Strategic Planning of Microsoft

Course Title: Principles of Marketing

Course Code: Mkt 502
Section: A

Submitted to
Professor Syed Abul Kalam Azad
Department of Marketing, University of Dhaka

Submitted by
Nashid Mahjabeen (ID-414 28 065)
Shaheen Al Rafi (ID-416 32 003)
Mokammel Antik Khan (ID-416 32 021)
Numayer Ahmed Choudhury (ID-416 32 026)
Shaikh Eimtiaz Ahmed (ID-416 32 028)
Executive Summary
The report talks about the strategic actions that a company can take to increase its overall
productivity leading to greater profitability. Here, we have talked about the gigantic
technological powerhouse, Microsoft and tried to analyze their strategic plans that they carry out
during their day to day operation. The report further talks about the mission statement of
Microsoft and how it is in line with the guideline of being a good mission statement. The
underlying marketing strategies that Microsoft undertook to strengthen their position in the
industry. The BCG matrix shows the star products of Microsoft as well the dogs. Lastly the
report also talks about the product expansion grid which in turn shows how Microsoft have
penetrated the market, developed new market and expanded in new geographical locations.
Overview of the Company
Microsoft Corporation is an American multinational technology company headquartered in
Redmond, Washington, that develops, manufactures, licenses, supports and sells computer
software, consumer electronics and personal computers and services. Its best known software
products are the Microsoft Windows line of operating systems, Microsoft Office suite, and
Internet Explorer and Edge web browsers. Its flagship hardware products are the Xbox game
consoles and the Microsoft Surface tablet lineup. It is the world's largest software maker by
revenue, and one of the world's most valuable companies.

Microsoft was founded by Paul Allen and Bill Gates on April 4, 1975, to develop and sell
BASIC interpreters for Altair 8800. It rose to dominate the personal computer operating system
market with MS-DOS in the mid-1980s, followed by Microsoft Windows. The company's 1986
initial public offering, and subsequent rise in its share price, created three billionaires and an
estimated 12,000 millionaires among Microsoft employees. Since the 1990s, it has increasingly
diversified from the operating system market and has made a number of corporate acquisitions.
In May 2011, Microsoft acquired Skype Technologies for $8.5 billion in its largest acquisition to
date, and in June 2016 announced plans to acquire LinkedIn for $26.2 billion.

With the acquisition of Nokia's devices and services division to form Microsoft Mobile Oy, the
company re-entered the smartphone hardware market, after its previous attempt, Microsoft Kin,
which resulted from their acquisition of Danger Inc.
Linking Strategic Planning with that of
Microsoft
Strategic planning is the process of developing and maintain a strategic fit between the
organizations goals and capabilities and its changing marketing opportunities.

Microsofts Mission Statement

At Microsoft, 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 everyoneof 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.

he mission statement of Microsoft is a bit heavy and in plain eyes doesnt go hand in hand with
the basic rule of mission statement for ones linking. But here we have to consider the scope and
size of Microsoft and the level which it has reached over the years. The extravagant mission
statement is widely acceptable because end of the day it is about Microsoft. If we keenly analyze
we can still see that Microsoft has fulfilled all of the criterions of a good mission statement.
Breaking down Microsoft mission statement, we can see it is very much market oriented, where
they have outlined mission is to enable people and businesses throughout the world. Again,
their mission statement is realistic because if we see today we can understand that they have
actually made inroads is making technology for all ages and abilities. Specific in the context that
they only talked about technologies and enabling such for everyone. Microsofts distinctive
competency is that it is leader in such industry. Overall the scope of the mission statement is
humongous, and itself it very much motivating as this statement captures the minds of the users.
Microsoft is trying to build a products and services for all age and abilities shows a lot of
character of this esteem company.

Microsofts Product oriented versus Market Oriented Definitions

Product Definitions Marketing Definition

Microsoft We make software We help business to work
efficiently, and make
sustainable growth.

Just like any other company Microsofts product definition is utterly plain and simple, where
they claim that they make software. But their marketing definition is well defined and gives a
whole the picture of what they do, and the underlying concept of their existence. The company
made its biggest inroads with its first operating system and since it has helped businesses of all
capacities of different to flourish and reach their full potential. With time they have brought in
necessary changes to fit in with the difference in the needs of the customers. They have always
believed in change and over the years the company has got great successes by implementing
those. These changes helped to establish their marketing definitions.

Microsoft Integrative Growth Strategies

Horizontal integration is the process of a company increasing production of goods or services at
the same part of the supply chain. A company may do this via internal expansion, acquisition or
merger. The process can lead to monopoly if a company captures the vast majority of the market
for that good or service.

Microsoft acquiring many small similar software firms is a classic example of horizontal
integration where they have acquired Taleo, a database management software, Skype, LinkedIn
and many more.

Vertical Integration is the combination in one firm of two or more stages of production normally
operated by separate firms.

Microsoft also acquired Zune in direct response to Apples I-pod, is an example of vertical
integration. Here they have gone forward to the customers, and over the years Microsoft tried to
acquire many direct suppliers, where they tried own Nvidia, Intel, and ATI and so on. But all of
these mergers failed before in could hit the headline running.

Setting Microsofts objective and goals

Mission is to enable people and businesses throughout the world

Microsoft first and foremost target is to help businesses throughout the world and in this
connection they have made great progress as they have connected the whole through computers.
Businesses can communicate across boundaries, make deals, transfer information, money and
many more with just a simple click of mouse. To execute this they have made strong computing
system supporting various kinds of tools, software for this to happen. Internet servers and many
others have has had its toll on the same. The low cost Computing system back in 1980s driven
IBM and Apple away from the core of the market and installed the name of Microsoft to every
household.

