Product and Marketing Evolution
Microsoft (MS) has developed its product range and marketing strategies throughout years of continuous improvement and innovation. The history of evolution dates back to the early 1980s when MS launched the Disk Operating System (DOS) for personal computers. Consequently, uniting DOS, Windows Operating System, Mouse, and Microsoft Office under one name of Microsoft, was the company’s primary promotional approach. It was a wise move to increase market share and initiate the building of strong consumer loyalty. The next decade was marked with the creation of Windows 3.0 with an outstanding graphical interface. The company was pouring money into advertising and endorsement on the part of reputable papers. Nevertheless, the success was mostly due to the constant progress and modernization pronounced in MS’s slogan “Where Do You Want to Go Today?” The company proceeded to update operating systems and introduce novelties such as Xbox. However, Apple’s return to the market, Vista failure, and financial crisis led to a loss of consumer share and reputation. Consequently, late entrance into the smartphone industry did not contribute to the further restoration of the image as the major players were already determined.
Recent Expansion
The relatively recent introduction of the search engine, Bing, and Microsoft Mobile failed to comply with high standards. By the time MS proposed the products, the industry was full of well-established competitors such as Samsung and Google. The company could not develop a suitable operating system for cell phones, lacking the incentive to innovate because of the low budget and high competition level. Moreover, consumers themselves did not show an enthusiasm to learn and explore an interface. A small user base implied that the platform never became attractive to software developers. A similar statement can be made about Bing since by that time Google itself proved to be the searching platform leader. In this case, consumer loyalty played a crucial role as customers were in favor of familiar and simple Google pages with efficiency tested years ago. Therefore, it can be noted that MS’s growth in unaccustomed directions had a detrimental impact on its image and overall productivity level as well as the incentive to innovate. The company’s slow response to consumer needs allowed other businesses to enter and the market, leading to cut-throat competition in which MS was defeated.
Ethical Implications
The ethical implications can be observed through the browser wars that started in the mid-1990s. MS’s capabilities were vastly different from those of Netscape Communications, and Bill Gates was willing to capture another promising market. The corporation had started to lobby specifically for improvements to the established standard, based on its customers’ needs and predilection. As a result, this strategy gave Microsoft full control of the industry. Moreover, the giant’s top managers poached the company’s vital employees and moved on to threats if that failed. The corporation pressured the opponent’s valuable customers to prevent from supplying them with software. Following lawsuits from Netscape made a weighty argument that MS was violating fair competition regulations. From its actions, it can be noticed that the company attempted to gain monopoly power so that to dominate and yield more profit. Alternatively, Microsoft might modify its policies by changing the tactics when new businesses enter the market. The threat of losing a spot in the industry can be offset by persistent product innovation and thoughtful advertising strategies. Hence, abiding by the rules of free competition may help the company to maintain ethical values.
Situational Analysis
PEST Analysis is a system used to assess the external environment for business via differentiating opportunities and threats by political, economic, social, and technological factors. In Microsoft’s case, the external environment indicates the performance of the hardware and software market. The political component is mainly focused on government legislation that may impact the industry’s potential and capabilities in which business operates. The legislative steadiness creates opportunities for MS by boosting its sales and investments in Europe to increase profits. Furthermore, international trade agreements are another opportunity for the company to facilitate healthy development of the macro-environment, contributing to a rise in worldwide revenues. However, it is a threat to MS as foreign rivals can be more competitive and innovative in developed countries like the United States. Based on the analysis, the political components offer a significant range of opportunities to run the business.
Economic factors cover the various features of the financial situation with their influence on the company. Microsoft avails from the fiscal firmness in the advanced countries, forecasting reliable performance in these markets. Moreover, the total global climb in the disposable income of the middle class provides opportunities for higher sales figures. Sociocultural factors consider how social conditions and circumstances sway the macro-environment with regard to consumers’ needs and expectations. Gaming products of MS is an example of an opportunity where Xbox is an unwavering choice to spend spare time. For that reason, the company heavily invests in upgrading game goods, satisfying customers’ preferences. Technological aspects of the analysis are connected to modernization in the industry and within the entire economy. Microsoft Corporation can improve its efficiency through its smartphones’ innovation, rapidly adjusting to ever-changing patterns in demand for mobile devices. Nevertheless, the factor can be a potential threat of fierce competition against MS since existing firms already actively exploit such a possibility. Thereby, the company has a number of opportunities to grow in a productive direction, together with some threats jeopardizing its performance.
