Microsoft Corporation – 2013
Forest R. David
A.
Case Abstract
Headquartered in Redmond, Washington, Microsoft is the world's largest software firm with its core
product being the Windows PC operating system and Office business productivity application suite,
sold in part through PC makers. Selling online and through resellers, Microsoft also designs and
manufactures video game consoles (Xbox 360), enterprise applications (Microsoft Dynamics), server
and storage software, and digital music players (Zune). With 90,000 employees, Microsoft also
engages in online advertising and consulting services.
CEO Ballmer at Microsoft has announced his retirement so Microsoft is searching for a new CEO.
Founder and Chairman of the Board Bill Gates exercises substantial control over the Microsoft
organization; Mr. Gates is one of the four people serving on the search committee to locate a successor
to Mr. Ballmer. Mr. Gates is likely going to dominate this search process to the dismay of many
shareholders. The search for a new CEO is being led by John Thompson, the company’s lead
independent director. Mr. Gates’ stake in Microsoft has fallen to five percent, less than half its level of
a decade ago, though he remains the company’s biggest individual shareholder.
B.
Vision Statement (proposed)
To help people around the world reach their fullest potential by utilizing our excellent software,
consulting services, and certification programs.
C.
Mission Statement (proposed)
Microsoft is committed to providing the best operating systems (7), consulting services, certification
programs and gaming consoles (2) in the world (3) to our customers (1). We are able to accomplish
this vision by hiring only the most skilled employees (9) and providing them with cutting edge
technology (4) which results in great products and services for our customers and great returns for our
shareholders (5). Our philosophy is to connect the world through technology (6) while offering our
products at fair prices for all (8).
1.
2.
3.
4.
5.
6.
7.
8.
Customers
Products or services
Markets
Technology
Concern for survival, growth, and profitability
Philosophy
Self-concept
Concern for public image
9.
D.
Concern for employees
External Audit
Opportunities
1.
2.
3.
4.
5.
6.
7.
8.
9.
Smartphone shipments by 2016 are expected to exceed 1,200 million units.
In 2012, China surpassed the USA as the world’s largest smartphone market, yet there are millions
of untapped customers remaining in China.
Cloud services are expected to yield revenues of $100 billion in 2016, up from $40 billion in 2011.
High definition TVs and tablets of today are expected to soon lose market share to gadgets than
can read human emotions and to eye gaze technology that will allow for automatic scrolling and
opening of apps.
Improved technology allows for more web-based software products and applications.
Growing trend among firms to hire employees who have professional certifications.
Many firms now are competing on process and are in need of consulting services.
Growing middle class worldwide especially in Latin America, Eastern Europe, and Asia.
Many telecom providers in the USA will subsidize expensive phones if the customer signs a 2year contract.
Threats
1.
2.
3.
4.
5.
6.
7.
8.
9.
Apple sold over 22 million iPads in Q4 of 2012.
Faltering PC market.
IBM has moved heavily into the consulting business with its acquisition of SPSS.
Google and other competitors are now offering web-based products that work much the same as
MS Office products work.
Skype─ it is estimated that a large percentage of its customers come from emerging markets and
do not have much money to spend.
Apple and Google operating system are the two most popular for smart phone users.
As the tablets video gaming experience increases and becomes closer to the experience on an
Xbox, PlayStation or Nintendo’s market share for traditional gaming consoles may decline.
PlayStation controls 45% of the video game market share.
Piracy remains a problem in the software industry.