We deliver on that commitment by striving to create technology that is accessible to

everyoneof all ages and abilities.

Over the years Microsoft have strived to make technology usable to all despite the age and
abilities. They have developed especial software which can tweaked from user end and use it like
the way they preferred. People who are suffering from different types of disabilities are not out
their target, over the years they have developed various tools and software for blind people as
well as for deaf people. Extensive research and development have been put into this to
implement this software.

Microsoft is one of the industry leaders in accessibility innovation and in building

products that are safer and easier to use.

Microsoft was a household name from its inception because of ease of use and also it is safe to a
great extent. The marketing strategy they used was to implement Graphics User Interface
before anyone did and the results speak for itself. They have always believed computer is
everyone not only business. Earlier with DOS system computing was never easy, but with their
built of GUI they have conquered the market all over the world.
BCG Matrix for Microsoft

Stars

The business units or products that have the best market share and generate the most cash are
considered stars. Monopolies and first-to-market products are frequently termed stars. However,
because of their high growth rate, stars also consume large amounts of cash. This generally
results in the same amount of money coming in that is going out. Stars can eventually become
cash cows if they sustain their success until a time when the market growth rate declines.

For Microsoft their Surface Tablet (Handheld Computer), OneDrive (Cloud Computing) and
Skype (Communication Tool) is considered stars. As all of these three are at their peak, the
market share has risen significantly as well as the growth rate is high. So its of best interest for
Microsoft to keep these portfolios under keen observation and make the best use of it.

Cash cows

Cash cows are the leaders in the marketplace and generate more cash than they consume. These
are business units or products that have a high market share, but low growth prospects. Cash
cows provide the cash required to turn question marks into market leaders, to cover the
administrative costs of the company, to fund research and development, to service the corporate
debt, and to pay dividends to shareholders.

In case of Microsoft, their Cash Cows are Microsoft Windows, X-box and Microsoft Office
Suite. All of which are now experiencing are low growth but have relatively high market share.
These are producing more profits because of the yearly subscription, renewal and other activities
of this sort.

Dogs

Also known as pets, dogs are units or products that have both a low market share and a low
growth rate. They frequently break even, neither earning nor consuming a great deal of cash.
Dogs are generally considered cash traps because businesses have money tied up in them, even
though they are bringing back basically nothing in return. These business units are prime
candidates for divestiture.

Microsoft has experience increased dived down in the Cellular Phone sector. Although they
acquired, Nokia once known for its superior performance, but they could not create the buzz
which they have hoped for. The operating system is full of flaws and in fight with Android and
IOS it has lagged behind rather significantly.

Question marks

These parts of a business have high growth prospects but a low market share. They are
consuming a lot of cash but are bringing little in return. In the end, question marks, also known
as problem children, lose money. However, since these business units are growing rapidly, they
do have the potential to turn into stars. Companies are advised to invest in question marks if the
product has potential for growth, or to sell if it does not.

Microsoft have recently acquired LinkedIn, the professional networking site and Bing, their
search engine or the lone fighter against the biggest search engine of google. Both has
tremendous potential and growth rate suggests such but still lagging behind hugely in market
share. With time these figures will change and analysts believe it to be a successful SBU.
Product/Market Expansion Grid

Market Penetration Strategy

The market penetration strategy can be used by a company to find ways to better adapt to the
current market and increase its sales and profits. In the market penetration strategy the company
is increasing its marketing efforts in order to gain a bigger market share for their existing
products on the current markets. One of the best ways to increase products market share is to
attract customers from competitors and to find more potential customers for the existing
products.

Microsoft penetrated the market by making their product more user friendly than their
competitor, Apple, by this they have done in terms of penetration. They have also introduced
some complimentary that only goes with their system. This was another reason Microsoft has
successfully penetrated the market.\
Marketing Development strategy

Companies can find new markets for a current product by focusing on geographical criteria such
as city, region, state, or county. In finding new markets companies can also focus on
demographical criteria such as sex, gender, axe, social class, and others.

Computer gained its wide reputation in the Sillicon Valley of United States. Soon Microsoft
realized the scope of their product worldwide and started moving out to different continents with
their existing product. Soon Microsoft became viral and people from all over the world started
using it.

New Product development strategy

New product development is used when there is a new product which has to be introduced in an
existing market. This may be done because the companys products are not selling anymore or
that the company has identified new segments which it had missed before and wants to introduce
new product to increase product sales. There are majorly three tactics which the company can
use for Product development.

Over the years Microsoft has introduced many add-in to their current suite of products which are
targeted at the same existing group of people who are using their products. These wide array of
products include Microsoft office suite, OneDrive and so on.

Diversification strategy

Diversification strategy is used when a company enters new markets with new products. In such
a scenario, the demands of the new market might be different from the current markets where the
company exists. Thus, the company has to bring new products in new markets and hence the
complication rises. In such a case, there are 3 different tactics which a company has to use to
establish a diversification strategy.

Microsoft with their existing competency of technology has tried to overtake the gaming industry
by introducing their standalone gaming console X-Box. The X-box soon hit the industry with
great force and became an instant hit. Further this allowed Microsoft to renew their brand values
as the leading technological company. This was aimed at new segment with specific age group.