May 28, 2012
Business Analysis Part I
Microsoft is ranked 37 in the Fortune 500 list of companies (CNN, 2012). It is the world’s largest software company (Turits & Wesman, 2012), and is composed of five separate divisions: Windows, Business, Servers and Tools, Entertainment and Devices, and Online. Investors should look at how a company meets the needs of its stakeholders and perform a strength, weakness, opportunity, and threat (SWOT) analysis. By looking at how Microsoft meets the needs of its stakeholders, investors can determine if the company can sustain a positive image with everyone involved, both internally and externally. Analyzing the strengths, weaknesses, opportunities, and threats facing Microsoft allows investors to weigh the good against the bad. Internal and External Stakeholders
Microsoft’s internal stakeholders are its employees across all divisions. Its external stakeholders are hardware manufacturing partners (PC, phone, and console), game developers, investors, vendors, and users including businesses, governments, schools, and consumers. Internal Stakeholders
Microsoft’s employees want what most employees want, to work for a company that recognizes and rewards hard work, offers stability, and provides opportunities for growth. Microsoft offers competitive pay, bonuses, and stock awards to eligible employees based on individual performance (Microsoft, 2012). Microsoft also provides many onsite perks for its employees. It provides grocery delivery from Safeway, childcare services, and dinners by Wolfgang Puck (New York Times, 2006). These perks were added as an effort to improve employee morale and loyalty. Microsoft recognized the need to retain its employees, and the importance of making them happy.
Microsoft’s PC manufacturing partners want an operating system (OS) that is user friendly, well received by consumers, and will drive PC sales. Microsoft’s Windows Vista OS did little to drive PC sales (Information Week, 2007). Consumers received Vista poorly and saw it as full of bugs and a drain on system resources. The release of the Windows 7 OS caused a 40% increase of PC sales year over year in 2009 (CNN Money, 2009). Microsoft used customer surveys to find the issues with Vista and implemented these changes in Windows 7. Phone manufacturers have the same wants too. Windows Mobile was losing market share to Apple’s iPhone and Google’s Android OS. Microsoft developed the Windows Phone 7 (WP7) OS in response to the user friendliness found in its competition.
Developers and game studios design and publish games to make a profit. One way developers try to make their profit is by releasing game titles on multiple platforms, giving them more market penetration. Microsoft gives developers and publishers cash incentives to make titles exclusive to the Windows and X-Box platforms (Sterling, 2009). Although this may limit the penetration multiple platforms can achieve, the cash offsets the loss of marketing on one platform. Developers are also encouraged to make games for the X-Box because of the sheer number of users.
Vendors like Best Buy are looking to make a profit. They do this by carrying a wide selection of software and hardware to appeal to a wide customer base. Microsoft has partnered with these vendors in an effort to promote Microsoft products. This can meet the needs of the vendors if their customer base is receptive and the products meet the customer’s needs. Specifically Microsoft has launched new small business software and has provided training and discount incentives to Best Buy employees to help sales of Microsoft products (Microsoft, 2006).
Microsoft’s end users, governments, businesses, schools, and consumers, all want a system or software package that with an ease of use that will do the job needed with a minimum of problems. Microsoft created a Customer and Partner Experience CPE...