- Internal Environment: Strengths and Weaknesses (SWOT)
- Corporate Structure
A corporate structure of a company refers to the arrangement and the anatomy of the 8organization and related components that facilitate its operation. The corporate structure is designed with a focus on output. The structure is utilized in maintaining its competitive advantage on the market. Sustainability is the fundamental factor driving the long-term success of the company (Fabozzi et al., 303). In this case, the structure is a reflection of the requirements of computer software and hardware business based on the market dynamics.
- How is the corporation structured at present?
- Is the decision – making authority centralized around one group or decentralized to many units?
Microsoft organizational structure is organized in such a way that it is characterized by subsections that operate independently but still report to one central command. Different structural sections like the retail centers, support and development structures form the overall geography of the corporation (Fabozzi et al., 293). It utilizes horizontally management geography that is aimed at minimizing communication interruptions. The new structure was changed in 2015 to facilitate the company growth (Phillips, 123). The structure features particular dynamics with product division being the major one, followed by global corporation groups and lastly, the geographic segments.
- Is the corporation organized on the basis of functions, projects or some combination of these?
The corporate structure of the company is organized on a combination of functions and projects. Functions are separated differently with the sole purpose being promoting an outstanding oversight of the corporations (Mello, 13). Retail, facilities, research, and the development functions are organized separately into divisions. Other functions include operations, networking and support are among the major parts of the structure of the organization. At the same time, the corporation has a horizontally delineated infrastructure of management assigned to each of these functions (Phillips, 129). As such, it is easy to facilitate communication across the departments. Further, the mode of operation enhances access to the top management of the company. The company prides itself in the way it embraces easy engagement between customer support team and the top management. In this way, loyalty is enhanced and ensures retention of employees hence reducing high turnover cases (Fabozzi et al., 273). At the same time, the situation facilitates controlling individual performance and company projects leading to enhanced success irrespective of the challenges existing on the market.
- Corporate Culture
- Is there a well-defined or emerging culture composed of shared beliefs, expectations, and values?
The corporation culture is designed in such a way that facilitates resilience and enhances the capability of the workforce towards addressing business requirements in the market dynamics for the major products of the company (Mello, 77). A corporate culture is represented traditions, values, and behaviors that employees are expected to display. The organizational culture of Microsoft is a significant tool used in ensuring innovation ability among its employees and enhancing customer satisfaction. The corporation is among the leading companies in the production of computer hardware and software. In this case, it has invested on this advantage to ensure that proper culture focused on innovation and quality production is maintained across its areas of operation (Phillips, 156). Thus, the long-term achievements for the company are driven by a competitive culture that is centered towards responding to the human resources competence.
- Is the culture consistent with the current objectives, strategies, policies and programs?
Microsoft Corporation culture is designed to align with its business condition, the situation of the industry and the internal business activities. It has characterized its culture to focus on company objectives, strategies, policies, and programs that are defined under the following categories:
- Responsiveness to consumers
- Diversity and overall inclusion
- Innovation and quality production
- Growth mindset
Beginning with accountability, the culture of the company is defined as one that values accountability. The feature entails ensuring that each employee is able to understand every action they take have consequences with regard to the context of the company (Koop, Reinder, and Esther Muris, 328). As a way of ensuring that accountability is embraced, this feature of the corporation culture is applied to every employee examination and programs for rewarding and recognizing well-performing employees are practiced (Mello, 17). Being institutionally accountable enhances the ability of the organization to create programs that help motivate its employees to comply with the rules of the organization and facilitate the achievement of the company objectives.
With regard to responsiveness to consumers, the company culture is designed to inculcate responsiveness as a way of enhancing customer satisfaction. The culture of responsiveness is imparted into the employees through training programs that induce the ability of employees to respond appropriately to customer feedback (Koop, Reinder, and Esther Muris, 348). For instance, feedback is maintained by the company feedback system where employees are allowed to get knowledge of customer tests and preferences as well as their views on certain products and services. Moreover, Microsoft trains its employees to have the good listening ability when attending to consumer feedback (Koop, Reinder, and Esther Muris, 331). As a way of ensuring that the human resources team maintains this culture, the company utilizes product support and social media tools through which information obtained is passed into the company systems and used to innovate its operations.
