Microsoft Business Strategy Analysis

Executive summary

Microsoft's miraculous Success in business has become a topic to many business experts around the world. What makes Microsoft so successful ? This report reveal, analyze and explore the business strategy of Microsoft which make them the world leader in the industry with no close competitors. In fact the following paper expects to discover the competitive position of Microsoft discovering numerous strategic factors including, Macro environment, industry dynamics, resource and capabilities, culture, entrepreneurship style etc. Paper too will explain how Microsoft have been effectively articulated it business strategies to create a sustainable strategic lock-in to remain sustainable in their competitive position continuously over several decades. The Analysis commences with a brief introduction about various Microsoft's business and how they are internally structured at administration level. Considering the research findings the reveled strategy of Microsoft is illustrated using the Bowman’s clock. A PESTEL analysis is carried out to identify the key macro environmental drivers to change in order to review the strategy against the challenges from them. Industry forces will be analyzed to identify the nature of competition. That is followed by a radar diagram which will review the illustrated projected effects on position of five forces within next three years. The revealed strategy is also explored further against the capabilities of Microsoft to the fit of business strategy to the resources and capabilities they have. To diagnose the strategic capabilities the value chain model is used. VRIO analysis is done to understand the capabilities for achieving and sustaining competitive advantage. Then the ability for Microsoft to sustain on a strategic lock in is described. Microsoft resourcing capabilities are studied in terms of People, Information, Funds, and Technology. After justifying the resourcing capabilities against the strategies, the roots of entrepreneurship are analyzed to understand the method of entrepreneurship using time relationship and innovation frame work. There the fit of business strategy, to its entrepreneurial style is revealed in detail.The research also realizes the importance of culture as a driver to the strategy. Culture vs Microsoft business strategy is researched in terms with the enormous opportunities introduced from globalization – by ways and means of diversity. The research uses cultural web model to disclose the roots of Microsoft culture and explores how each these variables contribute to the success of Microsoft strategy. Finally the report the Microsoft's capacity to meet and control stake holder expectations in terms of power and interest is reveled. There the research finds most influencing stakeholders and disclose how sustainably the business strategy justifies and control stake holder expectations to achieve the defined declared purpose of Microsoft.

Table of Contents

1 Introduction
2 Strategy of Microsoft
3 PESTEL Analysis
4 Nature of Competition
5 Diagnosing Strategic Capabilities
6 Entrepreneurship
7 Diversity and culture
8 Stake holder Analysis
9 Conclusion
10 References



1 Introduction

Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions. Though the company initially claimed its’ business to be in operating systems, later transformed into software development and to other IT related businesses. With their enormous success, and may be to facilitate administration Microsoft has categorized their products in to one of following five divisions.

· Windows & Windows Live Division
· Server and Tools:
· Online Services Division:
· Microsoft Business Division:
· Entertainment and Devices Division

The above structural view reveal Microsoft's administrative divisions. Many people generally perceive Microsoft only as an organization produces operating systems and office software packages. However given the above internal divisions it is very evident that their actual business has spread into computer software, consumer electronics, digital distribution, computer hardware, automotive software, video games, IT consulting, online advertising, and retail stores etc. As a result of this integrity of various software related productions and services, one often would find Microsoft in your day today life, making it the most helpful software provider at your PC, desktop or Laptop.

Established April 4 1975, their recent brand motto "Be what’s next" not just explains Microsoft recent direction to the business but also paves the way for this analysis. The motto explains how innovative the Microsft wanted to be achieve the business mission the leadership defined. In other words the Microsoft leadership always encourage the business to provide very latest or the next level technologies to the market before any body else.

Mission - To help people and businesses throughout the world to realize their full potential.

However before moving to the analysis in detail, it is very important to point out the fact that this research is all about business level strategy of Microsoft and one should not miss-concept that to the co-operate level strategy.


