Microsoft 1
An Analysis of Microsoft Corporation
By
Mike Downing
Writing for the Workplace Class
Kutztown University of Pennsylvania
March 26, 2008
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Table of Contents
Abstract……………………………………………………………………………….….3
Background………………………………………………………………………………4
Analysis………………………………………………………………………………….6
Conclusions………………………………………………………………………………8
Sources…………………………………………………………………………………..10
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Abstract
This report considers the business strategies of Microsoft Corporation. Despite a
common perception that Microsoft did not anticipate and keep up with the rapid growth
of the Internet, the company continues to
Microsoft is a strong company, because it employs but it needs to continue to pursue new
developments in the market. The demand for personal computers in American and global
markets remains strong despite the growth and increasing popularity of personal
handheld devices
Items to include:
Dominant Operating Systems
Windows Vista
Zune
Xbox
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Company Background
Address:
Microsoft Corporation
1 Microsoft Way
Redmond, WA 98052-6399
United States
Phone: 425-882-8080
Fax: 425-936-7329
Microsoft Company Description
Microsoft bills itself as the “world's #1 software company.” It provides a variety
of products and services, including the Windows operating systems and Office software
suite.
Over time, the company has expanded into markets such as video game consoles,
servers and storage software, and digital music players.
According to Hoovers.com, Microsoft has reached settlements to end a “slew of
antitrust investigations and lawsuits, including agreeing to uniformly license its operating
systems and allowing manufacturers to include competing software with Windows.”
In early 2008 the company made an unsolicited bid to acquire Yahoo! for about
$44.6 billion; Yahoo!'s board rejected the bid as "inadequate".
Competitors
Hoovers.com reports that Microsoft’s top competitors include:
Google of Mountain View, CA
IBM of Armonk, NY
Oracle of Redwood City, CA
Financials
According to Hoovers.com, Microsoft’s Fiscal Year End is June.
2007 Sales (mil.): $51,122.0
2007 Employees: 79,000
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Key Executives
Bill Gates
Chairman, Microsoft Corp.
According to the official Microsoft website, William H.
Gates is chairman of Microsoft Corporation. The site claims that
Microsoft is “the worldwide leader in software, services and
solutions that help people and businesses realize their full potential.”
For the fiscal year ending June 2007, Microsoft had revenues of
US$51.12 billion. It employs more than 78,000 people in 105
countries.
Bill Gates was born on October 28, 1955. He grew up in
Seattle with his two sisters. Their father, William H. Gates II, is a
Seattle attorney. Their late mother, Mary Gates, was a schoolteacher,
University of Washington regent, and chairwoman of United Way
International.
Gates attended public elementary school and the private
Lakeside School. There, he discovered his interest in software and began programming
computers when he was thirteen.
The website claims that, “In 1973, Gates entered Harvard University as a
freshman, where he lived down the hall from Steve Ballmer, now Microsoft's chief
executive officer. While at Harvard, Gates developed a version of the programming
language BASIC for the first microcomputer - the MITS Altair. In his junior year, Gates
left Harvard to devote his energies to Microsoft.
Under Gates' leadership, Microsoft's mission has been to continually advance and
improve software technology, and to make it easier, more cost-effective and more
enjoyable for people to use computers. The company is committed to a long-term view,
reflected in its investment of approximately $7.1 billion on research and development in
the 2007 fiscal year.
On January 1, 1994, Bill Gates married Melinda French Gates. They have three
children.
Steve Ballmer
Chief Executive Officer
According to the official Microsoft website, the Chief
Executive Officer for Microsoft Corporation is Steven A.
Ballmer.
Ballmer joined Microsoft in 1980 and was the first
business manager hired by Bill Gates. During the past 20
years, Ballmer has headed several Microsoft divisions,
including operations, operating systems development, and
sales and support.