Diversity and overall inclusion is another significant culture that is integrated into the company operational programs. Employees are trained to embrace diversification and inclusion in all aspects of interaction (Koop, Reinder, and Esther Muris, 219). The recruitment policies of the company human resources are channeled to ensure that the objectives of cultural diversity are practiced while recruiting and assigning responsibilities to employees.
Finally, the culture of the growth mindset is imparted to the employees of the company to help facilitate the achievement of the company objectives which involves growth and development. This is based on the understanding that growth is a critical component of a business (Koop, Reinder, and Esther Muris, 253). In this case, employees are trained to acquire the abilities for identifying potential avenues and possibilities of new business opportunities and generate ideas that would help the company grow. The culture influence Microsoft with regard to resilience and growth irrespective of stiff competition within the global market.
- What is the culture’s position on environmental sustainability?
Environmentally sustainability is a central component of the Microsoft progress programs. The company culture is designed such that it ensures that its operations are committed towards uplifting important actions that address changes in climate conditions to ensure sustainability (Phillips, 263). Several steps have been undertaken with the main purpose being to manage the environment. One of the notable programs is the carbon project. The program is focused ensuring that the environment is carbon neutral. Internally, the fee is assigned to company sections producing carbon to the environment as a way of inducing an environmental sustainability culture. Through the program, employees are taught to remain responsible as a way of enhancing adequate management of the climate.
Additionally, the culture is designed to ensure that employee devises technological approaches that support other organizations, communities, and individuals to translate the world into achieving a low – carbon economy. The move began in the year 2012 and the company has so far achieved about 100 climate neutrality plants, offices, development labs and software operations (Thota, Hamsa, and Munir, 73). Sustainable culture is ensured through facilitating lean operations, being green and accountable during production. Lean is centered towards ensuring efficiency in the consumption of energy and traveling and being green is focused on making an environment that is capable of planning responsibly. Being accountable entails holding carbon producing groups responsible for their actions (Thota, Hamsa, and Munir, 73). In this way, therefore, the culture of embracing carbon neutrality and being green, accountable and lean ensures that the company operations are executed responsibly and expand sustainably.
- Corporate Resources
- What are the corporation’s current marketing objectives, strategies, policies, and programs?
Microsoft main objective is to be the leading IT Company in the manufacturing, development of licenses and provision of support service to its consumers on the products they purchase from the company. The company is the biggest and among the most recognized technology companies in the world (Thota, Hamsa, and Munir, 173). In order to achieve its objectives, its market strategies are designed uniquely so that they are consistent with the company policies, strategies, and objectives and mission. The company embraces a marketing mix approach based on its customer demographics and behavioral segmentation. In this way, the aim is to separate the market into groups with similar characteristics. The demographic approach is utilized for specific products such as the operating systems and the office-related products that are applied across every customer base (Thota, Hamsa, and Munir, 129). On the other hand, behavioral segmentation considers products such as Microsoft Windows server operating systems and the Windows Mobile Phones. The company operates a diversified component of hardware and software that varies from the operating systems to different sets of mobile production and selling.
Microsoft uses both undifferentiated and differentiated product mix to ensure that its wide product and services are appropriately served to its customers. Under the category of Windows and office products, the company customer base is usually homogeneous. In this case, the policies formulated to facilitate distribution targets the whole global market that accesses computers. Nevertheless, under the mobile products and the developer tools, the company has to segment or differentiate in accordance with the product features. Differentiation involves rebranding especially the logos as it did recently by repositioning to ensure that it becomes a value based company focused on enriching the consumer’s life globally (Thota, Hamsa, and Munir, 203). Positioning is majorly embraced in software and operating software products. The company brand has a good reputation on the market and every time a new product is launched, it succeeds.
- Are they consistent with the corporation mission, objectives, strategies, and policies and with the internal and external environment?
The market objectives, strategies, policies, and programs are well aligned with the company mission, objectives, strategies, and policies as well as its internal and external environment. The corporation focus is being the best in the production of computer hardware and software products. Its marketing strategies and programs are designed to ensure that they entice both the internal and external environment. The strategies and programs include quality management, designing good and services and enhancing processing and capacity designing. The marketing strategies entail ensuring that the products developed are profitable and the corporation sales are expanded by embracing diversification and product mix. Furthermore, quality management is embraced in the marketing program to ensure that consumers are adequately satisfied. Therefore, among other activities, the marketing process is designed to align with the company internal and external policies and objectives as well as strategies.
