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Microsoft Corporation: The Future Development Strategy

Clear Focus and Competitors

Information Technology (IT) Industry is one of the fastest developing areas of human activity at the present time. The overall proliferation of technology and innovations in society have brought the IT sphere to the spotlight of social relations. Computers are used at every single job and at every single accommodation, and the companies producing software are developing rather quickly. Microsoft Corporation is the worldwide admitted leader of software production and IT industry (Microsoft Corporation, 2009). Drawing from this, consideration of its new strategy can explain basic principles of success in the sphere of information technology and software production.

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The first point to make while considering Microsoft Corporation is that the company is clearly focused on its goals; it realizes what kind of industry it is in, and what it must do to differ from its competitors and be ahead of them in the IT sphere. First of all, Microsoft is the world’s largest manufacturer of computer software and computerized solutions for facilitating the successful work of computer users all over the globe. Realizing the specificity of the industry it deals with, Microsoft Corporation outlines its mission as follows: “At Microsoft, our mission and values are to help people and businesses throughout the world realize their full potential” (Microsoft Corporation, 2009). Thus, Microsoft realizes all importance of the industry it represents for modern society and aims at being the best in helping people.

Moreover, Microsoft Corporation tries to be different from its major domestic and international competitors. Actually, in the sphere of IT the notions of domestic and international are obsolete as the Internet is a worldwide resource within which the companies from all over the globe act. Drawing from this, the major competitors of Microsoft Corporation are Google Inc., International Business Machines Corp. (IBM), and Oracle Corp. In software production, Microsoft is far ahead of its competitors with the market capital of $205.86 billion, while the closest competitor, Google, has only $140.51 billion as for the beginning of 2009 (Microsoft Corporation (MSFT) Competitors, 2009). Thus, Microsoft Corporation leads the competition in software production, but Internet search is the area of the company’s interest in which Google is ahead. Therefore, the new strategy by Microsoft Corporation aims at taking over the Internet search sphere and improving its customer policies through the latter.

New Strategy

Accordingly, the core assumption that is held by Microsoft Corporation about its future development is that success of the business is based on the high levels of customer and partner satisfaction: “Customer and Partner Experience (CPE) is a company-wide strategy to increase customer satisfaction and improve experiences with our products, programs, and services” (Microsoft Corporation, 2009). Thus, the future development strategy of Microsoft Corporation is aimed at customer and partner policies, and the strategic plan to become a powerful player in the Internet search market is intended to help the company with it. The idea is simple, Microsoft Corporation needs to improve the levels of customer satisfaction in its services and the control over search engines allow the company to be aware of the customer’s buying habits and search histories so that to track customer demands and include them in innovative solutions offered by Microsoft Corporation.

Therefore, to take over the Internet search industry, Microsoft has announced its plans to acquire Yahoo for $45 billion and create the second largest search engine in the Internet after Google (Burrows & Hof, 2009). By such a strategy, Microsoft Corporation aims at sharpening the competition with Google and at receiving access to wider scopes of personal information about its customers.

Strengths and Weaknesses. New Strategy Effectiveness

Needless to say, the creation of the new strategy for such a company as Microsoft Corporation means that the company has certain strengths that need development and certain weak points that Microsoft wants to improve. The strong points of Microsoft Corporation include the dominance in the software production market, the rather developed customer base in this market, annual revenue of $58.44 billion, and the gross margin of 79.2% that exceeds the performance of its competitors almost twice (Microsoft Corporation (MSFT) Competitors, 2009). The merger with Yahoo will provide wider opportunities and respectively increase to all these figures of Microsoft Corporation.

As for the weaknesses of the company, they include the underdeveloped Internet search market position, staying far behind Google in this market, and inability to compete with the latter by its own possibilities. Therefore, the above mentioned merger with Yahoo is the smart strategic step to approach Google in the Internet search market for 20% of the market share that Yahoo capacity will add to the newly created search engine, Bing by Microsoft (Burrows & Hof, 2009). Obviously, the new strategy is effective because it allows Microsoft Corporation to triple its market share in the new industry and become closer to achieving another strategic goal, i. e. improvement customer oriented policies.

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New Strategy Objectives

Accordingly, it is necessary to speak about the specific major and minor objectives that Microsoft Corporation has undoubtedly set up for its new developmental strategy. The two major strategic objectives of Microsoft Corporation include:

  • To develop the company’s presence in the market of Internet search and approach Google as much as possible in this market;
  • To facilitate the improvement of customer oriented policies of the company and increase the levels of customer and partner satisfaction (Microsoft Corporation, 2009).

These objectives are equally important and interrelated. Development of Microsoft Corporation’s presence in the market of Internet search will allow the company to achieve its second major objective, i. e. study its customers’ buying habits, wants, and needs through the Internet search engine options and provide customers with what they want. The minor objectives serving the purpose of achieving the major ones include:

  • To complete the merger with Yahoo;
  • To introduce and develop the joint search engine Bing that would enjoy 35% of the market share;
  • To develop the system of collecting customers’ data through the engine;
  • To modify the policies of customers’ opinion surveys;
  • To provide customers with the wider range of opportunities to communicate their feedback to Microsoft Corporation (Microsoft Corporation, 2009).

The current state of achieving these objectives can be assessed rather positively. The very plan of merger with Yahoo was announced already in 2008, and this year Microsoft Corporation plans to complete the merger. The information about the company’s initiatives has already created much public attention towards its activities. Microsoft Corporation’s customers and partners enjoy the fact that their interests are in the core of the company’s new strategy and that the Yahoo merger will also be aimed at this purpose. Accordingly, the achievement of the second major objective is already in progress, while the first one will be greatly advanced at once after the Yahoo merger is done.

References

  1. Burrows, P. & Hof, R. D. (2009). Yahoo Gives In to Microsoft, Gives Up on Search.
  2. Microsoft Corporation. (2009). Official Web Site. Web.
  3. Microsoft Corporation (MSFT) Competitors. (2009).

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StudyCorgi. 2021. "Microsoft Corporation: The Future Development Strategy." November 2, 2021. https://studycorgi.com/microsoft-corporation-the-future-development-strategy/.

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StudyCorgi. (2021) 'Microsoft Corporation: The Future Development Strategy'. 2 November.

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