Diploma in Engineering Technology

Center for Industrial Technology and Enterprise

Purok II, San Jose, Cebu City

A Case Analysis of
Microsoft Corporation.

Submitted by:

Andrino, Lupe John

Cañones, Jomarie
Dayday, Adonis
Laug-laug, Alfe P.
Miñoza, Niño Rey Christopher A.
Tampus, Raven Paul B.

Submitted to:

Dr. Bonifacio N. Mercado, Jr.

Case Facts

“A Computer on every desk, and in every home”

Apart from being the maker of Windows Operating System, Microsoft is also well known
as a cloud player. However, the technology industry has seen higher competition during
the recent years. Apart from Apple and Google, several other technology and especially
cloud players are competing with Microsoft’s products and services. In order to find
faster growth the brand is investing in innovation and expansion of its product portfolio.
Its revenue grew from 85.3 Billion dollars to 90 Billion dollars from 2016 to 2017.
Increased revenue from the cloud business is the reason behind this growth. Apart from
product innovation, the brand is also investing in acquisitions and partnerships to find
faster growth. Acquisition of Linked In enabled the brand to connect its cloud business
with the leading professional network of the world. Microsoft Azure has also seen fast
growth during the recent years with the rate of usage having doubled in less than a
year. Microsoft also broadened its product offerings to reach new customers.
It introduced hundreds of new Azure services, including new cognitive services APIs for
vision, speech, text, translation, emotion and more. Another major point of focus for
Microsoft is AI. Today, Microsoft’s technologies are being used across the industry by
various players to improve efficiency. With growing digitization and focus on new
technologies like AI having the potential to increase productivity multifold, the
technology industry is undergoing a major transformation. Apart from things like Data
and AI, it is the gaming industry which is also experiencing massive growth. Microsoft’s
Xbox has maintained an impressive presence in this industry whose worth has grown
past hundred billion dollars. Founded in 1975, the brand operates across more than 190
countries worldwide. It develops, licenses, and supports a wide range of software
products, services, and devices which create new opportunities and greater
convenience for people, professionals and businesses all around the world. Apart from
higher business efficiency and productivity, the platforms and tools provided by
Microsoft have brought higher convenience and competitiveness for big and small
businesses. Apart from global presence, a major strength of Microsoft is its large
product/services portfolio.

Statement of the problem

1. Microsoft has been making too many blunders while acquiring new companies. More
often than not, Microsoft has been bad at making the acquired companies profitable.
2. Microsoft is far behind in mobile based market competition.

Objectives of Case Study

1. In current adverse business environment, where is the Microsoft Corp. in terms of

market share;
2. Where do Microsoft Corporation want to achieve
3. And how do Microsoft Corporation get there
Analysis of Microsoft Corporation Strategic Management Strategies

Corporate and Business Unit Level Strategies

Microsoft has divisional organization. In other terms, each division or group focuses on
a specific good or service. Customer service staff, research and development, and
sales are all part of each individual group. This allows for better customer support but at
a higher expense. The 5 groups are Windows and Live Windows Group, Server
Software, Online Services, Microsoft Business, Entertainment and Devices.

Another large section of the corporate strategy is investments and global expansion
throughout the world. This is because in other parts of the world like China and India,
population size in enormous. This allows for a huge market that has maybe not been
effected by all of what Microsoft has to offer.

Business Level Strategy

Microsoft’s business level strategy involves driving and expanding innovation to achieve
market excellence. The strategy to accomplish this is to incorporate the talents of
Microsoft’s diverse workforce into their products. By working with highly-trained women,
minority, veteran owned businesses and businesses owned by people of disabilities, as
well as the small business looking to competitively purchase the products from
Microsoft. In 2009, Microsoft spent more than $ 1 Billion working with over 1,200
suppliers that are women, minority and veteran owned. This spending has increased
more than 250% in the past few years. This is a huge step for Microsoft and for the
employees and consumers supporting it.

Enterprise Software Alliance, Strategic Alliance

In the enterprise software arena, Microsoft maintains significant alliances with Dell, HP,
and IBM. Each provides co-specialization benefits both Microsoft and Partner.

HP: The HP and Microsoft global strategic alliance is one of the longest standing
alliances of its kind in industry, with more than 25 years of combined marketplace
leadership focused on helping customers and channel partners around the world
improve productivity through the use of innovative technologies.

IBM: The alliance with IBM allows Microsoft enterprise applications to run on IBM
servers.

DELL: Additionally, Microsoft maintains an alliance with Dell which is designed to help
business reduce the complexity and cost of deploying a server based environment.

Recommendations

“Cloud-Mobile First” Based Strategy

Microsoft is far behind in mobile based market competition. We recommend it to invest

and innovate more in the mobile market segment purely because of the growth potential
this segment has and also since it seems to be the future of personal computing.

Invest to Internal Product Innovation and Invention

Microsoft has been the industry leader because of the constant research and innovation
and the wide range of products and services it provides. Instead of focusing on
acquiring new companies it should invest more internally to come up with new products.

Reduce Poor Investments

Microsoft has been making too many blunders while acquiring new companies. It should
improve its investment research and try to cut down on the rate of poor acquisitions.
More often than not, Microsoft has been bad at making the acquired companies
profitable. It should be more investigative before acquiring any company in the future.

Strengthen Strategic Alliance

One of the few ways to sustain the market dominance and leadership is to make many
strategic business alliances in the industry. This has been Microsoft’s strength since its
existence and it should try to keep the existing partners while trying to find new partners
for competing in industry.

Cut down unprofitable Products

For example Bing search engine. Despite having 18.1% of market share, it has been a
bleeding investment for Microsoft for many years. It should decide the strategy for such
products

Microsoft Research Division

Microsoft has been spending huge amounts of money on general computer science
research, which might be good for the future but doesn’t lead to any significant returns
in the short term. It’s necessary to be more efficient while investing in research like its
competitors such as Google and Apple.