- How well is the corporation performing in terms of analysis of market position and marketing mix?
The marketing mix of Microsoft has been a fundamental component in enhancing its market presence. Its product is diversified without relying on a single product group or service. The main objective of the company involves providing its market with a variety of services and products that fulfill their respective needs (Robinson et al., 219). At the same time, the company endeavors to overcome stiff competition and other market challenges that restrict the movement of its products. Successful expansion has been attained through research and the development of products targeted at customer needs. Further, the corporation strives to identify customer needs before its competitors, thereby creating unending loyalty and increasing reliance of customers on the company products (Robinson et al., 238). Subsequently, different computer products have been offered on the market and they are improved constantly. Operating systems of all kinds have been developed and designed to suit the desires of the consumers and keep pace with the changing market environment. In the same way, the company has ventured into other forms of a product such as gaming in order to expand its product base (Robinson et al., 119). Several software products like X-BOX series for the gaming consoles have been developed for the group of customers to ensure that they accomplish different needs both in terms of business and enjoyment.
Notable trends of the company as a result of extensive marketing and desire to meet customer base has been exhibited in its ambitious purchase of Skype portal, among other popular products to boost its market share. The success of the company has been majorly envisaged in the software products compared to hardware products. The company excellently unbeatable operating systems such as windows and software like the Bing engine, Microsoft Visual Studio, and Office Applications, among others.
Based on the market position and marketing mix of the company, it has since received a good response on the market and managed to get a clear understanding of the growing requirements of its customers with regard to computer products. The company has since entered into new ventures and managed to access a wide variety of customers through the provision of products of a large category of consumers across its market. The company added new programs thereby enhancing its legacy especially following the introduction of the Microsoft Operating Systems known as the MS-DOS. The company contracted IBM that facilitated its ability to produce default operating systems for new designs of PCs, thereby concentrating on the production of MS Software and Windows (Robinson et al., 118). Therefore, through these trends and a strong appreciation of the market trends, Microsoft marketing analysis has enhanced its competitiveness and gained a market advantage compared to its major competitors like Google and Apple.
- What are the corporation’s current financial objectives, strategies, policies, and programs?
The company financial objectives include growing revenues above market target, report a 10% operating margin and ensure that dividends are increased annually (Robinson et al., 109). However, over the past ten years, the revenue base has been deteriorating as reported under the following figure which displays;
Figure 1: Revenue Analysis 2007 – 2016
As displayed in the figure, the company revenues have reduced significantly. Net income in the year 2015 went to negative before starting to rise again. Further, the same trend is displayed in the percentage earnings per share (EPS) which deteriorated to 2.83% as the lowest before gradually rising in 2016. A look at the profitability ratio also tends to displays a similar trend as shown in figure 2 below;
Figure 2: Profitability Ratio
Starting with the gross margin, it is evident that the performance has been deteriorating for past 10 years. The similar trend is displayed on the operating margins, profitability and EBIT ratios. The poor trend in the financial performance is attributed to increasing competition in the industry. However, this does not imply that the company is not living to its expectation. Adjustments in research and development have been made to ensure that strategies are aligned to enhance future financial performance.
- Research and Development (R&D)
- What are the corporation’s current R&D objectives, strategies, policies, and programs?
Microsoft aims at increasing expenditure in R&D purposely to enhance the development of its software products and related services. The development is done internally which allows it to sustain competitive across the market (Mello, 98). Through internal development, the company also has the freedom to make decisions with regard to enhancement and modification as the most imperative aspects. Its strategies in R&D are centered towards obtaining relevant information on time to respond to the changing needs of consumer patterns with regard to software advances. At the same time, the company policies are designed to control the proper release of new products on the market (Mello, 87). Before a new product is developed and released, the R&D department the application vendors are provided with a diversified set of resources and guiding principles for its development, testing, and training. Subsequently, product documentation is created internally to accompany vendors program on the new product.
- Are they clearly stated or merely implied from performance or budgets?