2 Strategy of Microsoft

There are huge arguments and contentions about the business strategy of Microsoft. Some groups challenge their strategy given various facts to prove that the way Microsoft win the competition is not ethical. Some popular arguments define Microsoft strategy in terms of acquisitions and mergers hence declare the business strategy of Microsoft as  embrace extend and extinguish. However Microsft is so far a giant success where their business is hugely exposed to various competitors, including giant multinational business organizations, governments and powerful individuals like computer hackers who always willing to see a dilution of the market share of Microsoft. Under various kind of threats, and challenges Microsoft still lead the industry and occupies a kind of virtual monopoly leaving no room for competitors to come closer.

How could one exactly explore Microsoft's Business Strategy ? For the following explanation the article considers bases of differentiation and the ability to stay low price as axioms for comparison.

Differentiation

Following section of the research explores the competitive position of Microsoft to sustain on bases of differentiation in order to model its business level strategy based on the Bowman's Clock. It uses some findings of Gartner research. Gartner is a well known research publisher whose work covers business level research about leading IT industries in the world. Following comprise some opinions derived from their research. According to Smith (2003) of Gartner research, Microsoft use strategies

1. That attempt to leverage innovation and trustworthiness.

Eg:
Ø Innovation: User friendly interfaces, SOA, Cloud computing …
Ø Trustworthiness: Security-oriented initiatives, Concentration on the lack of accountability of open source competitors …

2. That leverage tight technical integration between its operating systems, middleware and applications

Eg:
Ø Stabilizing .Net as a strong API frame work for, interoperability (integrity)
Ø Not in advance supporting for competitor platforms; Linux, Firefox etc…

These findings effectively prove that Microsoft is well adhered their moto “Be what’s next” towards futuristic technology driven differentiation. However in addition to what found out above  Microsoft differentiation bases were not always technology centered. It is true that they innovate technology, acquire technology, and use technology not only for software production but also to earn competitive advantage. As will reveal later, Microsoft benefitted a lot through others’ innovations and most the time was not the original sole inventor. However they had developed the capability to absorb the technology very quickly and improve it in order to provide numerous innovative perceived benefits to the customers in terms of user friendliness, flexibility, reachability to the products, availability, compatibility with all other common hardware and software, customer services like bug fixing and version updates, branding and promoting, attractiveness of designs and user interfaces, etc. As a result Compared to competitors they also earn the capability to market and brand their products successfully. Therefore Microsoft bases of differentiation cannot be limited to technology wise innovations and differentiations. It also differentiates itself through its availability. It was very good at marketing its product to the masses. Its logistics, distribution, operations, sales and marketing are all strong. Obviously Its R&D might be strong, but it will only give competitive parity.

Microsoft's capability to competitively differentiate it business in terms of various aspects is disclosed above. However in order to explore sustainability, these capabilities of Microsoft will be reviewed in detail along with the value chain analysis finds below.

Low Price

Gartner Research (Smith, 2003) finds price advantage has been effective and consistent with Microsoft's original goal enabling PCs that run Microsoft software on every desktop making the use of software is possible for everybody. As Microsoft accessibility vision explains, they even want to make computing an affordable experience for disabled people (Microsoft.com). This explains why Microsoft wanted to offer low prices to its customers. Microsoft success in offering low price user friendly software had result a massive dependent network of individual software users around the world within a very short time span. Ultimately this huge customer base, earn Microsoft the future prospects and economies of scale. In order to cater the various other technological needs which Microsoft does not afford for the moment of this huge customer base, competitors have to rely on Microsoft core technologies to address them. This makes Microsoft the standard platform for every body. On the other hand repetitively both Microsoft customers  and their competitors had to stay on Microsoft based technologies provided them no other close alternatives. The huge global Microsoft dependent customer base ultimately thrives to a strategic lock-in in favor of Microsoft. In other terms this platforming helps Microsoft to set standards to the industry while dictating terms to their competitors. Microsoft also offers premium software versions for premium prices for a set of premium customers. That may contribute to departmental sustainability but has less strategic significance as the overall strategy is concerned.