Competitive Profile Matrix
Microsoft
Critical Success Factors
Advertising
Market Penetration
Word Processing
Smart Phone Operating System
PC Operating System
Search Engine
Financial Profit
Consulting Services
Professional Certifications
Stock Appreciation over 5 Years
Excessive Goodwill
Totals
Google
Oracle
Weight Rating Score Rating Score Rating Score
0.05
0.09
0.10
0.12
0.09
0.07
0.14
0.08
0.08
0.09
0.09
1.00
3
4
4
2
4
2
4
4
3
1
2
0.15
0.36
0.40
0.24
0.36
0.14
0.56
0.32
0.24
0.09
0.18
3.04
4
3
2
4
2
4
2
2
1
4
3
0.20
0.27
0.20
0.48
0.18
0.28
0.28
0.16
0.08
0.36
0.27
2
2
1
1
1
1
3
3
2
2
1
2.76
0.10
0.18
0.10
0.12
0.09
0.07
0.42
0.24
0.16
0.18
0.09
1.75
All three firms above are fantastic companies with net income over $10 billion in 2012. Microsoft
remains the leader based largely on their MS Office and Windows products. Google is a serious threat
by creating a web based version to compete with MS Office; Microsoft badly lags Google in providing
the operating system for smartphones. It is likely Google will have a higher score than Microsoft on
the same CPM within 3 years.
EFE Matrix
Weight Rating Weighted Score
Opportunities
1. Smartphone shipments by 2016 are expected to exceed 1,200
0.04
2
0.08
million units.
2. In 2012, China surpassed the USA as the world’s largest
0.05
2
0.10
smartphone market, yet there are millions of untapped customers
remaining in China.
3. Cloud services are expected to yield revenues of $100 billion in
0.05
3
0.15
2016, up from $40 billion in 2011.
4. High definition TVs and tablets of today are expected to soon
0.04
3
0.12
lose market share to gadgets than can read human emotions and
to eye gaze technology that will allow for automatic scrolling and
opening of apps.
5. Improved technology allows for more web based software
0.05
2
0.10
products and applications.
6. Growing trend among firms to hire employees who have
0.04
3
0.12
professional certifications.
7. Many firms now are competing on process and are in need of
0.06
2
0.12
consulting services.
8. Growing middle class worldwide especially in Latin America,
0.04
3
0.12
Eastern Europe, and Asia.
9. Many telecom providers in the USA will subsidize expensive
0.03
2
0.06
phones if the customer signs a 2-year contract.
Threats
1. Apple sold over 22 million iPads in Q4 of 2012.
2. Faltering PC market.
3. IBM has moved heavily into the consulting business with its
acquisition of SPSS.
4. Google and other competitors are now offering web-based
products that work much the same as MS Office products work.
5. Skype, it is estimated a large percentage of its customers come
from emerging markets and do not have much money to spend.
6. Apple and Google operating system are the two most popular for
smart phone users.
7. As the tablets video gaming experience increases and becomes
closer to the experience on an Xbox, PlayStation or Nintendo’s
market share for traditional gaming consoles may decline.
8. PlayStation controls 45% of the video game market share.
9. Piracy remains a problem in the software industry.
TOTALS
Weight Rating Weighted Score
0.05
2
0.10
0.07
2
0.14
0.07
2
0.14
0.10
2
0.20
0.04
2
0.08
0.10
2
0.20
0.06
3
0.18
0.06
0.05
1.00
3
3
0.18
0.15
2.34
The 2.34 reveals room for improvement for Microsoft on external issues. The firm needs to move
to more web-based software, increase its market share in tablets & smartphones, and offer more
certifications, moving forward.
E.
Internal Audit
Strengths
MS is the world’s largest software company and had record revenues of $73 billion in fiscal 2012.
MS offers consulting services, cloud-based services, and training certifications, as well as online
products such as Bing, MSN, adCenter, and Atlas.
3. MS owns Skype, has an alliance with Nokia, and recently introduced a Windows Phone, and a
Windows tablet computer named “Surface.”
4. The Server and Tools Division offers developer tools, training and certifications.
5. The Server and Tools division revenues grew 12% from in year-end 2012.
6. Revenues outside the USA in 2012 accounted for 47% of total revenue.
7. MS is developing technologies that increasingly enable touch screen and voice to be more readily
understood by PCs, tables and phones.