The company research and development programs, objectives, policies and strategies are clearly stated. Before they are executed, proper communication is made to relevant bodies to avoid confusion that may arise in the market (Avgerou et al., 216). Being an IT company dealing in computer and software products distributed across the world, Microsoft Corporation understands that without setting proper communication, it can adversely affect its market.
- Are they consistent with the corporation mission, objectives, strategies, and policies and with the internal and external environment?
One of the corporation’s objectives is protecting its intellectual property as much as possible against any form of unauthorized access. The company performs a wide range of intellectual investment through its research and development programs. In this case, research policies, strategies, objectives, and programs are designed to remain consistent with those endeavored by the company (Avgerou et al., 229). The company actively engages both locally and internationally in programs that enforce creation of trademarks, copyright, and trade secrets that apply to its software research and development programs. Further, its policies are designed to facilitate the easy functioning of customers by developing programs that meet their customer needs.
- What is the role of technology in the corporate performance?
Technology plays a significant role in enhancing the performance of Microsoft Corporation especially with regard to responding to the demands of the market environment. Through innovative programs, Microsoft has managed to create a sustainable development that ensures appropriate responses are made with respect to the changes in the customer needs (Sicilia, 462). Through different technological programs, the company has managed to conduct experimentation activities and evaluate the overall performance of its initiatives as well as improving performance across its operations. Furthermore, through technology, the company has managed to change its organizational structures from a decentralized form to a centralized one where communication is facilitated through competitive information technology systems. Thus, it is worth indicating that technology has been a vital component in adding ingredients in the performance of the company (Heckscher, 146). This has been enhanced through facilitating research streams that link innovation to the organization knowledge by highlighting the benefits that emerge when new knowledge is attained in the workforce.
- Is the mix of basic, applied and engineering research appropriate given the corporate mission and strategies?
Microsoft Corporation mission and strategies focus on helping every individual and organization ton to achieve more in their endeavors (Kammerlander, 287). However, based on the nature of the IT Industry, this cannot be achieved without creating new knowledge. R&D is the route through which the company manages to develop new knowledge (Boardman et al., 226). By utilizing basic, applied and engineering research, the desires of the company mission and strategies is achieved. Thus, it is worth noting that all these forms of research have been appropriate in achieving the company mission.
- Does R&D provide the company with a competitive advantage?
It is estimated that a number of revenues that Microsoft Corporation spends on R&D amount to 17.5% of its annual revenues. This is high above its competitors such as Apple that spends 9% and Sony which spends about 4%. In terms of competitiveness, Microsoft has remained outstanding on the market (Boardman et al., 222). Although is strongly tracked by Apple Inc. in terms of innovation, expenditures in R&D has ensured that the company remains ahead in the market (Boardman et al., 223). R&D enables Microsoft to develop most dynamic products, respond to customer needs adequately and enhance expansion of its market share.
- Is the corporation competent in technology transfer? Does it use concurrent engineering and cross-functional teams in product and process design?
Microsoft Corporation is the most competitive company so far with regard to technology transfer. It has designed systems where through an agreement, the affiliate and partner firms can agree to participate in the sharing program (Avgerou et al., 126). The technology sharing program is centralized and it is incorporated with other technology partners across the world. Through the program, partners can deliver quality products and offer solutions to their customer using the technologies that are provided by Microsoft (Boardman et al., 219). At the same time, the company embraces concurrent engineering as a long term strategy towards developing its hardware and software products. Concurrent engineering refers to a simultaneous engineering process where activities are run at the same time when developing and designing products (Avgerou et al., 128). Through this approach, the company manages to significantly reduce the time required to develop a particular product, thereby reducing costs and enhancing production capacity.
- What role does technological discontinuity play in the company’s product?
Discontinuous technology is a common phenomenon in the IT industry. However, it has had a positive influence on the performance of Microsoft Corporation. The increase in global competition and related advances reflected in technology have led to alteration of the environment where the company operates (Boardman et al., 227). Microsoft has tried to adapt to discontinuous technology by purchasing other firms that can add value to its ability to compete favorably. Further, through increased research and development investment, the company has successfully been developing new and advanced products that enable it to remain relevant on the market (Avgerou et al., 116). In fact, due to its highly recognized brand and technical advances, the company has been a pace setter on the market. Hence, technological discontinuity has affected it positively rather than negatively.
