The Brief Overview of the Strategy and Establishment of Microsoft Corporation

Background and History

Microsoft Corporation which is one of the leading Computer hardware and software developer started as a simple idea shared by its two founders Bill Gates and Paul Allen. The two came together in 1972 where they shared an idea of starting a business related to the courses they were pursuing. Bill Gates attended Harvard and Allen was enrolled in Washington University. The partnership thrived and in 1975 Allen got an idea which was inspired features of Altair 8800 microcomputer and he suggested that they should develop an interpreter for that microcomputer (Hall, 2019). They contacted MITS the creator of the microcomputer and Bill Gates provided the interpreter while Allen developed the stimulator. Later MITS accepted their product, and they distributed them bearing the name Altair BASIC. In 1975, April what was to become one of the largest corporations in the globe was founded, and Bill Gates was the CEO. Originally the corporation was referred to as Micro-Soft, and the name was derived from the phrase microcomputer software (Hall, 2019). In 1980 it transitioned into operating system venture, and in the same time frame, it worked with IBM among other large companies.

Currently, in 2018 it recorded a gross income of $110.36 billion, and the number of employees as per December 2018 was around 134,944. Also, it recorded a net income of around $16.57billion from an operating income of about $35.05 billion (Microsoft.com, 2018). Microsoft Corporation has subsidiaries and partners all over the world. Its headquarters are located in the USA in a location known as Redmond in Washington. In fact, it is not possible to list all its international locations because the list is enormous, but it is located in every corner of the globe even in developing countries in Africa, Asia, and South America. Microsoft being a producer and developer of computer software and hardware, consumer electronics, cloud computing, and video games its target customers are computer users, schools, corporations, industries, and other institutions in the global market that use any computer related product. Microsoft market segments are diverse, and they include geographical segments, demographic, behavioral, and psychological based on the area of operation and the culture and behavior of the customers.

Microsoft Business Information System

Over the years Microsoft has managed to establish robust and effective Customer Relationship Management systems. Microsoft CRM systems are well established and managed, and they enable the corporation to be well connected with its customers. Microsoft has also developed Enterprise Resource Planning systems which enable it to plan and monitor its resources all over the world. These systems have proved to be very effective, and they enable the corporation to manage its ventures in an effective way without applying a lot of resources and control systems (Microsoft.com, 2018). Microsoft also has developed Supply Chain Management solutions that are applied by Microsoft all over the world with capabilities ranging from effective order fulfillment strategy to improved flow which enabled Microsoft to increase its customers by 5%. All these systems have proved to be very effective.

Microsoft is current facing giant competitors in its markets such as Amazon and Apple, but it still commands a strong market share globally because it has several competitive advantages over its rivals. Microsoft has very strong brand equity which has been established over 40 years of its existence through efficient products and attractive pricing strategies. Also, its global presence gives it an advantage over its rivals because it has offices all over the world. Also, its innovation and product range is excellent, and these two are boosted by its genius marketing strategies. Also its leadership, financial performance and customer loyalty makes it be on the top of the industry. Microsoft organizational structure is generally cataloged as divisional (Gregory, 2017). It has two groups namely the Engineering groups and Business Functions which are further subdivided into three groups and seven functions respectively. This structure eliminates bureaucracy thus enabling easy utilization of the organization’s information system through simplified structures with high-pitched dynamism.

Microsoft Technology and its Products Application

Microsoft Corporation from the time it was founded up-to-date it has created a lot of products with a wide range of applications in different industries. The way Microsoft approaches its design of products is efficient and sustainable. This is because it is focused on product mix and diversification in software design. With a combination of cloud computing and computer hardware services, its operational productivity enables its managers to make expansive strategic decisions related to its operations. Also, its quality management is based on continuous innovation and perfection through a collection of customer reviews and feedback. These strategies enable the firm to optimize its productivity in its markets. Its location is also strategic, and this allows it to access different resources and markets which boost its operation’s efficiency (Smithson, 2017). This enables it to increase its human resource productivity and also achieve its computer hardware and software easily and efficiently through its key partners and through the internet. Microsoft layout and design is incorporated in a manner that allows efficient movement of resources followed by the integration of advanced technologies that also allow the automation of production processes and movement of information. The process of operation is effective and sustainable; however; it could be more effective if they invested in reducing productivity bottlenecks by automating production capacity apportionment.