As will reveal later Microsoft was always not the first entrance to the market. But gradually they earn the dominance. As proved above Microsoft  intended strategy is focusing on staying low price while providing various means of differentiation.

Figure 1 : Bowman's Clock (Jhonson, Scholes, Whittington, 2008)

Hence having identified above bases of competitive advantage derived from low price while offering more value through differentiation; Applied Bowman’s clock, this analysis finds that Microsoft business strategy is of Hybrid nature.

3 PESTEL Analysis

Macro environmental influences on Microsoft are summarized with in following six categories to identify the key drivers for change.

Key Driver for Change

Microsoft prefers going for differentiation while offering lowest possible prices to reach greater volumes. Therefore Microsoft strategy can be greatly influenced if it’s differentiation capabilities developed on technical and market competences are challenged by external forces. Considered above PESTEL analysis this report argue that Technology is the key driver which could influence impulsively to Microsoft business Strategy. In other words out of the various PESTEL factors Microsoft's sustainability of business is greatly dependent on the ability of competitors to provide better solutions at competitive low prices. The chance for competitors to challenge Microsoft on price has so far become unrealistic due to the economies of scale Microsoft enjoys. However given the fact that today's cutting edge technology could be obsolete tomorrow due to the dynamic nature of the software industry, If Microsoft fails to acquire or innovate the substitute next level technology for their platforms, the existing strategy have better chances to fail.

Having realize this threat, so far Microsoft have been so good in being What's Next.

4 Nature of Competition

So far Microsoft is the leading software provider in the world in terms of its market share. It has faced many types of competitors from competitive products, and industry regulation challenges from various governments. It has actually thrived on this competition, often worrying more about the technology or customers’ wants and needs (Smith, 2003) while the constant focus with competition has kept Microsoft remarkably agile. Sometimes it has also contributed to Microsoft's overly aggressive tactics. Eg : ‘bundling’ which was found guilty of illegally maintaining a monopoly, but escaped with permission to bundle products in any way its sees fit, with relatively minor restrictions. Amazingly Microsoft makes the industry favorable to it by tactical control of five forces.

Figure 2 : Porter’s Five Forces (Porter, 1979)

Threat of new entrants - Low

The way and scale now Microsoft operates makes a big entry barrier for new entrants. On the other hand Microsoft over the years created a very successful coherent network, integrating people, partnerships, businesses, etc making everyone directly or indirectly dependent to Microsoft technologies. For existing customers, this makes hard to switch.

Threat of substitutes – Low

Microsoft offers a broader range. Product wise there can be many substitutes. When it comes to their core products (operating systems, office software package, SharePoint, Internet explorer etc) there are substitutes. But they are not popular due to cross platform limitations. Microsoft having advantage of their operating systems, they successfully avoid customer to move towards competitor products by strictly limiting support for competitors. As find in later part of this report, being second to market, Microsoft has successfully standardized the industry to rely the industry on Microsoft platforms. This makes no close substitutes.

Bargaining power of customers – Low

Microsoft is so innovative and so unpredictable with their capability to introduce new values and features to their customers at low prices. On the other hand customers find no close substitutes as a result.

Bargaining power of suppliers – Low

Microsoft has a well establish diverse customer base which none have. They have enough suppliers and many establish partnerships around the world. As a result Microsoft has a great bargaining power than their suppliers.

Competitive rivalry – Moderate/low

Obviously there is competition for Microsoft products. But for the simple reasons the scale Microsoft operates, and the dependability they maintain, they create a successful lock in while keeping the rivalry at a moderate level.

Provided above industry analysis it is evident that Microsoft is operating at a near monopoly. However following radar was plotted considering the probable challenges to future Microsoft from this industry forces.

