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Microsoft Corporation: The Rise of a Major Company

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Microsoft Corporation: The Rise of a Major Company

Company Information

Microsoft Corporation is a leading organization in the sales, design, and production of IT solutions and servers. The Corporation has over 155,000 employees globally and operates in the US and other confinement regions. The significant shareholders of the Corporation include the Vanguard Group, Capital Research& Management, SSgA Funds Management Inc., Fidelity Management & Research Company, T. Rowe Price Associates, Geode Capital Management, Putnam LLC, and Bill Gates. The stock is valued at 165.14 USD, and the stock exchange identifier of Microsoft Corporation is NASDAQ: MSFT. Microsoft deals with apparatus, services, and options, which are directed at enabling individuals and businesses to reach their potential. Microsoft is considered to have achieved optimum exercise, standing across several operational and tactical industry practices. Throughout its technical innovations and advertising experience, Microsoft has escalated and mastered the software market. The organization is aligned with a professional plan and an effective business strategy. Due to market dynamics, the Corporation witnessed strategic, organizational, and structural changes in applications, apparatus, and services in an attempt to attain success in the competitive market.

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Microsoft’s Organizational Structure

The Microsoft ownership structure has been transparent and strategic. Microsoft is built on a hierarchical structure that allows managers to concentrate on oversight and team functionality, which translates into recurring earnings. The Board of Directors evaluates the customers’ requirements and adapts their actions to provide the required services. The organizational arrangement of the Corporation focuses on business output (Conte, 2018). Consequently, the method facilitates the business, particularly after the structural shift of this company in 2015. The management of the organization is responsive to the dynamics of the hardware and software market, the long-term achievement of the provider.

PESTEL Analysis: Political and Economic Factors

The Corporation offers unique products and services through the preparation, execution, maintenance, and optimization phases of business engineering, supply information, computing, productivity, hybrid and, cloud IT infrastructure. Microsoft provides practical solutions in planning, implementation service, care support, education, and maintenance. Many political variables exist within Microsoft’s PESTEL analysis at administration, regional, and global levels. The variables include political stability in the current market, the influence of lobby groups, and government policy. Microsoft has drawn the interest of authorities and political parties because of antitrust-related challenges. Several financial variables affect Microsoft’s earnings and profit maximization. These include economic expansion or downturn in the current market, fluctuations in exchange mechanism, fluctuations in earnings policies and rates, inflation rates, fluctuations of labor expenses, and prices of assets, and fiscal policies. Labor cost is a factor with possible influences on the bottom line and operational expenditures of the Corporation. Microsoft employs approximately 154,000 workers on the permanent status and over 80,000 individuals in North America. Thus, increases in the expense of labor affect profit maximization.

Though environmental elements pose a hazard, awareness of the trends provides insight into the future and lessens the problem concerning the future management of this business. Moreover, depending on the ecological feature of the STEEP investigation, various environmental regulations account for the operations of Microsoft. Although environmental factors affect the organization, it has a diminished effect on the sustainability and exchange of Microsoft goods. The business must create environmentally friendly goods while ensuring a rise in the usage of innovative charge devices and equipment. Microsoft has missed chances of introducing new technologies because of political instability in a few niches. However, with political equilibrium, Microsoft can launch new products and services, thus raising its market share and earnings. For example, Microsoft is also launching innovative cloud programs to help data management methods and information center efficiencies within the competitive market.

Human Resource Management

The Corporation’s HR department is involved in choosing, recruiting, hiring, and keeping workers. The department copes with wages and salaries and the welfare of its workers. Jobs are broken up into operational units to boost the productivity of the business. Essentially, breaking the tasks into particular operational units and teams allows the firm to analyze each operational component based on efficiency. For example, in Microsoft, the advertising team performs a specific task that differs from other units. The advertising team is involved in running marketing analysis, the creation of new goods, and growth strategies in the promotion mix of this firm (Love et al., 2017). The accounting team is involved with gathering, recording, assessing, and presenting financial data- great fiscal communication has contributed hugely to the success of their business (Love et al., 2017). The fiscal function is involved in generating funds necessary for managing the company and decides the way the money is going to be invested. The unit organizes the sources of earnings, cash flow, and credit management. The management and operations units conduct the growth of new goods, research and development, product preparation, quality management, distribution, buying, and inventory control. The operational unit serves as a core component in operations.

Porter’s Five Forces Analysis

Competitors in customer markets are getting more ground against Microsoft as Apple surpassed the standing of Microsoft as the most valued innovation, which introduced a psychosomatic impact to the Corporation (Hyrynsalmi et al., 2016). Though the business retains the hold of the marketplace, Microsoft’s rivals are facing fierce substitutes with new technology in networking, cloud solutions, smartphones, gaming architecture, and tablet computers. In the evaluation of Microsoft, porter’s five forces include threats of new investments, the threat of replacements, providers’ bargaining power, customer’s bargaining capacity, and aggressive competition.

Threats of New Investments (moderate force)

Particular external variables using their intensities feature to the threat of new entry against the Corporation. The threats of new entrants include brand growth, the cost of expansion, the cost of producing new brand portfolios, and a digitized economy.

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Threats of Rival Products and Services (weak force)

The weak force of replacements on Microsoft features and products relates to external variables. Based on this assumption, the organization has seen reduced access to substitutes and the performance of substitutes. The firm’s products and services have been integrated with high-end innovation to surpass the efficiency of close substitutes. Consequently, the higher endorsement of improved technology reduces access to replacements, thereby weakening the risks of substitution on Microsoft’s services, software, and other devices.