Microsoft Corporation has been in existence in the market for over 40 years, and this means that it has manufactured and developed a lot of products and services. In its history, Microsoft Windows OS and Office Suite are so far the most prominent products it has produced because they are the best-selling products. It has also produced, IPO and OS/2 which picked in the 1980s and 90s (Liebowitz, 2018). It also launched online services such as MSN at the same time upgrading OS. In the 2000s it created Windows Vista and 7, and it was able to sell over 140 million copies. Currently, it has developed Windows 8 which was designed for both PCs and tablets. It has also ventured in cloud computing and computer hardware such as Surface and Video games based on virtual reality and amplified reality. Microsoft in the US it ships its products from its Microsoft Store and their shipments are dependent on its carriers’ requisites and provisions. In other regions, customers are obliged to visit their international markets (Microsoft com, 2019). The shipping costs are dependent on the timeframe of the shipment and the standard of shipment.

Weaknesses of Microsoft Business Model

Microsoft Business Model has some weaknesses, and the first weakness is that its PC market is agonizing due to overexposure. Vendors are raising PC prices in the international markets due to inflation and other currency related fluctuations, and this has been estimated to cause about a 2.5% fall in the global shipment of Microsoft PCs. This is a major weakness Microsoft is facing because it cannot be able to control its product prices in the international market and this will result in reduced revenue, and it is a major weakness in its operations in the global markets (Brodkin. 2019). The Microsoft position is currently vulnerable because its rivals how to have significant investment in smartphones are expected to experience a 3% increase in the global shipment. Currently, Microsoft is facing a lack of innovation which has led to a reduction in the sales of its products especially hardware products. In comparison to its main rival Apple, it is lagging behind, and this weakness is making its position vulnerable. It has also failed to get any promising acquisition, and the several it has made have ended up failing, and this is currently the biggest weakness of Microsoft which is affecting its operations due to unprofitable investments which have led to lack of growth and reduction in productivity. The solution to overexposure in the PC market is to invest in hardware products that are experiencing high demand in the market because the fact is that the PC market is on its decline phase. Microsoft should enter in the smartphone sphere by developing products that serve a similar purpose. Nokia cannot compete with Android smartphones, and this means that Microsoft has to come up with totally different devices that will beat its rivals (Martin, 2019). Also, it should review its research and development department to ensure that it has the capability to produces innovative products. Lastly, it should make a very strategic acquisition or alliance which will boost its efficiency and profitability. In the past, Microsoft has faced many problems in the market, and its major solution has been reducing its prices to increase its sales in international markets.

Microsoft Growth Strategy

Microsoft aims to growth through digital transformation. Currently, Microsoft has been accused of lack innovation and according to the Executive Vice President of the Global Enterprise Group and Microsoft management creating new experiences for people and organizations is the best strategy for the company to grow its business. This will be achieved through the introduction of new routes of marketing that empower customers to have domination of what they want to buy and also choose the brands they want to consume and engage with (Dudovskiy, 2019). With investments in gaming and other innovative products, it wants to attract customers with its unique offerings. It also plans to apply robust changes in its sales and marketing strategies through restructuring its operations in the consumer business segment by introducing a new reporting mechanism. Microsoft aims at using these changes to improve its connection with its customers and other relevant partners. The fact is that Microsoft has entered new markets before and a significant number of them were not successful, but the ideas and technology were brilliant. For example, Windows in the car and mobile devices markets were lost. Therefore, the best strategy that Microsoft can use is by upgrading its current products through the application of broad differentiation strategy to develop other products with unique features designed for different market segments (Evans, 2018). Microsoft can re-enter in the smartphone market through the acquisition of a prominent brand such as Tecno mobile. Also through increased investments in overseas markets especially in developing nations will enable it to develop cheaper products that gain a market share resulting in increased sales.