Microsoft – International Business Strategy

Microsoft

Executive Summary

Microsoft has been one of the leaders in Information technology industry with its one of the most famous product that is its Operating System known as Windows. In this paper, we will first discuss the background of the organization, that when it started and what are its software and hardware products. Later on, in the next section, the report will describe its concept of internationalization and globalization. This has let the company to capture the market all over the world. Further, this report will describe how the organization has been successful by entering the new market with its strategies. The performance of the organization will be discussed in detail by conducting SWOT analysis. SWOT analysis of Microsoft business strategy will help in understanding that how Microsoft has been so successful to make its acceptance all over the world. The paper will discuss it with some of the examples that Microsoft did every possible thing to make it work. Microsoft has been working for a long time to make its place in the global market. The paper will also highlight why there is need to compromise its principles and strategies to achieve some of the aims. There are times that the organization has to think out of the box and then take decisions that are totally against the policy of the organization. The strategy of Microsoft that it adopts in order to make its place in a new market is also discussed in this report. The strategies of the organization are the most important thing that makes the organization move to greater heights that the organization has aimed for. The concept of globalization and internationalization will be discussed in detail with reference to the Microsoft, that how the organization has been successful in tackling different hurdles that came in its way for globalization. The culture, language and acceptance barriers have been removed in a very efficient way by Microsoft.

1.  Introduction

Started back in 4th April 1975 by Bill Gates and Paul Allen is one of the most successful software producing company of the world that the world now relies on their products and prefer their products rather than any other competitive product in the market. Microsoft is a US-based organization operating with its headquarters in Redmond best known for its bestselling software products like operating systems and other utility software and other consumer products and tablets or games. Microsoft is well known for its operating system that is Microsoft Windows and the other utility software known to almost every computer user is Microsoft Office covering some products that are mostly used by every computer operator. There are other products that are producing huge revenue for the company, however, these names are enough as far as the existence of the organization is concerned. Microsoft also produces some of the hardware products like gaming console known as Xbox and recently introduced tablet series known as Microsoft Surface (Slides, 2014). Microsoft is producing the software products that are being used in the different field according to the requirements. If we talk about the operating systems, then there are operating systems for personal computers like Windows 8, operating systems for servers like Windows Server2008 R2. On the other hand, there are also some of the software development kits that are being preferred by most of the developers; these software development kits are Microsoft Silverlight and Microsoft Visual Studio. There are also some of the live products of Microsoft that are being appreciated all around the world because of its adaptability and availability (MSDN, Globalization Step-by-Step: The World-Ready Approach to Testing, 2014). There is also news about the only live version of Microsoft Office, the user will have to pay per day of the product. The Microsoft Office suite that includes basic, MS Word, MS PowerPoint, MS Excel, MS Access and many others, this software suite is also quite revenue generating and is widely used for their performance. This is not enough, the organization is trying to produce the influence of its user experience to all the users or human beings around the world. Microsoft has also its influence in the smartphone world, where people have been using the smartphone as oxygen. Started from Microsoft Windows CE for handheld devices to Microsoft Windows 8 for smartphones, has been a long but somehow a successful journey. Microsoft knows the art to penetrate and shows its existence and its need to all kinds of users who are in one way or the other related to the use of personal computer, smartphone or any other handheld devices. Microsoft has developed its market so well despite the different cultural and regional differences in the different parts of the world, the users are like addicted to its products and are loving the user experience as well. Microsoft knows well the art of globalization and how to enter the international market and make its own place with pride and stay on top to all the competitors in the market with innovation.

2.  Microsoft SWOT Analysis

Microsoft is a corporation with revenue of US $77.58 billion and net income of US $21.68 billion. The company has been moving towards generating more and more revenue by introducing new products for its users like the Cloud services Live Office. There is a wide range of the software and hardware products that the company is selling. However, it is very important to do SWOT analysis of the company to know the strengths, weakness, threats, and opportunities for the company (Hibbert, 2014).

2.1.    Strengths

Here are some of the strengths of Microsoft:

2.1.1.   Brand Loyalty

Microsoft has been producing software products and the customers are satisfied with its products because of ease of use and other benefits. The company has got huge number of loyal customers who rely on the products and want them in future as well (Hibbert, 2014). There are also open source operating system available for free, but still Microsoft has its own customers.

2.1.2.   Brand Reputation

On the other hand, Microsoft is also a well reputed brand in the world stands at the 5th position with worth of $57.8 billion.

