Global Business Company Research Project Microsoft
Brief Company History
On April 4th, 1975 Bill Gates and Paul Allen founded Microsoft. It was originally located in Albuquerque, New Mexico. Microsoft moved to Washington State in 1979 and eventually became a multinational technology corporation. In 1987, Bill Gates became one of the world’s youngest billionaires. Bill Gates and Paul Allen started Microsoft to produce software for the Altair 8800. Paul Allen quit his job as a programmer in Boston and Bill Gates left Harvard University to focus on their new company. By the end of 1978, Microsoft made sales of more than $1 million and in 1979 the business moved its headquarters to Bellevue, Washington. The company went on to license its very own MS-DOS operating system to IBM for its first personal computer. Afterward, other computer companies started licensing MS-DOS. In 1983, Allen departed from Microsoft after being diagnosed with Hodgkin’s lymphoma. In 1985, Microsoft released a new operating system known as Windows with a graphical user interface. By the late 1980s, Microsoft would become the world’s biggest personal-computer software company. In 1995 Windows 95 was made available. This section is important because it shows us the history behind such a huge technology giant. Most of the world’s technology has some form of Microsoft technology in it. To know not only how but also where Microsoft originally came from can give insight on what it takes to raise up a successful company. Through careful planning of the current needs and wants of the market, innovating those desires into a business, and then taking care of that business is the key to any successful career.
Operations
The organizational structure of Microsoft can be classified as divisional.
On June 2015, senior management announced that a change in the Microsoft organizational structure to go with a strategic direction of being a product company. This ended up eliminating 7,400 jobs in 2016. The Microsoft organizational structure currently is the result of this initiative. The Microsoft organizational structure is divided into divisions by engineering groups and business functions. Microsoft is divided into four divisions: Cloud and Enterprise Engineering, Office Products, Windows and Devices, and Technology and Research. This is important because each engineering group directly reports to Satya Nadella, who is the CEO. This helps to bring new products and services to the marketplace in a shorter amount of time. The elimination of about 7,400 jobs saved a large amount of financial resources that can be used for new research and marketing.
Microsoft Corporation’s operations management compromises of 10 decisions. These decisions are designs and management. In which operations management deals with ways to create products that make a profit for Microsoft. Quality management is concerned with how customers not only view the product but also how to exceed their expectations. They do this through constant research which aids in the development of new products. Process and Capacity design allows Microsoft to create their products faster and more efficiently through machines and software. This allows very little backups in the production process. Location Strategy puts Microsoft centers in areas where resources can be easily delivered and allows products to be delivered easily to customers. Layout design and strategy allows for the movement of human resources, information, and material to be done in an efficient manner. Job design and human resources deals with the employees, only allowing the best to work out at Microsoft and making sure to keep them there. Supply chain management is governed through computer networks and allow for efficient delivery of products and materials. Inventory management checks that inventory costs are at a minimum, that customer needs are always met, and that stores are always stocked up. Scheduling makes sure that customers and stores receive their desired shipments in a timely manner, Finally, maintenance makes sure that software and hardware are always up to date. This section is important because it shows us how Microsoft has covered all the steps needed to have an efficient business. Each organizational decision benefits another organizational in such a way that no one task go unchecked without the other knowing. Thus, allowing for very few issues in delivery of materials, product production, and finally item delivery to the customer.
Industry Overview and Competitive Landscape
Microsoft itself lands in the 69th place on the Forbes top 100 company list. Microsoft also boasts a market cap of 750$ billion. Competitors such as Netflix have a 777$ billion market shares. This data shows that Microsoft is slowly losing its edge. This could be due to a few reasons such as the costs of switching to another product is either equal in cost or the same. The aggressive advertising from companies such as Netflix, Amazon, and Apple also trump Microsoft in that regard. As ads for these companies are seen much more on TV and the Internet, which are major platforms that consumers use. Also, the diversity from other competition is putting Microsoft on edge. As services such as Netflix or the go-to phone from Apple are preferred over any service that Microsoft can give. The lack of diversity in Microsoft products coupled with the, sometimes, harsh prices to buy a new product has made customers try to find alternatives. All of this combined with the ever-growing supply of technological substitutes is putting Microsoft in a spot that it does not want to be in.