Figure 3 : Radar diagram for competitive forces

Disregard economic factors, considered technology; above radar diagram expect barriers to entry can be slightly diluted due to possible external innovations. However it may find harder to challenge the platform dependency Microsoft maintains in their worldwide customer network, if not some explosive innovation. Other four forces can be higher for Microsoft in future considered the effects of diffusion of technologies and probable new inventions. This reflects the need for Microsoft strategy to innovate or acquire new technical capabilities in order to stay ahead in competition. Identified this challenge given the motto “Be what Next”, Microsoft took initiatives to make sure these futuristic innovations to come through their channels.

5 Diagnosing Strategic Capabilities

To determine what strategic capabilities Microsoft has in order to sustain competitive advantages, following will mine the Microsoft value chain.

One would find technically Microsoft value chain is comprehensively integrated to their IT infrastructure network called corpnet. This integration along with their technical capabilities brings central control and efficiency to management; hence let them allow right decision at the right time with minimum effort and minimum mistakes, thus saving cost while adding more value. Microsoft delivers software. There for need of logistics to them is minimum as they can issue software over network to their local agents. They also use IT in advance for customer services and maintenance. They have the capability to advertise, consult, deliver, customer service, finance, interview, maintain, market, support, and recruit, etc with the help of this network around the clock, being globally accessible. Technology development is in-house for them. There for compared to competitors, they also have the cost advantage of developing and maintain technology part of value chain due to their capabilities.

Following table categorizes Microsoft’s capabilities based on the competitive advantage. The aim is to identify its threshold strategic capabilities which help the organization to keep in business and identify their capabilities which earn competitive advantage.

Figure 5 : Resources and competences

Microsoft is the world’s biggest software vendor in terms market share for over 20 years.(Microsoft.com).This will evident Microsoft’s unique capability to market their products. Their success in Market is well supported by their ability to provide more value to the customer (eg; more perceived benefits by unique designs, new features, worldwide acceptance by brand name etc). As will example below, most the time Microsoft was not the first innovator of the new technologies. But their R&D has the capabilities to absorb the existing technologies and make their software more value added to the customers. Taking example like $4.4 billion marketing success of Windows 7 at 2010 (Microsoft.com), people moved to new product though they offered the essentially very same or little more features compared to older version (vista or XP). This will best evident Microsoft’s capability to market same product by adding value through differentiation.

There for this analysis finds Microsoft’s ability to absorb and innovate competitive technologies to market software as their core competence. Further it argues core competence helps Microsoft strategy to take the challenges of key influencing driver (Technology) realized through PESTEL analysis. Following VRIO (Value, Rarity, Inimitability, Organization knowledge) analysis is carried out to understand the how far Microsoft capabilities contribute to sustaining its strategy.

Value

Microsoft offers more value to their customers by many innovative features, brand reputation, quality, reliability accountability etc. Capabilities in R&D have successfully helped them come up with unique features in their products. They bring accountability to their products through various licensing mechanisms. This process is well financed by their sound financing schemes. This process is technically well supported by their IT infrastructure for value chain.

Rarity

Microsoft offers software with unique features like friendly and beautiful user interfaces. Provided above IT infrastructure they have the capabilities for on time customer services, and technical support. They have the capabilities to continuous improvement. They have the capabilities to provide mass customization. This flexibility Microsoft offers found to be rare in the industry.

Inimitability

Microsoft has the intellectual capabilities to come up with innovative products, continuously. They have the biggest software customer base which maintains highly cohesive integrated set of dependencies to Microsoft platform. Being early to the industry they already have standardized the industry so that Microsoft becomes the industry standard.

Organizational knowledge

Bill Gates (Founder, former CEO) once suggested that knowledge is the power and even is the key to success in Microsoft. It is a learning organization that set up communication channels, has mutual coordination and inspiration atmosphere in order to practicing knowledge management and knowledge sharing. Organization’s ability to learn boost their ability to absorb new technologies, and also it will facilitate innovation.

As a result of above factors, this analysis finds that Microsoft’s strategic capabilities are well aligned to the as they facilitate differentiation while can sustain at low prices due the economies of scale, knowledge and experience effect and in house technology advantage.