2.1.3.   Easy to use Software

The software products of Microsoft are always easy to use, that is why the people like to use its products and prefer it over other operating systems even if they are free.

2.2.    Weaknesses

The weaknesses of Microsoft are

2.2.1.   Dependent on Hardware Manufacturer

The biggest weakness of Microsoft is that, when it comes to the personal computers or servers, the company has to use the hardware of other manufacturers. The company only produces software products (Jurevicius, 2014).

2.2.2.   Poor acquisition and Investment

There are many acquisitions that Microsoft has shut down after short period of time. The new acquisitions made like WebTV showed new challenges to the organization.

2.2.3.   Security Flaws

Windows is the main product of Microsoft, however there have been huge security flaws in it and the company is criticized a lot for their flaws in their main product.

2.3.    Opportunities

2.3.1.   Cloud Services

Most of the companies and organization are moving towards the adoption of cloud services, in this way Microsoft has a great opportunity to develop new products for cloud services and the company has already started on this domain (Jurevicius, 2014).

2.3.2.   Mobile Advertising

As Microsoft has also introduced its operating system for smartphones as well, it can gain benefit from mobile advertisement.

2.4.    Threats

2.4.1.   Intense Competition

It is obvious that Microsoft has greater market share in the operating system, but there are other competitors as well who are introducing their operating systems as well like Google Chrome.

2.4.2.   Changing Needs of Consumers

Now a day’s people prefer to buy some smartphone or a tablet rather than carrying a laptop with them. In this way, it seems that Microsoft is quite back in this race. However its competitors like Google and Apple have captured the market.

3.  Microsoft’s Approach to Internationalization/Globalization

Internationalization is the need of every corporate organization who is ready to step into the global market and show its power and significance by taking the admiration of its customers and users. In order to understand about the Microsoft’s approach to the internationalization, it is important to understand what actually the word internationalization means.

When we talk about the computing field which is entirely related to the software products, then it means to make software products so that it is adaptable around the world with the different features like the language, however, the change in the language should not bring any difference in the engineering of the software. This is the basic tool that makes the software easily adopted worldwide. There is also another term that is related; localization. In localization, the international product is customized in a way that it should meet the requirements of the targeted market with the influence of cultural changes depicted in the software product as well.  Another reason for the success of Microsoft in Globalization is its combination of World-readiness and the concept of localization (Microsoft, 2014).

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The world readiness is considered to be the task of the developer that makes the product to be used with different cultures with the aspect of localization.  There is a number of advantages of software globalization as well (Moons, 2014). In the past, when the algorithms were different for each of the function of software products, then it was not an easy task to test the product for its readiness with different cultures and its readiness.

In the past, the number of languages supports required the number of testing for the readiness of the product. However, the product globalization has also eliminated the problem of increased staff for testing for readiness (NetMarketShare, 2014). In this way, the globalization testing is done once only when it comes to its support for different culture. The globalization of testing makes it easy to be tested on the same product as it will be supported by multiple languages. Microsoft has been successful in the adaption of the same software product for different language support so that it can be internationalized and accepted worldwide. The internationalization and localization concepts of the software products introduced by Microsoft has been one of its successful business strategies. It has also reduced the development cost of the company and the testing phase is also done very easily. It made the Microsoft to be recognized worldwide for its adaptability in the different parts of the world for the people with different languages and cultures (Microsoft, 2014). The concept of software globalization has helped Microsoft in focusing on the localization of the product because they only need to change the language support without affecting the performance of the application.