8. MS Office enjoys over 90% of the market share.
9. Firm is extremely healthy on most financial ratios.
10. Many PC makers such as Acer, Lenovo, Dell, Hewlett-Packard, and Toshiba pre-install MS software
on devices.
1.
2.
Weaknesses
1.
2.
3.
4.
5.
6.
Sales of MS’s new Surface tablet were fewer than 1 million in Q4 of 2012.
MS remains heavily reliant on Windows software sales as a percent of companywide revenue.
Consulting services only accounted for around 5% of total 2012 revenue.
Over $14 billion in goodwill on the balance sheet.
All divisions other than Server and Tools experienced slow growth or negative growth in 2012.
90% of all revenues in the MS Business segment are derived from MS Office.
7.
8.
Xbox sales declined $113 million in 2012.
With the Skype purchase price of $8.5 billion, MS is in essence paying around $1,000 for each
customer who is worth around $30 each.
9. No dedicated users. Apple users love to show that they are using Apple devices, but few are proud of
using an MS device.
10. With virtually no debt, MS is not using debt in this low interest rate environment to its full advantage.
Financial Ratio Analysis
Profit Margin Percent
Gross Margin
Pre-Tax Margin
Net Profit Margin
Microsoft
73.99
34.75
28.08
Industry
75.58
35.06
28.28
Liquidity Ratios
Debt/Equity Ratio
Current Ratio
Quick Ratio
0.16
2.71
2.53
0.24
2.77
2.58
Profitability Ratios
Return On Equity
Return On Assets
Return On Capital
30.09
16.58
24.9
28.41
15.7
22.77
Efficiency Ratios
Income/Employee
Revenue/Employee
Receivable Turnover
Inventory Turnover
Asset Turnover
220,838
786,353
4.68
13.17
0.59
123,791
470,524
6.27
12.75
0.56
Microsoft is a healthy company performing well on most all financial ratios.
Net Worth Analysis (in millions)
Microsoft Company Worth Analysis
Stockholders' Equity - (Goodwill + Intangibles)
Net Income x 5
(Share Price/EPS) x Net Income
Number of Shares Outstanding x Share Price
$61,206
$109,315
$293,032
$289,089
Method Average
$188,160
Google Company Worth Analysis
Stockholders' Equity - (Goodwill + Intangibles)
Net Income x 5
(Share Price/EPS) x Net Income
Number of Shares Outstanding x Share Price
$53,705
$53,685
$294,128
$335,331
Method Average
$184,212
Microsoft and Google are worth approximately the same using the 3 method average. However, using
method number four (possibly a more accurate method), Google is worth about 16% more than Microsoft.
IFE Matrix
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Weight Rating Weighted Score
Strengths
MS is the world’s largest software company and had record
0.06
4
0.24
revenues of $73 billion in fiscal 2012.
MS offers consulting services, cloud based services and training
certifications as well as online products such as Bing, MSN,
0.05
4
0.20
adCenter, and Atlas.
MS owns Skype, has an alliance with Nokia, and recently
introduced a Windows Phone and a Windows tablet computer
0.05
3
0.15
named “Surface.”
The Server and Tools Division offers developer tools, training
0.05
4
0.20
and certifications.
The Server and Tools division revenues grew 12% from in year0.04
4
0.16
end 2012.
Revenues outside the USA in 2012 accounted for 47% of total
0.03
3
0.09
revenue.
MS is developing technologies that increasingly enable touch
screen and voice to be more readily understood by PCs, tables
0.03
3
0.09
and phones.
MS Office enjoys over 90% of the market share.
0.06
4
0.24
Firm is extremely healthy on most financial ratios.
0.06
4
0.24
Many PC makers such as Acer, Lenovo, Dell, Hewlett-Packard,
0.05
4
0.20
and Toshiba pre-install MS software on devices.
Weight Rating Weighted Score
Weaknesses
Sales of MS’s new Surface tablet were fewer than 1 million in Q4
0.05
1
0.05
of 2012.
