Diversification and Multidivisional Management
A company’s conceptualization of its business scope may change radically over time (Grant, 2005, p. 444). Microsoft’s goals have evolved from being simply a software supplier, to being a firm that has attempted to epitomize the new developments in seamless technology, including networking software, information services, entertainment, and more. Microsoft has diversified into a number of areas in order to mitigate market saturation, as well as to achieve market power.
Product Lines and Divisions
Microsoft’s primary product lines currently include:
* Business Software
* Operating Systems & Servers
* Development Tools
* Internet Technologies
* PC Games
* Home Productivity
* Reference Software
* Macintosh Products
* Xbox Games
* Xbox Hardware
Subsidiaries include Avanade, Microsoft Network (MSN) and MSNBC (Product and Technology Catalog, 2003 and Microsoft Company Capsule, 2003). This break-down is a far cry from Microsoft’s beginnings as nothing but a supplier of microcomputer operating software (Grant, 2005, p. 444). The diversification into the world of video games and video game consoles is particularly interesting. Xbox Development Microsoft introduced their first PC game, Age of Empires, in 1997. Because of the success of the Age of Empires series, Microsoft decided to completely enter the gaming industry in 2000, with the introduction of Xbox hardware through the acquisition of Ensemble Studios Inc. Microsoft views this as a strategic move to compete against Nintendo and Sony, and also to encourage more sales of PCs. The move into the enterprise software industry is another example of Microsoft’s diversification strategy.
Motive for Diversification
Microsoft has made a strategic move to be less dependent upon the PC, as that industry, and the industries related to it (such as desktop software) mature and eventually decline....
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