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STRATEGIC MANAGEMENT
VIPUL GARG
235/2015
PGDM- FINANCE
ABOUT MICROSOFT
Microsoft was founded by Paul Allen and Bill Gates on April 4, 1975.
As on June 30, 2016 No. of independent directors: 9
No. of employees : 114,074
Net Revenue: $85.32B (-9% YoY)
Net Income: $16.79B (+38% YoY)
Vision
Missio
n
External Environment
Political
Economic
1.Political
stability in
the majority
of markets
(opportunity)
2.Increasing
governmental
support for
automation
(opportunity)
3.Increasing
international
trade
agreements
(opportunity
& threat)
1.Considerable
economic
stability of
the majority
of developed
countries
(opportunity)
2.High growth
of developing
countries
(opportunity)
3.Growing
middle class
disposable
income
(opportunity)
Social
1.Stable
attitudes
about leisure
(opportunity)
2.Increasing
cultural
diversity
(opportunity
& threat)
3.Stable
demand for
high quality
customer
service
(opportunity)
Technological
Ecological
1.Rapid
adoption of
mobile
technology
(opportunity
& threat)
2.Increasing
volume of
online
transactions
(opportunity
& threat)
3.Increasing
automation in
businesses
(opportunity)
1.Increasing
preference for
green
products
(opportunity)
2.Increasing
focus on
business
sustainability
(opportunity)
3.Increasing
availability of
recyclable
materials
(opportunity)
Legal
1.Increasing
electronic
waste
disposal
regulations
(opportunity
& threat)
2.Improving
patent laws
(opportunity)
3.Energy
consumption
regulations
(opportunity)
INDUSTRY ENVIRONMENT
Moderate switching costs (moderate force)
Competit
High aggressiveness of firms (strong force)
ion
(Strong High diversity of firms (strong force)
Force)
Bargaini
ng Power
of
Custome
rs
(Moderat
e)
Bargaini
ng Power
of
Suppliers
(Moderat
e)
Threat of
New
Moderate cost of doing business (moderate force)
Entry
(Moderat Moderate switching costs (moderate force)
e)
INTERNAL ENVIRONMENT
Strenghts
Dominant brand image (ability to attract customers, especially those who view brand strength in
relation to reliability)
Product alignment with positive externalities (as more third-party software developers create
programs for IBM PC-compatible operating systems, the companys Windows operating system
becomes even more popular.)
Strong alliances with other firms
Weaknesses
Vulnerability to cybercrime
Imitability of some products
Lack of dominant computer hardware products
INTERNAL ENVIRONMENT
Resources
Brand Name
Innovation (Increased focus on cloud services)
Capabilities
Distribution- Customers can access, purchase or download software products through
Microsofts official website and online store. At present, this online place is a major avenue
for the companys revenues.
Organization Structure- The main implication of Microsoft Corporations organizational
structure is the ability to focus on product development. For example, the company uses
its Intelligent Cloud division to offer cutting-edge cloud computing services.
Development- Microsoft continually develops new software products to generate higher
revenues.
Core Competencies
Valuable and rare Capabilities- Microsoft has a strong brand name in the industry and a
widely used Windows OS. The code of windows is accessible only by Microsoft which makes
it rare.
STRATEGIC LEADERSHIP
ORGANIZATION STRUCTURE
The following characteristics are significant in Microsofts organizational structure:
Product type divisions (most dominant structural feature)
Global corporate groups
Geographic segments
Product type divisions - The company uses product or output as the main criterion for grouping
personnel and related resources.
Productivity and Business Processes (Skype, Outlook.com, and OneDrive, Dynamic ERP)
Intelligent Cloud (SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as
well as Azure. )
More Personal Computing (Windows OEM licensing , Surface, Xbox hardware)
Corporate and Other
ORGANIZATION STRUCTURE
Global Corporate Groups.
Office of the CEO
Worldwide Commercial Business
Marketing
Microsoft Global Sales, Marketing and Operations
Corporate Strategy and Operations
Microsoft Cloud and Enterprise Group
Human Resources
Finance
Business Development
Applications and Services Group
Windows and Devices Group
Technology and Research
Legal
Geographic Segments. These segments are used to group operations in the companys financial reports
United States
International