MS remains heavily reliant on Windows software sales as a
0.05
1
0.05
percent of companywide revenue.
Consulting services only accounted for around 5% of total 2012
0.06
1
0.06
revenue.
Over $14 billion in goodwill on the balance sheet.
0.02
1
0.02
All divisions other than Server and Tools experienced slow
0.08
1
0.08
growth or negative growth in 2012.
90% of all revenues in the MS Business segment are derived
0.05
1
0.05
from MS Office.
Xbox sales declined $113 million in 2012.
0.05
1
0.05
With the Skype purchase price of $8.5 billion, MS is in essence
paying around $1,000 for each customer who is worth around
0.07
1
0.07
$30 each.
No dedicated users. Apple users love to show that they are
0.06
1
0.06
using Apple devices, but few are proud of using an MS device.
10. With virtually no debt, MS is not using debt in this low interest
rate environment to its full advantage.
TOTALS
0.03
1.00
2
0.06
2.36
The 2.36 reveals room for improvement at Microsoft in addressing internal issues. Moving forward, the
firm needs to allocate more resources to phones and consulting services as the firm remains too dependent
on Windows and MS Office software.
F.
SWOT
SO Strategies
1.
2.
3.
4.
Further develop MS certification programs (S2, S4, O6).
Invest $100 million to improve consulting services (S1, S2, O7).
Invest $200 million in advertising and marketing to promote the Windows phone in Latin America (S3,
S6, O1, O8).
Form an alliance with telecom providers in the USA to help subsidize the prices of phones for
customers who sign a two year contract (S1, S3, O9)
WO Strategies
1.
2.
3.
4.
Spend $30 million to promote X-Box sales in Latin America (W7, O8).
Invest $200 million in advertising and marketing to promote the Windows phone in China (W1, O1,
O2).
Invest $200 million in advertising and marketing to promote the Windows phone in Latin America
(W1, W2, O1, O8).
Invest $100 million to improve consulting services (W3, O7).
ST Strategies
1.
2.
3.
Lower prices by 50% on the Surface tablet (S3, T1, T6).
Invest $100 million to improve consulting services (S1, S2, T3).
Further develop MS certification programs (S2, S4, T2, T4).
WT Strategies
1.
2.
3.
Lower prices by 50% on Surface tablet (W1, T1, T6).
Divest the X-box business line (W7, T7, T8).
Divest Skype (W4, W8, T5).
G.
SPACE Matrix
FP
Conservative
Aggressive
7
6
5
4
X = 4.2
Y = 0.8
3
2
1
CP
-7
-6
-5
-4
-3
-2
1
-1
2
4
3
5
6
7
IP
-1
-2
-3
-4
-5
-6
-7
Defensive
Internal Analysis:
Financial Position (FP)
ROA
Debt/Equity
Net Income
Excessive Goodwill
Company Worth
Financial Position (FP) Average
Internal Analysis:
Competitive Position (CP)
Market Share
Product/Service Quality
Monopolistic Nature of Key Products
Technological know-how
Access to Capital
Competitive Position (CP) Average
SP
5
5
5
3
6
4.8
-2
-2
-1
-4
-1
-2.0
Competitive
External Analysis:
Stability Position (SP)
Rate of Inflation
Technological Changes
Governmental Regulations
Competitive Pressure
Barriers to Entry into Market
Stability Position (SP) Average
External Analysis:
Industry Position (IP)
Growth Potential
Financial Stability
Ease of Entry into Market
Public's Dependence on Products/Services
Profit Potential
Industry Position (IP) Average
-2
-6
-2
-6
-4
-4.0
7
6
5
7
6
6.2
Microsoft is in the Aggressive Quadrant of the SPACE Matrix. It is important the firm expand consulting services
as well as acquire market share in the smartphone market. SP scores of -6 on Technological Changes and
Competitive Pressure will eventually erode into FP factors such as ROA and Net Income and move Microsoft into
the Competitive Quadrant.