The Bargaining Power of Suppliers (moderate force)

The supplier bargaining power is an external factor with moderate force on the Corporta5tion. The force includes the supplier’s size and demand volume. The bargaining force influences the organization when product supply falls below the demand threshold. Thus, the size and population of providers influence Microsoft’s business atmosphere.

Customer’s Buying Power (moderate force)

Factors like diversity and spontaneous switching cost influence consumer bargaining power. Under the low rival accessibility, customers find it challenging to compare the products and services of other brands. The inability of these companies to provide adequate products and services makes it difficult to make comparisons. However, the ease of product switching makes it compelling to improve and manage customers. Average shifting costs impose an important impact on Microsoft’s business environment because customers can quickly change in the usage of particular goods to other goods of a different provider. Thus, the ease of switching products and services creates market pressure for Microsoft Corporation.

Business Rivalry (strong force)

The forces of rivalry include business diversity and the competitive status of investments. These variables have an underlying influence on Microsoft’s strategic operations. The intrusive nature of Microsoft rivals such as Apple, Sony, Oracle, IBM, and Salesforce creates a strong force on the organization. Consequently, the diversity of investment portfolio creates aggressive competition among organizations that provides similar products and services.

Marketing Mix Analysis

The marketing mix of the organization reveals how the mixture of invention and effective strategies are utilized to maintain the market share value. Microsoft uses online engineering and technological processes for the security of electronic products. It enjoys a large earning because the firm has a significant competitor in the marketplace for hardware, cloud services, and applications. The 4Ps include price, product, place, and promotions. Microsoft provides different merchandise. Its product mix includes applications, apparatus, games, programs, and amusement. Thus, there is a high-profile diversification of Microsoft’s goods. In its place and supply mix, Microsoft utilizes official websites, online shops, authorized vendors, and retail outlets for transacting with clients. Although Microsoft outlets are restricted in amount, they ease direct advertising, which empowers the enterprise to increase customer experience and improve the brand image (Išoraitė, 2016). Under the proportion mix, the firm targets customers by implementing effective strategies and communication approaches (Mosheshe, 2017). Under the pricing mix, the Corporation utilizes cost plans such as a market-oriented framework to create product and service differentiation. Each approach has its advantages and can be employed based on market dynamics. As found in figure 1, Microsoft’s marketing mix focus on the product element, communication, effectiveness, and efficiency.

Microsoft’s Marketing Mix
Figure 1. Microsoft’s Marketing Mix

Microsoft’s SWOT Analysis

SWOT Analysis describes a firm’s strengths and weaknesses in the overall management. The analysis describes the firm’s internal and external strategic factors based on its products and services. Microsoft’s SWOT evaluation shows the impact of innovation, business diversification, and service solutions. The management conducts a SWOT analysis to organize a long-term response to customers’ requirements and market dynamics.

Strength

  • Effective distribution supply chain
  • Strong financial performance
  • User-friendly applications and software
  • Brand loyalty
  • A vast market reach
  • Market capitalization
  • New Product lines
  • Continuous growth
  • Diversified portfolio
  • Effective leadership

Weakness

  • Poor browser integration (Microsoft edge)
  • Windows technical challenges
  • Trust and security issues with products
  • Reliance on program manufacturers
  • Vulnerability to attacks and cybercrime
  • Product imitation
  • Poor investment acquisition
  • Security flaws
  • Slow innovative strategy

Opportunities

  • Cloud solutions
  • Smart devices and advertising
  • Aggressive brand diversification through acquisitions
  • Innovative market with artificial intelligence
  • Improving security firewalls against attacks

Threats

  • Currency exchange rate
  • Litigations and lawsuit
  • Product and service rivalry
  • The political, economic, and environmental crisis
  • Internal frauds and scandals
  • Software open source technology
  • Volatile market and consumer needs

Supply Chain Management and Accounting Practices

Supply chain management is the effective utilization of the value distribution strategy to control and organize a firm’s products and services. It is the proactive management of logistics to enhance quality, value, and competitive advantage (Sawhney et al., 2017). Microsoft’s logistics and delivery strategy cover many segments, which include cost analysis, vendor information management, business record management, sales processing evaluation, and product monitoring. Microsoft management operations per global best practices in financial accounting. The Corporation complies with the GAAP accounting principles in reporting consolidations, estimates, assumptions, revenues, foreign currencies, and expenditures. These strategies have a positive influence on the firm’s share value. Consequently, factors like management efficiency, political climate, dividend rate, investors, interest rates, and stock demand influences the price of Microsoft’s share.

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References

Conte, F. (2018). Understanding the influence of CEO tenure and CEO reputation on corporate reputation: An exploratory study in Italy. International Journal of Business and Management, 13(3), 54-59. Web.

Hyrynsalmi, S., Suominen, A., & Mäntymäki, M. (2016). The influence of developer multi-homing on competition between software ecosystems. Journal of Systems and Software, 111(1), 119-127. Web.

Išoraitė, M. (2016). Marketing mix theoretical aspects. International Journal of Research, 4(6), 25-37. Web.

Love, E., Lim, J., & Bednar, M. (2017). The face of the firm: The influence of CEOs on corporate reputation. Academy of Management Journal, 60(4), 1462-1481. Web.

Mosheshe, J. (2017). Utilizing object-oriented software-testing tools in Microsoft Corporation. Computer Engineering & Information Technology, 6(4), 1-4. Web.

Sawhney, M., Buenneke, B., Jackson, L., Kulick, L., Kulick, N., Norton, E., Post, E., & Rotem, R. (2017). Microsoft Corp.: Branding and positioning.NET. Kellogg School of Management Cases, 1(1), 1-9. Web.

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