One of the most formidable competitors would have to be Apple. It has a market value of around 800$ billion. It is also one of the top companies on the Forbes list. Its two most well-known products, the Mac and iPhone, is known for its ludicrous pricing. Even though the desktop market is having troubles because of technology such as laptops. The iPhone is the outstandingly popular and has helped Apple make up for the sales of the Mac. Even with this stiff competition Microsoft has earned a larger market share because of its more affordable pricing. Google is also known for the Android operating system which is used on a very large number of android phones and other devices. Google holds the largest market share followed by Bing. Google is also provides competition in cloud based services. Microsoft faces competition from Google mainly in the search engine area. Amazon, a leading name in the tech industry, is also a leading retailer and provides web services. This causes Microsoft and Amazon to be highly competitive. Finally, IBM is yet more competition for Microsoft. This company competes with Microsoft in various ways such as computer software and hardware. This section is important because it reminds us that we do have competition in this capitalistic society. This forces company like Microsoft to constantly improve their products not only quality-wise but also price-wise. Through the fact so many alternatives available Microsoft must constantly be at the top of its game. This in turn will help Microsoft when customers buy their products and realize what a good deal it was rather than switching over to a competitor.
Microsoft faces issues such as increased wanted for greener products, increased focus on business sustainability for the future, and making more products recyclable. Because of the increased desire for green products, Microsoft has requested its customers recycle their products. Microsoft itself is trying to develop more environmentally friendly products and trying to increase the use of green energy in its places of business. This could be because of today’s society wanting businesses to play a more impactful role in preserving the environment. Also, the supply of recyclable materials is an environmental factor that Microsoft can use as a foundation for all future computer hardware and software products which also includes the packaging the product comes in. This section is important because it shows that Microsoft is indeed taking an environmental initiative with its products. The issue comes in when the consumer either throws away any recyclable material where it’s not supposed to be or simply does not follow the guidelines Microsoft tries to provide. This causes Microsoft to be seen as the aggressor as it is its products being thrown out irresponsibly thus having negative implications for all future business for the company.
Marketing
Microsoft is currently available in Afghanistan, Albania, Algeria, American Samoa, Angola, Anguilla, Antigua and Barbuda, Argentina, Armenia, Aruba, Asia Pacific HQ , Australia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Belize, Benin, Bermuda, Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, British Indian Ocean Territory, Brunei, Bulgaria, Burkina Faso, Burundi, Cameroon, Canada, Cape Verde, Cayman Islands, Comoros, Central African Republic, Central & Eastern Europe HQ, Chad, Chile, China, Christmas Island, Cocos (Keeling) Islands, Colombia, Congo DRC, Cook Islands, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Equatorial Guinea, Eritrea, Estonia, Ethiopia, Falkland Islands (Islas Malvinas), Fiji, Finland, France, French Polynesia, French Southern Territories, Gabon, Gambia ,Georgia, Germany, Ghana, Greece, Grenada, Guadeloupe, Guam, Guatemala, Guinea, Guinea, Bissau, Gulf, Guyana, Heard and McDonald Islands, Honduras, Hong Kong SAR, Hungary, Iceland, India, Indian Ocean Territory, Indonesia, Iraq, Ireland, Isle of Man, Israel, Italy, Ivory Coast (Côte d'Ivoire), Jamaica, Japan, Jordan, Kazakhstan, Kenya, Kiribati, Korea, Kuwait, Latvia, Lebanon Lesotho, Liberia, Libya, Lithuania, Luxembourg, Macau SAR, Macedonia, FYRO, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Marshall Islands, Martinique, Mauritius ,Mayotte, Mexico, Micronesia, Moldova, Montenegro, Montserrat, Morocco, Mozambique, Namibia ,Nauru, Nepal, Netherlands, New Caledonia, New Zealand, Nicaragua, Niger, Nigeria, Niue, Norfolk Island, Northern Mariana Islands, Norway, Oman, Pakistan, Palau, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Pitcairn Islands, Poland, Portugal, Puerto Rico, Qatar, Reunion, Romania, Russia, Rwanda, Samoa, São Tomé and Príncipe, Saudi Arabia, Senegal, Serbia, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, Somalia, South Africa, Spain, Sri Lanka, St. Helena, St. Kitts and Nevis ,St. Lucia, St. Pierre and Miquelon, St. Vincent and The Grenadines, Suriname, Swaziland, Sweden, Switzerland, Taiwan, Tanzania, Thailand, Togo, Tokelau, Tonga, Trinidad and Tobago, Tunisia, Turkey, Turks and Caicos Islands, Tuvalu, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Vanuatu, Venezuela, Vietnam, Virgin Islands, Wallis and Futuna, Yemen, Zambia, and finally Zimbabwe. This section is important because it shows how truly massive Microsoft is. It is present in most of the developed countries in the world. This in turns makes it a global power and makes it a household name, if you don’t a Microsoft product you probably own something that has something from Microsoft in it.