Following diagram will best explain why Microsoft sustains competitive advantage.

Figure 6 : Sustaining competitive advantage (Jhonson, Scholes, & Whittington, 2008)

As shown in the diagram Price-based and differentiation based capabilities for Microsoft was already discussed before. It also discussed the nature of huge Microsoft’s global customer base. To use Microsoft software customers must definitely have a Microsoft platform. Microsoft been first to dominate the software market successfully created a huge network of Microsoft computers around the world. This was well facilitated by arrival of internet. Then people who wanted to develop technical solution for these computers, they had to use Microsoft technologies. On the other hand earning the advantages of early big entry, they became the industry standard so that all other plug and play devices had to support Microsoft technology. With this mutually inclusive success of cross platform integrity Microsoft ultimately created a lock in.

Finally, Microsoft resources and competences are successfully diagnosed by value chain and VRIO frame work. There Microsoft’s core competence also understood. Core competence is well aligned to the strategy as the bases of differentiation are concerned. It is proved that the Information and technical capabilities Microsoft has also contributed to lower costs. As far as Scale and Profitability of Microsoft business is considered along with their capabilities to continuously improve, it is arguable that Microsoft is having substantial funding resources to sustain in future. Skilled set of Employees at Microsoft is evident to their capabilities to introduce innovative reliable products continuously to market. Existing reputation may also help them recruit best brains to Microsoft. There for considered aspects of People, Finance, Information and Technology, this analysis finds Microsoft has substantial resources to resource its strategy described above.

6 Entrepreneurship

Innovation and entrepreneurship are the fundamental drivers in today’s economy. Innovation is a key aspect of business level strategy of Microsoft as with implications for quality price and sustainability. It was also a strategic direction for Microsoft. Provided the following frame-work for innovation-entrepreneurship, following will examine innovation and entrepreneurship at Microsoft.

 

Timing

Microsoft entrepreneurship (Paul Allen and Bill Gates) is greatly inspired by idea of innovation; to provide an affordable operating system. It was backed by another entrepreneur, Steve Jobs of Apple – who was the innovator of the concept of affordable personal computer (hardware). At the startup the timely innovation on both at software and hardware met at the right time and spotted on the legendary success on entrepreneurship for Microsoft. Not only at the start up, but also during the evolution of business they time their innovations to the correct era. Providing examples, new tablet PC operating systems, new windows mobile operating systems, they provided them at the time when hardware and electronic innovation is ready.

Second Mover

First-mover advantage cannot be always sustainable, and Microsoft has been very effective at being the second company in many markets, and subsequently dominating those markets. Microsoft always creates a lock in.

1. Word Processing Software:
Ø First Mover: WordStar (1979)
Ø Market Leader: Microsoft Word

2. Web Browser:
Ø First Mover: Mosaic (1992)
Ø Market Leader: Microsoft Internet Explorer

3. GUI based operating system
Ø First Mover: MAC OS (1984)
Ø Market Leader: Microsoft windows

Entrepreneurial relationships

Most the time entrepreneurship is about working independent. But Microsoft entrepreneurs created a good relationship network from the start up with other related companies like IBM, Apple, MITS etc. Later based on their technical competence; i.e ability to develop operating systems – they convert these relationships in to alliances. Those roots of entrepreneurship result in a very dependent relation network not only with big players, but also with smaller companies providing a good cohesive ecosystem to the business from the start.

Process Innovation

Microsoft was very innovative in business process. The famous Microsoft DOS was allegedly purchased as 86-DOS (QDOS) from Tim Peterson and made it MS-DOS. They introduced that to IBM in 1981 with a license which made Microsoft get paid for each copy of their operating system and allowed to keep ownership. This believes to be one turning point of Microsoft success. Entrepreneur (Bill Gates) was so innovative to license the software than direct selling. Microsoft never let their operating system obsolete and be commodity like. They introduce software versioning, by which they offer more value by additional features, while silently decline support for older versions.