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Ballmer was promoted to president of Microsoft in July 1998. This role gives him
responsibility for day-to-day activities at Microsoft. In January 2000, he was named
CEO. Today, Ballmer is “focused on continuing Microsoft’s innovation and leadership
across the company’s seven businesses. Microsoft’s goal is to provide an integrated
platform to enable a seamless experience across a wide range of computing and non-PC
devices and services.”
According to the website, Ballmer was born in March 1956, and grew up near
Detroit, where his father worked as a manager at Ford Motor Co. He graduated from
Harvard University with a bachelor’s degree in mathematics and economics.
Analysis of Microsoft
Part One: Strengths
According to Arthur Hafner and Erica Hibbert, Microsoft has a number of
strengths. In a report entitled ‘SWOT Analysis: Microsoft Corporation,” the authors
argue that one of Microsoft’s strengths lies in its “Flexible workforce through contingent
workers for seasonal/cyclical projects…[and its] Loyal, hardworking, and diverse
workforce (20% minority, 26% women) who, in addition to good compensation, have an
opportunity to do well financially through stock purchases.”
In addition, the authors point to a new project called Neptune, which consists of a
“Window's interface and is an example of smart software…” Microsoft also has a
reputation for processes that allow for timely updating and release of new products.
Financially, the authors report that Microsoft’s revenues and profits have been
rising “at 30% a year with merger/acquisition or investment in 92 companies over past
five years.”
In addition, Microsoft’s software products have high name recognition, broadbased corporate and consumer acceptance (Word, Excel, PowerPoint, Access), and
“numerous powerful features that are in use worldwide, thereby promoting
standardization and competitive advantage through their ease of integration and costeffectiveness.”
Microsoft is rated by Fortune magazine as one of the best companies to work for
and one of the “most admired companies.”
Finally, the Window Operating System is the most dominant OS in the world. The
Windows 95, 98, 2000 series, Windows NT, Windows XP, and Windows Vista are
globally known and hold approximately 80% of the global market.
Part Two: Weaknesses
It is widely reported on the Internet that, between 1990-1995, Microsoft failed to
accurately anticipate the growth or popularity of the Internet. As a result, the company
has been striving to catch up in a number of areas, including the Search Engine realm.
That is why they made an offer to acquire Yahoo.
In addition, Microsoft is also widely known for releasing products too quickly—
some would say “before they are ready.” This puts the company in a position to provide
dozens of “fixes,” “patches,” and “updates” for existing operating systems.
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According to Arthur Hafner and Erica Hibbert, one of the “downsides” of the
rapid product launch mentality is “employee burnout.” As a result, employee turnover has
increased from 6% for a ten year period to 7.4%.
Hafner and Hibbert also argue that “frequent reorganization, red tape, and
autocratic atmosphere dampen employee creativity leading to a loss of key personnel and
chilling of communication and innovation.”
To this point, Microsoft has had little or no significant presence in the wireless
market and Windows CE has been disappointing.
Microsoft is perceived by many in the technology world as a “cut-throat
competitor that uses its dominant market position to marginalize competition by
stealing/destroying the competition's products, stifling product innovation, and
decreasing the availability of competitor products.”
Finally, Microsoft products tend to have a single application focus and do not
work well with or on-top of other products.
Analysis Part Three: Threats
According to Arthur Hafner and Erica Hibbert, Apple and Linux threaten
Microsoft's 88% market share of the desktop operating market. Between 1993-95, Sun
Microsystems, Netscape, Oracle, IBM, AOL, and other companies moved into the
Internet space and defined it while Microsoft failed to anticipate its growth or popularity.
Department of Justice antitrust litigation and current appeal creates uncertainty
among employees since its outcome is not known.
Hardware manufacturers (Sun Microsystems, Oracle, IBM) have collaborated on
new platform technologies that replicate much of the value of Windows.
Hardware manufacturers (Sun Microsystems, Oracle, IBM, AOL, and Apple) are
issuing their own pre-bundled programs on their own hardware.
