standardized the industry to rely the industry on Microsoft p latforms. This makes no close substitutes. Bargaining power of customers Low Microsoft is so innovative and so unpredictable with their capability to introdu ce new values and features to their customers at low prices. On the other hand c ustomers find no close substitutes as a result. Bargaining power of suppliers Low Microsoft has a well establish diverse customer base which none have. They have enough suppliers and many establish partnerships around the world. As a result M icrosoft has a great bargaining power than their suppliers. Competitive rivalry Moderate/low Obviously there is competition for Microsoft products. But for the simple reason s the scale Microsoft operates, and the dependability they maintain, they create a successful lock in while keeping the rivalry at a moderate level. Strengths 1. Microsoft has the best and acceptable software of the world. 2. Windows series are globally accepted and recognized. 3. Huge quantity of capital and existing resources dwarfs its competitors. 4. Microsoft has strong brand name and recognition, and has rapid product d evelopment. 5. Microsoft office productivity set (Word, PowerPoint, Excel, Outlook, etc .) is broadly used throughout the world. 6. Microsoft is a highly innovative company which offers new products frequ ently. 7. Diversified and flexible workforce for different projects and flexible c ulture allover the globe. Weaknesses

1. Microsoft could not identify the expansion opportunities of the internet . 2. The company has expensive software for a small business, emerging market , and non-profit organizations. 3. The company is relying on hardware manufacturers to pre-install Microsof ts personal computer operating system. 4. Microsoft has a little presence in the wireless market. Opportunities 1. Positive customers awareness in the direction of new technology around th e globe 2. Microsoft is growing into the video game market by offering products suc h as the Xbox. 3. Mobile phone & Tablet markets are growing in developing countries which provide the opportunity of introducing new mobile software. 4. Provide open source s/w solutions to SMEs Threats 1. Microsoft has abundant court fights with other companies concerning soft ware developer lawsuits and antitrust. 2. The company is facing strong competition from the main rivals such as Go ogle, Oracle, IBM, etc. 3. The bargaining power of buyers is high for the reason that many alternat ive products are available to them. 4. Life cycle of Technology is become shorter day by day. A4. What is innovation : often use the words "creativity" and "innovation" interchangeably but we should not. Creativity is about coming up with ideas while innovation is about "bringin g ideas to life." While individuals may display creativity, innovation occurs in the organizational context only, by bringing creative ideas to life. Innovation is linked to performance and growth through improvements in efficienc y, productivity, quality, competitive positioning and market share. It typically adds value by changing old organizational forms and practices. Organizations th at do not innovate effectively may be destroyed by those who do. Innovation Distinguishes between a leader and a follower. Principles of innovation : Think Small Disruptive innovation are crappy Innovation is Combination(Steve jobs) Passion and Perseverance Are Key Sustaining technologies : Sustaining technologies are technologies that improve product performance. These are technologies that most large companies are familiar with; technologies that involve improving a product that has an established role in the market. Most large companies are adept at turning sustaining technology challenges into achievements. Disruptive technologies : Disruptive technologies are "innovations that result in worse product performanc e, at least in the near term." They are generally "cheaper, simpler, smaller, and, frequently, more convenient to use." Disruptive technologies occur less frequently, but when they do, they c an cause the failure of highly successful companies who are only prepared for su

staining technologies. Barriers for the disruptive technology: Baggage from precedents (such as equipment, training, procedures) hinders a quic k response to disruptive technologies. customers often ask for better versions of current products rather than complete ly new technologies Customers are a substantial barrier to innovation Companies make decisions according to where they are in the market. Example of MS : launch "Keywords" as an MSN Search feature in 2000 But closed it because of fear that it would cannibalize all the revenue banner a d revenue Where truly disruptive innovation isn t just ignored, it s actively blocked at b ig legacy companies who fear it cannibalizing an existing business, rather than recognizing the opportunity. A5. Many reasons cause this scenario; 1. Inertia from the successful traditional product. Have to admit that, despite of all the criticism, MS was really truly doing well in its Windows system and O ffice suite globally. It is the successful tradition allows MS to sit in the cha ir comfortably without any anxiety or impulse to pursue its next flagship produc t. 2. Lack of the customer-driving thinking. MSs success was based on the launch of its early product, Windows and Office suite and the improved versions after. The product and thus, the market were created by some geeks with their brilliant th oughts instead of a deep study of the market. On the contrary, Steve Jobs, the m ost often compared rival with Gates from MS, was actually fell down in the compe tition and become a deep customer-driving thinker once he took over Apple again. 3. From the case, and some more beyond-case research show that MS is becoming a more and more bureaucratic organization which restricts the creativity from with in. Some information even indicates that some innovation could not reach to disc ussion due to some selfish supervision. 4. Too big to be efficiently creative. Unlike the bureaucratic organization, thi s feature lays in the nature of big company like MS. This reminds me a word from Jobs that: Stay foolish, stay hungry. In this case MS were willing to invest th ose more guaranteed projects rather than some innovation and this trend becoming more and more obvious with the company scale growing up. One word to summarize the underlying problems that MS has both inside and outsid e, that it is an honorable giant with its big body trying to move fast in the cu rrent super-fast paced internet business world. A6.