The SWOT analysis is an instrument for evaluation and appraisal of strengths and weaknesses as internal factors and the threats and opportunities as external factors. MS is one of the most powerful computer software suppliers, contributing to its ability and power to lure customers into its stores. On the other hand, the products are dangerously exposed to cybercrime. The fact that the operating system (OS) is still vulnerable to various attacks is a severe defect. Gurel (2017) implies that weaknesses can “negatively affect the organizational performance” (p. 997). Given that OS is always highly demanded, the company may use it as an opportunity to enter and grow in different industries, while still being able to sell its best product. Nonetheless, the competitive environment manipulates market forces, posing a threat to the company’s progression. Accordingly, the SWOT evaluation reflects the organization’s strong position on the market, allowing it to compete and take diverse routes to expand.
Problems
One of the most considerable problems MS faces currently is that it does not manufacture its own hardware. Reliance on computer hardware producers, generating goods that function Windows OS, is fraught with serious consequences. If a lower-cost option appears, computer creators may prefer it. According to Eitzman (2019), the positive outcome of Office 365 has been counterbalanced by “significantly weaker growth in the consumer market” (p. 11). Indeed, such a trend can lead to a subsequent fall in consumption, acting as a signal to existing and prospective firms to enter the market. What is more, the OS has been reviewed as deficient under numerous hacker attacks. In comparison with its rivals, Windows is the most insecure system in the market. Hence, the main issue remains to be the absence of hardware production, putting the company in a precarious situation.
The root cause of the matter can be found in the foundation of the technological corporation. The Research and Development (R&D) sector of MS is replete with a substantial amount of funding. Despite the circumstances, allowing to invent and create without financial constraints, the organization continuously misses exploiting opportunities. To be more precise, the company failed to develop its hardware manufacture such as mobile phones and computers. This could be for the reason that MS was not able to utilize R&D sources efficiently so that to build decent goods. In addition, the backlog of the creative and innovative side of the sector played its part in the issue. Notwithstanding, the potential of becoming the number one player was also missed due to poor marketing strategies. Thus, the incompetent use of resources available contributed to the problem of hardware generation.
Alternatives
The issues can be solved using proper marketing-related strategies so that the company can increase its competitiveness and profit. The problem of computer and smartphone production can be approached via market segmentation. Current and potential customers can be categorized according to their needs and preferences. Market research can help to grasp the overall picture to meet consumer expectations. For example, Microsoft Mobile could have been more successful if the company studied consumer behavior and the current competition level more accurately. Targetting is another technique that might be used to increase sales. Office 365 can focus on the areas where the highest profit is earned and try to accommodate the desires of the customers. The advertising tactics may be oriented on the target market by presenting reasons why the specific product responds to customers’ requirements. MS can achieve this through active and thoughtful promotion akin to exhibitions and digital marketing. Consistent monitoring and evaluation of the policies may be considered as the company can assess the strategies’ performance. Accordingly, an adequate set of approaches might cure the issues.
Recommendation
Microsoft possesses the essential business characteristics to maintain its status as a leading technological corporation. The major problem of the company is the hardware production linked to defective management of resources and weak marketing tactics. Thus, a recommendation is to start with comprehensive research of the market for targeting purposes. It is also advised for the company to conduct market segmentation in the course of studying the audience. For instance, MS could define the zones with the greatest revenue proportion and put efforts in that direction. The motive behind this solution is the importance of planning before action. As Polanco-Diges and Debasa (2020) state, it is necessary to identify the advantages of particular strategy implementation since “strategies are more commonly used than others and some of them are more effective depending on the business model” (p. 220). Therefore, MS should pay attention to the market investigation in order to develop the computer hardware sector of the organization.
References
Eitzman, A. (2019). A strategic audit of Microsoft [Unpublished thesis]. University of Nebraska-Lincoln.
Gurel, E. (2017). SWOT analysis: A theoretical review. The Journal of International Social Research, 10(51), 994-1006.
Polanco-Diges, L., & Debasa, F. (2020). The use of digital marketing strategies in the sharing economy: A literature review. Journal of Spatial and Organizational Dynamics, 8(3), 217-229.