Module Code: PM018
Class/Group: Group 50
Module Title: The Theory and Practice of Strategy Management
Assessment Title: Report
Assignment Title: The Sustainability Strategy of Microsoft Corporation
Tutor Name: John Burns
Student ID Number: 201011411
Date of Submission: Friday, 9th May, 2014
Word count of your essay: 2393
This report is going to present the situation of Microsoft Corporation’s sustainability strategy. At the beginning, the history of and the strategic change will be shown briefly by the introduction. Then the theories, such as SWOT and Porter’s Five Forces, will be used to analysis whether the change of the strategy and ...view middle of the document...
Microsoft Corporation is the largest software maker in the world ("Global Software Top 100 - Edition 2011", 2011) and a member of the world’s most valuable companies (Ycharts, 2012). Now Microsoft Corporation owns over 94,000 employees and sets up division in over 60 countries.
Originally founded for developing and selling BASIC interpreters for the Altair 8800 by Bill Gates and Paul Allen on April 4, 1975, Microsoft started to dominate the home computer operating system market by pushing out MS-DOS in the mid-1980s, followed by the Windows line of operating systems. After that, its products have generally existed in the desktop computer market. As of 2013, Microsoft dominants market in both the IBM PC-compatible operating system and office software suite markets. Microsoft possesses footholds in other markets, with assets such as the MSN Internet portal, the MSNBC cable television network and the Microsoft Encarta multimedia encyclopedia, and is active in other areas including the video game industry (with the Xbox, Xbox 360 and Xbox One consoles) and mobile phones (via the Windows Phone OS)( “Microsoft Corporation Annual Report 2005”, 2005).
Brand loyalty. For many years, Microsoft has been a leader of OS and software provider in the world, with more than 90% market share for PC OS (“Investor Relations”, 2013). These conditions result in a current situation that few other brands are competent to compete with Microsoft in this area.
Brand reputation. As an international corporation, Microsoft’s brand (valued at $ 57.8 billion) has occupied the 5th position of most valuable brand in the world (“Interbrand”, 2013). Excellent brand reputation makes Microsoft own higher sales and greater market share.
Strong distribution channels. Microsoft cooperates with nearly all the major computer hardware producers (Lenovo, Dell, Toshiba and Samsung) and major computer retailers (“Investor Relations”, 2013). These companies own a large market share in IT trade logistics all over the world and it allows Microsoft to make sure computers would be sold with already pre-installed Windows software. Microsoft also invested in other major companies such as Dell and Nokia to set foot in non-PC industries (“Investor Relations”, 2013).
Robust financial performance. Microsoft’s revenues had grown by 20% during 2008 and 2012 and held over $63 billion that can be used for acquisitions and substantial investments into research and development (see Table 1).
Easy to use software. Windows OS and Office software products are so popular that everyone who uses computer knows how to operate it because Microsoft’s products are of great quality and really easy to use. Even in many countries’ primary school, learning how to operate Windows OS becomes a required course.
Table 1: Microsoft’s revenue comparing with Profit Tendency during 2008 and 2012 (blue: revenue, red: profit tendency)
(Microsoft’s Historical data, 2014,...