Product Innovations

Microsoft entrepreneurs claim unique competence for research and development. Their innovative concepts and unique new features are well known around the world. Their capability to do continuous innovation has become so vital to their strategy.

Above discussion proves that Entrepreneurship and roots of innovative culture is more towards market pull than technology driven. It is interested to observe that part of their roots of Entrepreneur methods has been successfully inculcated to the organization culture which will be next described. However these roots effectively contribute to Microsoft differentiation strategy through various means of innovations.

7 Diversity and culture

Diversity and inclusion are integral to Microsoft’s vision, strategy and business success. It creates a corporate culture and an inclusive business environment where the best and brightest diverse minds, work together to meet global consumer demands. The collaboration of cultures, ideas, and different perspectives are considered organizational asset and brings forth greater creativity and innovation (Microsoft.com).

Microsoft is on an accelerated path of growth. To achieve their aggressive leadership goals they leverage the intellectual power by those from a wide range of diverse backgrounds.

Roots of Microsoft culture is examined from cultural web to see how far its strategy being supported by culture.

Figure 8 : Culture web (Jhonson, Scholes, & Whittington, 2008)

Symbols

At Microsoft, office buildings, furnish layouts, product designs, logos, user interfaces etc are very unique (eg: Architecture and gardening of Microsoft R&D centre – Seattle). They look simple fun and easy. But at offices Security (accountability) kept tight. (Security alarms, Entry exit monitoring, camera notices etc). Those may symbolically encourage workers to be security focus - accountable, but to design for convenience and innovation.

Rituals and Routines

This discusses Microsoft’s daily behavior and actions of people that signal acceptable behavior. Microsoft have shaped their work by work-based groupings supported by technology and created effective organizational fields to be updated with everyday internal and external knowledge (eg : Microsoft Tech nuggets groups, email groups, research groups, weekly Microsoft news etc). But employees are always expected to be agile as there are no hard code rituals and routines provided flexible working hours. Being a knowledge organization, this culture makes it easy to bring in new changes whenever it is required.

Power Structure

This refers to the pockets of real power in the company. At Microsoft this may involve few senior executives, and Windows and Windows live department which is most profitable and responsible for core Microsoft operating systems. The key is that these people have the greatest amount of influence on decisions, operations, and strategic direction. At Microsoft these groups are highly interested in differentiation which is well evident through recent releases of Windows operating system, and office software releases – where they essentially offered the very same features that they already had, but in more user friendly manner with very few new features.

Organizational Structures

Microsoft organization structure has hierarchies to foster career growth and leadership. But it still stays more flat. This expects the facilitation of ideas and protection of messenger from low levels. Facilitating the idea flow, they expect innovative solutions from every employee layer. According Microsoft (Microsoft.com), they believe that the passion and creativity of their employees emerge when Employees know their efforts make a difference. So recognition to creativity is one aspect that Microsoft is trying to facilitate by its Flat structures.

Stories

Microsoft has legendary success and loads of criticism and so keen to inculcate that to culture by simple stories with examples about lessons learnt etc. Microsoft has gone to the extent to maintain a web page for success stories about past events and people talked about inside and outside the company. Given example, Microsoft new employees may curious to know about Bill Gates, story. There are many stories internal to Microsoft about how he is a good business thinker. There are also stories in Microsoft which were not in favor of Microsoft leadership, like rotten egg attacks, over employment of employees and legal lessons learnt etc. These kinds of stories help the new comers to understand Microsoft as a curious place with many interesting stories of success and challenge.

Control Systems

There are many rewarding programs, recognition program, to address diverse work groups and they operate on a performance based annual increment rewarding scheme. It is evident that employees get rewarded for good work. Microsoft keeps very tight controls to legal context which can dilute corporate image. There are very tight controls about accepting and rewarding gifts for external parties, using of third-party software with in Microsoft which may legally appear very sensitive to their business. Very tight controls are there to avoid that Microsoft get legally sued as a corporate.