Microsoft’s product mix has expanded ever since its humble start as a software developer. Business has expanded to include a numerous number of products such as Microsoft Windows, Bing, Microsoft visual studio, Skype, Internet explorer, Microsoft office, Xbox, and Microsoft Games. For the placing in the marketing mix Microsoft has numerous stores for that reason. For its software and its operating system, Microsoft uses a distributor. For all other software Microsoft has online retailers where software can be bought and downloaded online or bought in the form of CD’s and DVD’s. The online stores serve as a huge seller of Microsoft products because a multitude of products can be bought online. Pricing in the marketing mix of Microsoft tends to fluctuate because of its multiple services and competition. Microsoft has reduced prices but not go as far as to underprice their products this helps keeps a competitive edge on market prices. In terms of operating systems are Microsoft has higher pricing because of its popular operating system. For the promotion aspect of the marketing mix Microsoft has a couple of promotions, which mainly focus on the more popular products. For online products and services Microsoft takes advantage of digital advertising. This section is important because has been Microsoft has become a business which is vastly popular and integrated into a clear majority of technology. After seeing success in its software and OS, it has expanded into numerous other servers and products. Microsoft is always growing and increasing due to its sales from its other products.
Windows from Microsoft is its bestselling product line. Windows is doing well since its release. Microsoft is facing some obstacles in terms of sales. As alternatives for the popular product keep popping up, sales have seen a drop recently. Office is an important aspect to the company. Microsoft has shipped 100 million copies of Office since its release. Microsoft’s attempt to getting partners to invest in Office 365 has more than 18 percent of partners claiming Office 365 important to their businesses. Bing, Microsoft’s search engine will probably never surpass Google as a choice search engine. Due to Microsoft's partnership, with Yahoo, Bing has grabbed 14 percent share of the search market. This section is important because as more businesses and customers are heading for a combination of cloud services and hardware it is more imperative than ever than the need for Microsoft to constantly adapt and cater to their customers’ needs is a must to thrive in the market.
Finance
The data shows that Microsoft has been on a mostly increasing trend in annual revenue by generating revenue by selling and supporting a wider range of products and services like cloud-based software. Also, an increase to global marketing help annual revenue globally. But the vast majority of revenue seems to come from businesses that most likely buy products and services in bulk.
This data shows that Microsoft’s debt is seems to be a little higher than it would like to be. The cash flow looks like it can meet the needs of the company. This could mean that this is a good financial move for Microsoft.
Microsoft's business is stable and rising. Its cloud services is also doing amazing, this can be seen by the $6.8 billion made from it. Microsoft's stock has grown for the last few years, this can be seen by a 39% increase. f) Conclusion I believe Microsoft is more than ready to hit the global Market. Through the stocks showing an ever-increasing trend that Microsoft is doing well and the fact that the cloud service is taking off, Microsoft is more than ready. It also already takes place on the global market by servicing many countries. This combined with the fact that it is constantly reaching into new areas of technology and services, we can imagine where Microsoft will go next and what innovations they will make.