Linux influence growing from 7% in 1998 to 17% in 1999
Personal computers, mobile-phones, personal digit assistants, entertainmentoriented hand-held computers, and similar wireless products for Internet access do not
require Window operating system products
Rapid development of mobile devices that will displace/replace personal
computers.
Recession or economic slowdown in the U.S. or global market impacts personal
computer equipment sales and their need for an operating systems
Software piracy of commercial and consumer applications software on a global scale
threatens revenue streams
Technology life cycle is shorter and shorter
Unix dominates high-end mission-critical applications and its customers do not
believe Windows can handle these operations
Part Four: Zune
One of Microsoft’s recent big
announcements involves the release of the
Zune MP3 player. According to Scott
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Erickson, senior director of product management for Zune at Microsoft, “Zune gives
consumers a dynamic canvas that is brought to life by the music, pictures, videos and
podcasts they fill it with.”
Each new graphic can be paired with up to three lines of text, letting consumers
add a personal message. If no graphic is chosen, up to five lines of text are available.
A Microsoft press release claims that the Zune Marketplace online store “makes it
easy to load the Zune player with favorite songs that can be shared wirelessly Zune to
Zune or with friends via Zune Social.”
The company also claims that Zune software makes it easy for people to “create
their own playlists in seconds by simply dragging and dropping songs to the playlist
icon.”
The Zune features a 3.2-inch screen and premium in-ear noise-isolating
headphones. Other Zune products include the slim, ultra-portable Zune 4GB and Zune
8GB, available in pink, green, black and red.
All three models offer wireless sync and sharing, a built-in FM tuner, and the new
Zune Pad, a touch-sensitive navigation button that lets people fly through menus or lists
with the flick of the thumb, or click to easily change songs or adjust the volume.
The Zune 80GB (estimated retail price $249), Zune 8GB (ERP $199) and Zune
4GB (ERP $149) are available at retailers nationwide and at
http://www.zuneoriginals.net.
Part Five: Gaming
Press Release: Xbox 360 Becomes First Video Game Console Ever to Invite the World to
Create Original Games and Share Online With Millions
Flood of community-created games to double leading games library.
SAN FRANCISCO — Feb. 20, 2008 — In a landmark announcement during the keynote
address at the annual Game Developers Conference (GDC), Microsoft Corp. promised to
soon allow Xbox LIVE members to play, rate and share community-created games. As
the first in the industry to pioneer high-speed online gaming and high-definition games,
Xbox 360 once again broke new ground by introducing a new, open distribution service
for games created by the community and soon playable by its 10 million Xbox LIVE
members. Community-created games on Xbox LIVE will quickly double the size of the
Xbox 360 game library. By the end of 2008, Xbox 360 owners will have access to more
than 1,000 games, making it the largest, most creatively diverse library across all nextgeneration platforms.
Conclusions
Microsoft is a strong company, because it employs but it needs to continue to
pursue new developments in the market. The demand for personal computers in
American and global markets remains strong despite the growth and increasing
popularity of personal handheld devices
Opportunities include the ability to exploit cheaper global telecommunication
costs open new markets as people connect to the Internet.
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Mobile phone applications and exploitation of personal digital assistants represent
a growth industry so that strategic alliances could provide Microsoft with opportunity in a
market where it currently has little or no significant presence.
The demand for personal computers in American and global markets remains
strong despite the growth and increasing popularity of personal handheld devices
One of its strongest plays may be in the area of gaming.
Sources
Arthur W. Hafner and Erica L. Hibbert “SWOT Analysis: Microsoft Corporation.”
May 31, 2001. March 27, 2008.
http://www.bsu.edu/libraries/ahafner/awh-th-swot-ms.html
“Microsoft.” Hoovers.com. March 27, 2008.
http://www.hoovers.com/microsoft/--ID__14120--/free-co-factsheet.xhtml
Microsoft’s Senior Leaders. Microsoft.com. March 27, 2008.
http://www.microsoft.com/presspass/exec/leadership/default.mspx