Business Marketing - the case of Microsoft

Table of Content

1. INTRODUCTION

2. COMPANY OVERVIEW
Situation Analysis
Operating Segments
1. Client
2. Microsoft Business Division
3. Entertainment and Devices Division
4. Server and Tools
5. Online Services Business
Comparison of the Business Units
SWOT

3. COMPETITOR ANALYSIS
Red Hat
Google
Yahoo
Oracle
Apple
Sony : Xbox vs. Playstation
Competitive Strategies

4. MARKETING STRATEGY
Go-To-Market (GTM) Strategies

5. PROBLEM STATEMENT

6. STRATEGIC ALTERNATIVES
Open Source Strategy
Home Concept

7. SUMMARY AND CONCLUSION

1. INTRODUCTION

Microsoft is leading computer technology corporation in the world and Microsoft has some opportunities in the market to preserve its position such as good reputation of the brand and huge assets in terms of financial, human and technology; however they have many strong rivals against their units. This paper aims to identify the problems and challenges which are faced by the Microsoft Corporation; and to describe the most appropriate strategy which responds the indicated challenges.

Both quantitative data and qualitative data are the main sources that I am going to utilize in order to reach to the result. The main objectives are to indicate the rivals of Microsoft Corporation and analyze their competitive strategies, and to describe what Microsoft can offer to their customers as the new technologies as an alternative.

2. COMPANY OVERVIEW

Microsoft is known with their software products; Microsoft Windows operating system and the Microsoft office applications, but they have also entered into hardware with consumer products such as the Zune and Xbox^[1].

Situation Analysis

Microsoft serves individual customers, SMEs, large organizations, government institutions. Company has an online store which is available on https://emea.microsoftstore.com/de/. Microsoft has extended its portfolio by many acquisitions since 2005. Their product visions deal with applications, advertising, office and search by acquired thirty-five companies. Four of these acquisitions are considered as big deals: (search), Aquantive (advertising), Spring Source (applications) and - 1.6% of Facebook shares (social media)^[2].

Operating Segments

1. Client

The core product of this division is Windows operating system, whose current version is Windows Vista. And Microsoft has recently announced that they will put the newest version, Windows 7 into the market soon, which is believed to get better reception than Vista. The shares of 80% of the operating systems are distributed by Original Equipment Manufacturer^[3].

2. Microsoft Business Division

The main product of business division is Microsoft Office and Microsoft Dynamics. Microsoft provides Microsoft Office for Mac PCs and a web version called Microsoft Office Live Workspace which enables to save the documents to the web and access from everywhere. Microsoft Dynamics is a solution for business processes which reports the required data to make the right decision for supply chain, customer relationship and financial management.

3. Entertainment and Devices Division

Entertainment and Devices Division consists of game console Xbox and MSN Games (recently its name changed as Zone). Microsoft entered game console market in 2001. The main competitor of Xbox is Nintendo Wii and Sony Playstation. The games sold for Xbox is developed by game studios like Sega, Epic Games Inc., Infinity Ward. MSN Games (Zone) is a service which offers free online games especially attractive for children. Besides that, Microsoft offers a Windows version for smartphones called Windows Mobile whose main competitor is Symbian with a higher penetration (more than 250 millions shipments during 10 years of existance.^[4] ) The third main product of this division is the mp3-player Zune, whose main-competitior is Apple's I-Pod.

4. Server and Tools

This division is about the Windows Server Systems whose core products are Windows Server 2003 - an operating system for network servers, .NET - a software development tool, Microsoft SQL Server - a database management system and Windows Azuer^[5]. Windows Azure is Microsoft's new cloud computing platform, which allows computers to be managed remotely in data centers. It is based on and works with familiar Microsoft technology. Windows Azure supports Microsoft Web technologies such as ASP.NET, IIS, and Visual Studio 2008, so developers can use their existing skills to create, test and manage web services. The biggest competitor of Windows Azure is Amazon Web Services (http://aws.amazon.com). Within this business division; SQL Server, Windows Server and Xbox game console have the most increasing demands.

5. Online Services Business

This division consists of an online advertising platform with offerings for publishers and advertisers. The other products in this division are Online messaging service Windows Live Messenger, mail service MSN Hotmail, TV station MSNBC, multimedia encyclopaedia Microsoft Encarta and the search engine Microsoft Live Search ^[6] .

Comparison of the Business Units

The following chart shows the financial results of the five Microsoft business units in Fiscal Year 2008 in billion US$.^[7]

illustration not visible in this excerpt

The view on the financial results shows, that the divisions operating in Microsoft's core business are highly profitable. Business divisions like Entertainment & Devices or Online Service Business are not or just to a really low extend profitable, but operating in fast growing markets. Therefore the new strategy has to focus on investing in these areas.

illustration not visible in this excerpt

3. COMPETITOR ANALYSIS Red Hat

It is a successful company with Linux, the open source computer operating system, which is the main competitor of Microsoft's Windows-based-products, also provides products on database, content, collaboration management applications, software development tools, and services like consulting, custom software development, support and training. With the rise of the Linux's popularity, Red Hat focuses on corporate customers. It tries to improve and support Enterprise Linux products. Also Red Hat focused on governmental sector and establishes a unit to serve it^[8].

Google

It is the most successful search engine worldwide and an innovative software company which provides successful free programs as Toolbar, Desktop Search, Gmail, Froogle, free photo-sharing software, Picasa, instant messaging program, Google Talk, and online information services like Google Map in order to connect the customer's desktop and the Internet.

http://www.redhat.com/about/presscenter/2005/press_govbiz.html

[...]

^[1] http://www.crunchbase.com/company/microsoft

^[2] Microsoft's main business interests during the last 3 years, http://www.trendsactions.com/?p=253

^[3] Microsoft Annual Report 2008

^[4] Symbian OS, http://www.symbian.com/about/index.asp

^[5] Microsoft Annual Report 2008

^[6] Microsoft Annual Report 2008

^[7] Microsoft Annual Report 2008

^[8] http://www.redhat.com/about/presscenter/2005/press_govbiz.html