The Paradigm

Above variables of Microsoft culture forms a paradigm of accountable innovative agile knowledge culture which focuses on responsible but fun work environment.

Having identified above aspects of diversity and culture this analysis finds Microsoft culture act as a successful driver for strategy. Culture facilitates differentiation by encouraging creativity, innovative thinking and knowledge while controlling to act very responsibly.

8 Stake holder Analysis

Provided above mission, to help people and businesses throughout the world to realize their full potential this analysis finds, purpose of Microsoft is greatly influenced by expectations of its stake holders worldwide. Following stake holder mapping helps in understanding stake holder expectations against purpose and strategy.

Figure 9 : Power Interest Matrix (Jhonson, Scholes, & Whittington, 2008)

Microsoft is an organization which successfully maintains a strategic locking and operating at a monopoly. As understood in competitor analysis, so far there are no good substitutes for most Microsoft products. On the other hand customers have low bargaining power. In terms of competitors, it is very hard to enter the scale they operate and break through the technical lock-in they sustain as a result of networking effect. Therefore key stake holders who can powerfully influence the strategy must come from organization inside itself. Provided that, above matrix help us to realize - interests of internal powerful top managers has greater influence on the strategy of Microsoft. The initial Entrepreneurship of Microsoft was relatively interested in technological innovations. But the present CEO (Steve Blamer) is having a strong marketing back ground. His interests are clearly evident through his moves like Microsoft retail shops.

However as discussed before, Microsoft has successfully rooted its core values inculcated to their organization culture. Therefore Microsoft’s core strategies will not be greatly diverted in to completely new directions with in short unless otherwise the industry changes at an explosive rate due to new innovations. Microsoft is even mindful and vigilant about such innovations. Their capabilities as second mover proved in past that most such innovations being commercialized ultimately through Microsoft channels.

When the group of stake holders who expects less power, is concerned – they should be the majority for Microsoft. They will be more interested in features and services Microsoft offer while providing them greater value for their computing needs. Indeed Microsoft’s capability to offer greater value to its stakeholders, through differentiation and low price was described throughout this article.

Given about facts this Stakeholder analysis find the strategy of Microsoft supports the purpose for stakeholders. However Microsoft strategy may have vulnerability for a slight change in terms of interest of powerful people.

9 Conclusion

In the fast changing world keeping on track with competition is a challenge. Microsoft being the global software leader, it is facing many challenges from industry forces. But this analysis find they are so far able to keep ahead against competition, by get in early and big strive to become the industry leader. As the leader they successfully create a lock-in by setting the industry standards.

PESTEL analysis realizes Technology as the most influencing Macro environmental factor. Microsoft strategy is explained through Bowman’s clock as a hybrid strategy. Both bases of Differentiation and intended strategy for low price are detailed. Value chain was used as an effective tool to diagnose strategic capabilities. There, threshold capabilities, unique capabilities and Core competence of Microsoft were understood. It was proved that this core competence is well aligned to Microsoft strategy. Strategic capabilities are found sustainable. Microsoft way of maintaining a strategic lock in is revealed. It was proved that Microsoft had the capability to resource the strategies by capabilities of people, technology, funds and information.

Microsoft Entrepreneurship was found not only technology driven but also market pull. Their entrepreneur capabilities successfully inculcated a culture of product innovation and process innovation by deploying diverse skills. It further finds this entrepreneurship is fitting to the strategy. Microsoft culture was explained from cultural web. It was proved that culture acts as a supportive driver for their strategies.

Stakeholder analysis by power interest metrics realizes that most influencing parties to the strategy are internal to the organization. Since the interests of these powerful decision makers can also be influenced by existing culture, the expectations to divert the existing business strategy seem to be lower. However it was revealed that current Microsoft strategy meets the purpose of organization for stakeholders.

10 References

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