4.  Microsoft Market Entry Strategy

When it comes to the market entry, then there is not anyone who is better than the Microsoft. There have been many problems in capturing certain markets that could have generated a great revenue for the company (Microsoft, 2014). However, the mission of capturing any market did never fail when it comes to the Microsoft. The main aim of Microsoft was to acquire as many users as possible at any price. There are times as well when the company compromised its laws and regulations. However, the company has adopted tremendous market entry strategies for this purpose. Microsoft has been running its business of software products for decades and has been one of the most used operating systems being used by millions of computer users (Bhavini Desai*, 2014). Microsoft Windows operating systems are preferred by most of the computer user for its ease of user experience and its adaptability by different computer manufacturers. It is obvious that the Microsoft Windows is being one of the most used operating systems, Bill Gates also knew that China will be the biggest market of its products including the operant system and other utility software (Yunker, 2014). Windows was being used by a large number of people, however, they were using as a pirated windows without purchasing an original Windows. The reason for pirated usage of Windows was that the operant system was quite costly as compared to other operating systems available in the market, however, there was also open source operating systems. Bill Gates did not want to decrease the price of its software products and wanted to sell them at the same price it had been selling in other countries of the world. In China, you can get a pirated Windows operating system by paying very few dollars as compared to the price of the original one. Bill Gates never wanted to lose its market in China. The China officials did not agree on using the Windows as well, they thought it may leak their information as Microsoft Windows is an American based company product. Microsoft also tried to stop the use of pirated windows in China, but it failed every time. There was a need to capture this big market as well (O’Brien, 2014). Bill Gates, in order to make the Chinese Government assure that the information will not be shared with the US government, gave the source code of Windows. It was all done in order to capture the market of China. This was not the only thing that was done in order to acquire the market,  Bill Gates also offered the products at a very cheap rate as compared to the ones that are being sold all over the world.

This was the case with the personal computers only, in the recent times, when it comes to the mobile operating system, Microsoft wanted to introduce itself in the market. There has been a number of smartphones that are available in the market with Windows OS, however, they did not get any success (Slides, 2014). Microsoft then decided to capture the company who is the best suitable for this purpose and chose Nokia. The Nokia smartphones running Windows OS have been very successful as compared to any other Windows-based smartphone. Microsoft introduced its operating system in smartphones of different price ranges so that all kinds of users could enjoy their operating system.

Microsoft always looks for capturing the market so that it could show its dominance and attract people in any best possible ways. The mission of the organization does not only produce more and more revenue but also make people like their products either they are software or hardware. In the same way, when it is the age of tablets, Microsoft recently introduced its tablets that have been successful as well.

5.  Performance of Microsoft

The use of the personal computer, smartphones, and tablets is increasing day by day. If we talk about only the personal computers, then it is obvious that as the number of personal computers is increasing, the number of Microsoft Windows is also increasing at the same ratio. There is very less number of Mac OS user or other operating systems. According to statistics of 2014 the market share of Windows is 92.99%, Mac OS is 5.05% and the other operating systems is 1.07%.

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Microsoft is quite good when it comes to the performance of operating systems in personal computers. There are no other competitors who have captures market share as Microsoft has. It does not mean that Microsoft is letting this domain without any improvement. The company is also looking to dominate the market of smartphones by introducing its operating system with different mobile manufacturing companies (Jurevicius, 2014). However, in smartphones, there are other operating systems who have captured the market like Android by Google and iOS by Apple. Microsoft startup of its Windows-powered smartphones has shown its abilities to compete in the market.

5.1.    Conclusion and Recommendations

Microsoft is one of the best organization in the world that has been doing business for last 4 decades and have captured the market with its tremendous software and hardware products. The organization has been showing it exists in different parts of the world and has beaten many other companies in the competition of operating system. The company is innovative and thinks ahead of time by knowing the requirements of the customers and the advancement in the field. Microsoft has adopted the best strategies to own more and more customers and offer them with best of the services. The organization is working in hardware and smartphone domains as well. The company aims to show its capabilities in the domains of smartphones and tablets as well. Microsoft is moving to achieve the opportunities and beat its competitors. In the past times, Microsoft has been doing business with its own policies that the world has also adopted. But back in those times, there was less competition for Microsoft. However when it comes to the operating system of the personal computers, then Microsoft users are much more than any other operating systems combined. Today the trend of the users have changed and the innovations in technology have given new directions and gadgets to the users. Most of the users on the way now prefer to use their tablets. There are many tablets in the market with different operating systems like iOS and Android mostly. However, it was a good initiative by Microsoft to introduce its Windows operating systems tablets as well. There were some issues with as well, the tablets that are running Windows OS are much expensive than those running Android OS. This has let Microsoft be back in some of the other way. It is said that Microsoft is selling its Windows OS for tablets in $50. This causes an increase in the price of overall tablets. That is why users are mostly attracted towards the adoption of Android Bases tablets as they are much cheaper in price. This is a big challenge for Microsoft, and it has to be accepted as well. If this remains same, then Android-based tablets will be more as we see now around us. Microsoft should lower the price of its Windows OS for tablets so that the organizations could also produce low price tablets with Windows OS. I think the maximum amount that Microsoft should charge for its Microsoft Windows OS for tablets $15. It will surely give a rise to the sales of Windows-based tablets and compete with other tablets in the market as well.

References

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