A study was conducted on Microsoft to analyze their success. The research examined their strategies, successes, and challenges faced. The results of the study demonstrated Microsoft’s ability to stay competitive in a rapidly changing market.
Microsoft creates and revolutionizes new apps and services to help their users succeed against their rivals and competitors. The case studies show multiple instances when Microsoft was facing a competitor or a threat to its position and Microsoft managed to win. Apple released Macintosh. Microsoft quickly responded with Windows 1.0. Microsoft considered it to be a superior operating system. Lotus was the dominant domain initially but Microsoft overtook them with a better, simpler and bundled product.
Microsoft offers many bundles. Microsoft was a dominant player in the market with a 95% share. However, they were hit by an antitrust lawsuit that restricted them from bundling their deals. Microsoft adopted a cost-leadership strategy after the antitrust ruling, in which it tried to lower its prices and sell at lower prices. By offering smaller bundles at lower prices, they beat Linux. Linux was soon left behind. Other challenges include Java, WordPerfect, Lotus 1-2-3 and Lotus 1-2-3. However, they maintained their vast market share while sticking to the same ideals of producing superior products at a less expensive price. Microsoft’s ability to produce superior products at a lower price has allowed it to be a reliable partner throughout its history. Google had a competitive advantage because it was the first to market in this industry. Their unique product was a major innovation in the search market. Google’s product was extremely competitive and allowed them to establish a monopoly quickly. Google also used cost-per-click advertising, which meant advertisers paid only when users clicked on an ad.
Because it was simple, the cost-per-click advertising strategy allowed advertisers instant feedback. They could simply see if people were clicking on their ads. This feedback was invaluable to advertisers and motivated more to invest in google’s new strategy. This made them more valuable. This gave google an economic benefit and allowed them to shift to customer-oriented approaches. It also gave them a greater competitive advantage.
Google earned over $17 Billion in ads revenue alone in 2015. This was an increase of 12% over the year before and part of a steady growth year. Over 400,000 advertisers have chosen to advertise with them, which is more than Yahoo! and Microsoft. Microsoft held 8.3% (Exhibit 3) of the market share during November 2008. This was due to what the Microsoft team called a “vicious spiral”. Microsoft was 3rd overall in the search sector, which would be considered a fair market share. But it wasn’t enough for them to compete with google.
PepsiCo has 21% market share, while Coca Cola has 48%. This helps to understand the situation. Despite the 27% difference, Coca-Cola remains the primary provider of soft drinks to 25 of the most popular fast-food chains. PepsiCo’s soft drink revenue alone for last year was $19 billion more than Cokes. Google held a 3.5% share of the market, almost half that of Coca-Cola. Microsoft tried to compete in this industry despite the 55.2% difference between google and Microsoft market shares.
Pepsi and Coke are just one example of the impact that a small market share has on an industry. Google had a large competitive advantage in market share and market share, compared to Microsoft’s yahoo. Microsoft was well-known for its innovation and amazing prices. Microsoft also continued the trend with search and related advertising. It was impossible to leave such a lucrative market. Google was initially focusing on the cost per Click advertising, but Microsoft soon realized that it was time to create economic value.
Many unknowns surrounded the search industry and it initially didn’t seem appealing to many companies or consumers. Microsoft had once been the dominant computer and software company, but as google began to gain marketshare and power, Microsoft took the defensive. Microsoft has been in control since 1975. It has created great products and surpassed its rivals through its focus on the best. They weren’t going to allow google to change this. Microsoft’s strategy was to fight google’s cost per click advertising. However, it couldn’t attack any departments that it wasn’t fully familiar with to avoid the risk of their large domain being lost and other competitors taking over. They created new products at cheaper prices than others and tried their best to preserve its internet browser market, which it had dominated. But then google came out soon with google chrome. This has been a constant battle as google chrome gradually gains the upper hand.
They were able to keep competitors out of many areas. However, they could not control all the competition. Although they attempted to protect google’s market share and not allow them to expand into other areas, their defensive strategy did not succeed. Instead, google was allowed to access the internet browser and have been able to establish themselves as a major player in the sector. Microsoft should carry on the tradition of its past but adopt a more product-oriented strategy.
Microsoft has always been the leader in offering a better product at an affordable price. Microsoft is well-known for offering bundles that include Microsoft word and PowerPoint. However, the cloud is something that Microsoft has yet to fully embrace. Apple already uses cloud computing to offer customers continuous updates and bug fixes. Customers can stay happy for longer periods of time because it is able to offer them constant updates. Forbes magazine recently published an article about Apple’s ability to ship updates in weeks rather than months. Projects that normally take years can be completed in months thanks to cloud computing.
Cloud computing refers not to local servers, but rather to servers hosted online. This allows them spread out the work and has more people working on it. Everyone understands what is being done and can communicate what they are doing. Microsoft can better manage its resources by using cloud computing. This will allow Microsoft users to access more Microsoft products simultaneously and to be able constantly to improve and update their Microsoft products. Microsoft will have the ability to manage multiple programs from one device with cloud computing.
Apple has already done this with its own IPhones. With cloud computing, you can take a photograph on your phone. It will then be available on your Macbook. Microsoft already sells a variety products, including phones, computers and gaming systems. Microsoft currently holds 82.88% of global desktop market share for Windows and has sold more than 6.23 million Xbox Ones in 2016. (statista.com). This means they have large desktop market share and many people own an Xbox. It would be great if these people could connect, as there are so many Microsoft products. Microsoft uses cloud computing to monitor corporate trends such as Office 365, Azure portfolio services and Office 365. (Forbes.com). Using cloud computing allows people to stay connected across all their devices. I don’t believe Microsoft has yet entered that market. Works cited:
Gordon, Kyle. “Topic: Microsoft.” Statista, www.statista.com/topics/823/microsoft/.
Lutz, Ashley. “See Which Major Restaurants Serve Coca-Cola Vs. Pepsi.” Business Insider, Business Insider, 17 Dec. 2013, www.businessinsider.com/restaurants-that-serve-coke-vs-pepsi-2013-12.
Gordon, Kyle. “Topic: Google.” Statista, www.statista.com/topics/1001/google/.”
Coca Cola: Beverage Market Share 2015.” Statista, www.statista.com/statistics/387318/market-share-of-leading-carbonated-beverage-companies-worldwide/.
“Microsoft’s Search.” Harvard Business Publishing, hbsp.harvard.edu/download?url=/courses/541540/items/709461-PDF-ENG/content&metadata=e30=.
Lopez, Maribel. Forbes Magazine, April 19, 2016. 2016, www.forbes.com/sites/maribellopez/2016/04/19/7-reasons-to-give-microsofts-strategy-another-look/#39f072ec7dd0.
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