H.
Grand Strategy Matrix
Rapid Market Growth
Quadrant II
Quadrant I
Weak
Competitive
Position
Strong
Competitive
Position
Quadrant III
Quadrant IV
Slow Market Growth
Difficult to place Microsoft in the Grand, as the PC market is experiencing slow market growth while
smartphones are still growing rapidly outside the USA. Microsoft has a strong footing on traditional
products and will likely remain here for the next few years, but desperately needs to shift resources to
smartphone operating systems, consulting services, and professional certifications in order to maintain their
position within the Grand.
I.
The Internal-External (IE) Matrix
The Total IFE Weighted Scores
Strong
4.0 to 3.0
4.0
I
Average
2.99 to 2.0
II
Weak
1.99 to 1.0
III
Server and Tools
High
Microsoft Business
3.0
IV
V
The
EFE
Total
Medium
Weighted
Scores
VI
Entertainment and Devices
Windows and Windows Line
2.0
Low
1.0
VII
VIII
IX
Segment
Windows and Windows Line
Server and Tools
Microsoft Business
Entertainment and Devices
Online Services (not used in IE calculations)
Corporate Level Activity (not used in IE calculations)
Totals
2012 Total Sales
(in billions)
$18.4
18.7
24.0
9.5
2.9
$73.7
2012 Profits (in billions)
$11.5
7.4
15.7
0.4
(8.1)
(5.1)
$16.9
Microsoft Business division continues to power the firm forward; however, with this segment consisting mostly of
the popular MS Office package, it is at extreme risk of Google producing a popular web-based alternative. The
Sever and Tools division consists of software such as SQL, Visual Studio and others, but also consists of training
and certifications. There is a large external market for services such as these as revealed by the high EFE placement
of this division. The firm should work to grow and build these services. Microsoft’s Entertainment division
includes the X-Box and Skype. This division, while having a sustainable product line, faces extreme pressure from
Sony and other video game manufacturers as well as from free video chat platforms online that affect the Skype line.
It is possible this division should be divested as resources could be better allocated elsewhere, even though Skype
was just purchased.
J.
QSPM
Spend $300M Spend $400M
to Improve
to Promote
Consulting the Windows
and
Phone and
Certification
Surface
Programs
Tablet
Weight
Opportunities
1. Smartphone shipments by 2016 are expected to exceed 1,200
0.04
million units.
2. In 2012, China surpassed the USA as the world’s largest
smartphone market, yet there are millions of untapped customers
0.05
remaining in China.
3. Cloud services are expected to yield revenues of $100 billion in
0.05
2016, up from $40 billion in 2011.
4. High definition TVs and tablets of today are expected to soon
lose market share to gadgets than can read human emotions and
0.04
to eye gaze technology that will allow for automatic scrolling and
opening of apps.
5. Improved technology allows for more web based software
0.05
products and applications.
6. Growing trend among firms to hire employees who have
0.04
professional certifications.
7. Many firms now are competing on process and are in need of
0.06
consulting services.
8. Growing middle class worldwide especially in Latin America,
0.04
Eastern Europe, and Asia.
9. Many telecom providers in the USA will subsidize expensive
0.03
phones if the customer signs a 2-year contract.
Weight
Threats
1. Apple sold over 22 million iPads in Q4 of 2012.
0.05
2. Faltering PC market.
0.07
3. IBM has moved heavily into the consulting business with its
0.07
acquisition of SPSS.
4. Google and other competitors are now offering web-based
0.10
products that work much the same as MS Office products work.
5. Skype, it is estimated a large percentage of its customers come
0.04
from emerging markets and do not have much money to spend.
6. Apple and Google operating system are the two most popular for
0.10
smart phone users.
7. As the tablets video gaming experience increases and becomes
closer to the experience on an Xbox, PlayStation or Nintendo’s
0.06
market share for traditional gaming consoles may decline.