- Human Resources Management (HRM)
- What are the corporation’s current human resources objectives, strategies, policies, and programs?
Microsoft Corporation Human Resources department strives to ensure that its employees are given an environment where they are able to exhibit their full potential on their duties. The management of HR is also targeted to ensure that they significantly influence the company (Kammerlander, 291). Previously, the company had unorganized HR system that was not sufficiently meeting the company objectives and policies. However, the reorganization was done by introducing significant changes into the system (Boardman et al., 217). The aim of these changes was facilitating the company ability towards meeting the needs of customers that were constantly changing. Further, the company enhanced a cloud-first and mobile – first strategies as well as the extensive reorganization of its corporate structure and the cultural changes as a way of aligning the company programs with new strategies. At the same time, the company change employee management policies as a way of helping drive cultural and strategy changes in the operational system (Kammerlander, 411). This included promoting new agility and teamwork levels in its employee team. Through this, the HR was designed to acquire a leading role in the implementation and designing of new methods that would enhance delivery of the current cultural changes and new strategies.
- How well is the corporation HRM performing in terms of improving the fit between the employee and the job?
Microsoft Corporation has done an excellent job in enhancing its employee performance and job convenience. The corporation designed an HRweb Reimagined that is installed in cloud form and it is integrated with the HR portal. The aim of the program is to provide on-demand and holistic convenience anywhere. The service supports the service of HR needs globally. The employees are able to update their personal information through the HRweb using the self-service page as displayed in the figure below (Sicilia, 473). Furthermore, the information updated through the page are real-time and direct. The page can be accessed anytime and anywhere since they are in a cloud.
Figure 1: HRweb page
Accessibility of the service is necessary to ensure that all the employee activities on the job are adequately supported. The company uses a software program called Microsoft Azure that is operated in around 17 regions across the world that are composed of different data centers whose sole function is to support employee programs. In the case of failures in the system, the Azure software automatically amends or replaces the software. In this case, therefore, the functions of employees and the management are provided with sufficient tools to support their work. This enhances their performance and improves communication horizontally and vertically thereby reducing the possibility of failures in the team and friction that could lead to increased turnover.
- How well is the company managing the diversity of its workforce? What is the company’s record on human rights? Does the company monitor human resource record of its supplier and distributors?
Microsoft Corporation appreciates diversity as a tool for success in its performance. It employs staffs of all category in terms of ethnic groups, gender, and background who are well examined before they are introduced into the company. The following figures display the distribution of employee demographics in the company.
Figure 2: Gender Demographics
With regard to gender distribution, Microsoft employee team has 25.8% of women gender and 73.7% of the male gender. This implies the company does not discriminate across gender distribution in its employment. Figure 3 below displays ethnic demographics of the company’s employee team.
Figure 3: Ethnic Demographics
As displayed in the chart, all cadres of ethnic groups are appreciated in the company. The leading ethnic group is made up of the Caucasian employees who account for 58.0% of the company staffs, followed by 30.5% Asians, 5.5% Hispanics/Latinos, 3.7% African Americans and 1.5% multiracial groups. The remaining percentage is undertaken by 0.5% American Indians and 0.2% Native Hawaiian (Sicilia, 457). Thus, the company values contribution of each ethnic group and through diversity in terms culture, gender, and ethnic group, it is able to achieve its goals.
Microsoft has a positive record with regard to human rights. There has never been a report of a violation of human rights. Additionally, its distributors and suppliers are always adequately vetted before they are recruited into associating with the company (Sicilia, 513). In this way, their records are kept in the company system for future reference and background checks.
- Information Technology (IT)
Information Technology is the central component of Microsoft Corporation business. The company is a leader in the industry and endeavors to remain at the top (Sicilia, 513). In this case, it has set its strategies focused on delivering the desired services to its customers, achieved through innovation as its drive to success. The company faces strong competition almost in every sector where it is operating. As such, it has set programs that ensure it embraces a constant change to ensure that its leading status is sustained. This includes striving to be ahead of its competitors through the development of new products as a tool towards achieving loyalty of its consumers (Thota, Hamsa, and Munir, 134). The programs, strategies, policies and objectives in the area of information technology are well aligned with its main objectives, strategies, policies and programs.
