A Microsoft case study was conducted to analyze the company’s successes and challenges. The research aimed to evaluate the various strategies employed by Microsoft and their efficacy. It also sought to identify areas of improvement and potential opportunities that could be leveraged by the business. The findings of the study were used to inform future decisions and help the organization move forward.
Microsoft creates and revolutionizes new apps and services to help their users succeed against their rivals and competitors. This case studies reveals multiple instances when Microsoft faced off against a competitor or opponent that presented a threat but Microsoft was still in a position to gain an edge. Apple released Macintosh. Microsoft immediately responded with Windows 1.0. Microsoft considered it to be a superior operating system. Lotus was the dominant domain initially but Microsoft overtook them with a superior product that was simpler to use and better bundled to win.
Microsoft frequently offers bundles. Microsoft was a dominant player in the market with a 95% share. However, they were hit by an antitrust lawsuit that restricted them from bundling their deals. Microsoft used the antitrust case to force them to adopt a cost leadership strategy, lowering its costs and selling at a lower cost. By offering smaller bundles at lower prices, they beat Linux. Linux was soon outnumbered. Other challenges include Java, WordPerfect, Lotus 1-2-3 and Lotus 1-2-3. However, they maintained their vast market share while sticking to the same ideals of producing superior products at a less expensive price. Microsoft’s ability to produce superior products at a lower price has allowed it to be a reliable partner throughout its history. Google had a competitive advantage because it was the first to market in this industry. Their unique product was a major innovation in the search market. Google’s product was extremely competitive and allowed them to establish a monopoly quickly. Google also used cost per click advertising. This meant that advertisers were only charged when users click on the ads.
Because it was simple, the cost-per-click advertising strategy allowed advertisers instant feedback. They could simply see if people were clicking on their ads. This feedback was invaluable to advertisers and made it more appealing for them to try google’s new approach. This made them more valuable. This gave google an economic advantage and enabled them to shift to a customer-oriented approach. They were able to grow to have 63.5% market share in search engines by November 2008 (exhibit 3)
Google earned over $17 Billion in ads revenue alone in 2015. This was an increase of 12% over the year before and part of a steady growth year. Over 400,000 advertisers have chosen to advertise with them, which is more than yahoo or Microsoft. Microsoft only held 8.3% market share (exhibit 3-November 2008), which was due to what the Microsoft team called a “vicious spiral”. Microsoft was third in the search industry, which would be a good market share but it wasn’t enough to compete with google.
PepsiCo has 21% market share, while Coca Cola has 48%. This helps to understand the situation. Despite the 27% difference, Coca-Cola remains the primary provider of soft drinks to 25 of the most popular fast-food chains. PepsiCo’s soft drink revenue alone for last year was $19 billion more than Cokes. Google held a 3.5% Market Share, almost half the Coca-Cola market share. Microsoft tried to compete in this industry despite the 55.2% difference in market shares between Google and Microsoft.
Pepsi and Coke are just one example of the impact that a small market share has on an industry. Google had a large competitive advantage in market share and market share, compared to Microsoft’s yahoo. Microsoft was well-known for its innovation and amazing prices. Microsoft also continued this trend into search advertising and search related advertising. It was impossible to leave such a lucrative market. Google was initially focusing on the cost per Click advertising, but Microsoft soon realized that it was time to create economic value.
Many unknowns surrounded the search industry and it initially didn’t seem appealing to many companies or consumers. Microsoft was once the dominant company in the software and computer industry. But, as google gained more market share and power Microsoft began to lose its grip. Microsoft, a company that has been at the top of its industry since 1975, has managed to overcome all past competition by focusing on their strengths and creating great products at a fraction of the cost of its competitors. They wouldn’t allow google to change their minds. Microsoft’s strategy was to fight google’s cost per click advertising. However, it couldn’t attack any departments that it wasn’t fully familiar with to avoid the risk of their large domain being lost and other competitors taking over. They created new products at a lower price than competitors, and tried to keep its internet browser market which it controlled dominantly. But soon google launched google chrome. It has been a long battle ever since.
Although they kept competitors away in some areas, their defensive strategy was too effective to keep them from becoming too competitive. Their strategy was defensive. It tried not to let google gain too much market share or expand into other departments. However, it was not successful. They allowed Google to access the internet browser and have allowed them to get a foothold. Microsoft should maintain its current strategy, but add a product differentiation strategy.
Microsoft has always been the leader in offering a better product at an affordable price. Microsoft is well-known for offering bundles that include Microsoft Word, PowerPoint, art and other tools. However, the cloud is something it has yet completely explored. Apple already uses cloud computing to offer customers continuous updates and bug fixes. Customers can stay happy for longer periods of time because it is able to offer them constant updates. Forbes magazine recently published an article about Apple’s ability to ship updates in weeks rather than months. Projects that normally take years can be completed in months thanks to cloud computing.
Cloud computing refers not to local servers, but rather to servers hosted online. This allows them spread out the work and has more people working on it. Everyone understands what is being done and can communicate what they are doing. Microsoft can better manage its resources by using cloud computing. This will allow Microsoft users to access more Microsoft products simultaneously and to be able constantly to improve and update their Microsoft products. Microsoft will have the ability to manage multiple programs from one device with cloud computing.
Apple has already done this with its own IPhones. With cloud computing, you can take a photograph on your phone. It will then be available on your Macbook. Microsoft already sells a wide variety of products, including phones, computers and gaming systems. Microsoft currently holds 82.88% of global desktop market share for Windows and has sold more than 6.23 million Xbox Ones in 2016. (statista.com). This means they have large desktop market share and many people own an Xbox. It would be great if these people could connect, as there are so many Microsoft products. Microsoft uses cloud computing to monitor corporate trends such as Office 365, Azure portfolio services, and Office 365. (Forbes.com). I believe that Microsoft is yet to penetrate this market. Works cited:
Gordon, Kyle. “Topic: Microsoft.” Statista, www.statista.com/topics/823/microsoft/.
Lutz, Ashley. “See Which Major Restaurants Serve Coca-Cola Vs. Pepsi.” Business Insider, Business Insider, 17 Dec. 2013, www.businessinsider.com/restaurants-that-serve-coke-vs-pepsi-2013-12.
Gordon, Kyle. “Topic: Google.” Statista, www.statista.com/topics/1001/google/.”
Coca Cola: Beverage Market Share 2015.” Statista, www.statista.com/statistics/387318/market-share-of-leading-carbonated-beverage-companies-worldwide/.
“Microsoft’s Search.” Harvard Business Publishing, hbsp.harvard.edu/download?url=/courses/541540/items/709461-PDF-ENG/content&metadata=e30=.
Lopez, Maribel. Forbes Magazine, April 19, 2016. 2016, www.forbes.com/sites/maribellopez/2016/04/19/7-reasons-to-give-microsofts-strategy-another-look/#39f072ec7dd0.
Mcgraw Hill online textbook
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