8. PlayStation controls 45% of the video game market share.
0.06
9. Piracy remains a problem in the software industry.
0.05
AS
TAS
AS
TAS
1
0.04
4
0.16
1
0.05
4
0.20
3
0.15
1
0.05
0
0.00
0
0.00
0
0.00
0
0.00
4
0.16
1
0.04
4
0.24
1
0.06
2
0.08
4
0.16
1
0.03
2
0.06
AS
1
4
TAS
0.05
0.28
AS
4
3
TAS
0.20
0.21
4
0.28
1
0.07
0
0.00
0
0.00
0
0.00
0
0.00
1
0.10
3
0.30
1
0.06
2
0.12
0
0
0.00
0.00
0
0
0.00
0.00
Spend $300M Spend $400M
to Improve to Promote
Consulting the Windows
and
Phone and
Certification
Surface
Programs
Tablet
Weight
Strengths
1. MS is the world’s largest software company and had record
0.06
revenues of $73 billion in fiscal 2012.
2. MS offers consulting services, cloud based services and training
certifications as well as online products such as Bing, MSN,
0.05
adCenter, and Atlas.
3. MS owns Skype, has an alliance with Nokia, and recently
introduced a Windows Phone and a Windows tablet computer
0.05
named “Surface.”
4. The Server and Tools Division offers developer tools, training
0.05
and certifications.
5. The Server and Tools division revenues grew 12% from in year0.04
end 2012.
6. Revenues outside the USA in 2012 accounted for 47% of total
0.03
revenue.
7. MS is developing technologies that increasingly enable touch
screen and voice to be more readily understood by PCs, tables
0.03
and phones.
8. MS Office enjoys over 90% of the market share.
0.06
9. Firm is extremely healthy on most financial ratios.
0.06
10. Many PC makers such as Acer, Lenovo, Dell, Hewlett-Packard,
0.05
and Toshiba pre-install MS software on devices.
AS
TAS
AS
TAS
0
0.00
0
0.00
4
0.20
1
0.05
1
0.05
4
0.20
4
0.20
1
0.05
4
0.16
1
0.04
0
0.00
0
0.00
1
0.03
3
0.09
0
0
0.00
0.00
0
0
0.00
0.00
0
0.00
0
0.00
Weight
Weaknesses
Sales of MS’s new Surface tablet were fewer than 1 million in Q4
0.05
of 2012.
MS remains heavily reliant on Windows software sales as a
0.05
percent of companywide revenue.
Consulting services only accounted for around 5% of total 2012
0.06
revenue.
Over $14 billion in goodwill on the balance sheet.
0.02
All divisions other than Server and Tools experienced slow
0.08
growth or negative growth in 2012.
90% of all revenues in the MS Business segment are derived
0.05
from MS Office.
Xbox sales declined $113 million in 2012.
0.05
With the Skype purchase price of $8.5 billion, MS is in essence
paying around $1,000 for each customer who is worth around
0.07
$30 each.
No dedicated users. Apple users love to show that they are
0.06
using Apple devices, but few are proud of using an MS device.
With virtually no debt, MS is not using debt in this low interest
0.03
rate environment to its full advantage.
AS
TAS
AS
TAS
1
0.05
4
0.20
0
0.00
0
0.00
4
0.24
1
0.06
0
0.00
0
0.00
3
0.24
1
0.08
4
0.20
3
0.15
0
0.00
0
0.00
0
0.00
0
0.00
1
0.06
3
0.18
0
0.00
0
0.00
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
TOTALS
2.95
2.73
Both options have approximately the same weighted scores, and with Microsoft’s capital position, both
should be implemented. Microsoft desperately needs to allocate resources away from the traditional PC
market.
K.
Recommendations
1.
2.
3.
4.
5.
6.
L.
Invest $100 million to improve consulting services.
Invest $200 million in advertising and marketing to promote the Windows phone in Latin America.
Spend $30 million to promote X-Box sales in Latin America.
