Microsoft has positioned themselves in the market to gain a competitive advantage. The company explores a system lock-in strategy. ”By partnering with the hardware companies, most notably Intel, and the Applications companies like Adobe, who all must stay Windows-compatible, Microsoft locks out its competitors” (Strategic, 2015). The company’s innovative vision has allowed them to monopolize on products and services that only they can offer. Their market position has not happened by accident; the company has worked hard to gain a competitive advantage. Microsoft, in short, has worked hard to distinguish themselves in the market and to gain a competitive advantage through innovation and strategic positioning.
For Microsoft to remain competitive, it mandates a strong understanding of their external environment. “The factors that impact Microsoft’s operations include personal income, the unemployment rate, and interest rates” (Bi, Xiao, Shi, Gan & Chen, 2012). These factors influence customers and businesses ability to purchase. The global environment has allowed Microsoft to be the leader in the service industry and for world software. The growth of the sociocultural environment allows individuals to communicate through technology regardless of their geographic location. Such technology provides a competitive advantage for Microsoft’s services as a cost-efficient method to stay in touch with family and friends. The technological environment is one of the most important factors; customers want the latest and greatest offerings available to the market.
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"Microsoft – In Short".
The internal environment involves tangible and intangible resources. The substantial considerations include both financial and physical resources. Financially, Microsoft has yielded continuously significant net income, but they have also increased their cash flow. “Therefore, it owns sufficient cash reserves” (Julian, 2010). The physical resources involved Microsoft’s ability to place their operational centers strategically to serve best their vendors and for logistics. The intangible resources include reputational resources, innovative resources, and human resources. The company focuses not only on keep talented employees but also attracting new ones. The internal talent is vital for innovative advancements and to gain a competitive advantage. The reputational resource is where Microsoft builds a product that coincides with their strong brand name.
Microsoft’s business level strategy is focused on achieving excellence by expanding on their innovation. “The strategy to accomplish this is to incorporate the talents of Microsoft’s diverse workforce into their products” (Corporate Level, 2016). The company works with minorities, businesses owned by individuals with disabilities, women, and veteran-owned businesses to provide a competitive advantage for Microsoft. The company’s focus is not only on beginners in the technological world but also advanced computer products as a means to assist them in reaching their core customers. Microsoft has their challenges gaining a competitive advantage in their market, however by focusing on products that the customers most demand, they will continue to dominate their market. The smartphone and tablet industry is growing, and by shifting their focus to remain competitive in these markets, it will allow Microsoft to continue to thrive well into the future.
Microsoft has shifted their corporate strategy to allow for greater capabilities, speed, and efficiency. Steve Ballmer, the CEO introduced a new vision for what he titles ‘One Microsoft’. “This image, the company says, will help both it and its employees continue to “change the world” as technology continues to evolve” (Thomas, 2013). The company is building a new clan of devices, focusing on continuous upgrades on all product cycles. They have also reshuffled their executive staff. The company’s core value will not change; however they must continue to evolve and work together to continue to win. Microsoft is facing many new opportunities to provide the customers with an excellent experience. The company leadership must do can extraordinary job to succeed in today’s competitive world.