- Summary of Internal Factors
The factors below are regarded as the most influential towards speedy changes in the corporation structure and the future progress of the company:
- Having a brand image that dominates in the market.
- Embracing strong alliances with other technology and non-technology firms.
- Aligning products with the positive externalities
- Possible product immutability
- Lack of computer hardware that is dominant
- Being vulnerable to cyber crime
- Diversification of workforce.
- Analysis of Strategic Factors (SWOT)
- Situation Analysis
Microsoft Corporation requires to effectively implement its strategy within its structure as a way to ensure functionality. Issues like creativity, flexibility, openness to innovation and technology use as well as communication and embracing talent among its employees should be at the top as the source of competitive advantage. In this case, several strategic factors play a significant influence, both in the current and future condition of the company. The following table analysis the most important strategic factors that should be embraced by the company as they have a direct influence on its progress.
Table 1: Analysis of Strategic Factors
|– Having a brand image that dominates in the market.
– Embracing strong alliances with other technology and non-technology firms.
– Aligning products with the positive externalities
– Software that is easy to use
– Financial performance
|– Demographics favor
– Trend to the super stores
– Cheap technology products
– Cloud-based products and services
– Growth and development through acquisitions
|– Possible product immutability
– Lack of computer hardware that is dominant
– Being vulnerable to cyber crime
– Poor investment and acquisition
– Security flaws in software products
|– Stiff competition in the software products
– Potential lawsuits
– Opening of new markets
– Development of the economy
– Increasing the regulations by governments
– New advances in technological products
– Stiff competition.
- Review of Mission and Objectives
Following a growing need to expand and remain a leading company in the IT industry, Microsoft Corporation has the well established mission and objectives. The mission and objectives are focused on helping the company shape its future (Heckscher, 131). They are the most appropriate based on the company strategic factors that have the direct influence on its performance.
- Strategic Alternatives and Recommended Strategy
- Strategic Alternatives
The corporation has required business features that can help it remain the leading players in IT industry. This includes positive externalities and a strong brand image that form major contributing factor in enhancing its market position. Hence, it is advisable that it continues to improve its brand image. At the same time, it is important to expand on its alliances as a way of improving positive externalities in addition to creating software products that consumers can use without difficulties.
- Recommended Strategy
Besides, there is the need for strategic reform as envisaged in the weaknesses and threats to the company. For instance, cybercrime, possible immutability and poor investment and acquisition strategies can have an adverse effect on the company progress (Heckscher, 119). In this regard, it is recommendable that the company develops products that are not easily imitated. Further, it should invest in security to avoid the costs emerging from the cyber crime which is likely to harm its reputation on the market. Lastly, policies about investment and acquisition should be designed to ensure there is efficiency in the use of resources for the benefit of the company.
To ensure that the above strategies are achieved, Microsoft Corporation should restructure some of its areas. In order to improve acquisition and investment ability, the company should restructure its system to simplify the corporate structure and also enhance alignment of its programs with the overall strategy (Heckscher, 113). Although the process may involve challenges especially where positions may be lost, the end result would be an overall benefit to the company progress.
VII. Synthesis of External Factors – EFAS
Table 3: Synthesis of External Factors
|– Demographics favor||0.1||4.2||0.42||Good|
|– Trend to the super stores||0.3||2.1||0.63||Good|
|– Cheap technology products||0.2||3.8||0.76||Good|
|– Cloud-based products and services||0.09||3.2||0.288||Require a lot of time|
|– Growth and development through acquisitions||0.09||3.1||0.279||Acquisition of Nokia|
|– Stiff competition in the software products||0.01||1||0.01||Well-positioned|
|– Potential lawsuits||0.04||2.1||0.084||Well-positioned|
|– Opening of new markets||0.03||1.1||0.033||Well-positioned|
|– Development of the economy||0.03||1.1||0.033||Questionable|
|– Increasing the regulations by governments||0.02||1||0.02||Well-positioned|
|– New advances in technological products||0.04||1||0.04||Questionable|
|– Stiff competition.||0.05||3.6||0.18||Questionable|
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