Invest $200 million in advertising and marketing to promote the Windows phone in China.
Lower prices by 50% on the Surface tablet.
Further develop MS certification programs for $200 million.
EPS/EBIT Analysis (in millions expect for EPS and Share Price)
Amount Needed: $730
Stock Price: $ 34.58
Shares Outstanding: 8,360
Interest Rate: 3%
Tax Rate: 19%
EBIT
Interest
EBT
Taxes
EAT
# Shares
EPS
Common Stock Financing
Recession
Normal
Boom
$20,000
$30,000
$40,000
0
0
0
20,000
30,000
40,000
3,800
5,700
7,600
16,200
24,300
32,400
8,382
8,382
8,382
1.93
2.90
3.87
EBIT
Interest
EBT
Taxes
EAT
# Shares
EPS
Recession
$20,000
16
19,984
3,797
16,187
8,367
1.93
30 Percent Stock
Normal
$30,000
16
29,984
5,697
24,287
8,367
2.90
Boom
$40,000
16
39,984
7,597
32,387
8,367
3.87
Recession
$20,000
23
19,978
3,796
16,182
8,360
1.94
Debt Financing
Normal
$30,000
23
29,978
5,696
24,282
8,360
2.90
Boom
$40,000
23
39,978
7,596
32,382
8,360
3.87
Recession
$20,000
7
19,993
3,799
16,195
8,375
1.93
70 Percent Stock
Normal
$30,000
7
29,993
5,699
24,295
8,375
2.90
Boom
$40,000
7
39,993
7,599
32,395
8,375
3.87
Debt financing is the most attractive for Microsoft given that it maximizes EPS, and the firm has a low
debt/equity ratio.
M.
Epilogue
In mid-June 2013, Microsoft announced that it is partnering with Best Buy to open 500 Windows Store
locations inside Best Buy stores across USA. The strategy could help both companies but especially
Microsoft, which was late to the game on tablets and smartphones, and its offerings -- the Surface and the
Windows Phone have struggled. Microsoft has already dabbled into retail with its shops, kiosks, and popups mainly dedicated to Surface tablets, but Windows Stores inside Best Buy stores will expand that model
to include PCs from its original equipment manufacturer partners. The store-within-store will help
Microsoft get its brand seen by electronics shoppers without the company having to make a big capital
investments for stores.
Also in June 2013, Windows Phone in the USA vastly improved its voice capabilities to improve the speed
and accuracy of voice to text and voice search. Now when Windows Phone users compose a text message
or search using voice, Bing will return results twice as fast as before and increase accuracy by 15 percent.
Also in June 2013, Microsoft opened its newest retail store at Ala Moana Center in Honolulu, with the help
of Seattle-based megastars Macklemore and Ryan Lewis and alternative group Neon Trees. More than
4,000 customers came out for the grand opening, some of whom camped out the night before to be the first
ones in the door.
Microsoft's new strategy and organizational structure is focused around integrated "devices and services"
and championed by both Chairman Gates and CEO Ballmer. However, many analysts say this focus is bad
for Microsoft; and that a new, visionary CEO is needed to help the company change course before it's too
late. Microsoft in 2013 reorganized itself around devices and services. The move is somewhat unorthodox.
Through introduction of its Surface tablet and its rollout of dedicated retail stores, Microsoft has been
transforming itself structurally into something similar to Apple.
Chapter 19: Microsoft
10 Basic Questions
1:
D
2:
C
3
B
4:
B
5:
C
6:
C
7:
B
8:
B
9:
A
10:
C
15 Applied Questions
Projected Financial Statements
1:
C
2:
B
3:
D
4:
D
5:
A
Grand Strategy Matrix & Quantitative Strategic Planning Matrix (QSPM)
1:
A
2:
B
3:
C
4:
B
5:
B
Strengths, Weaknesses, Opportunities, Threats (SWOT) Matrix
1:
A
2:
D
3:
D
4:
B
5:
B