5 Forces And Microsoft1

Topics: Operating system, Porter five forces analysis, Marketing, Video game console, Complementors, Strategic management / Pages: 2 (672 words) / Published: Jan 23rd, 2015
The Five Forces and Microsoft

Microsoft’s objectives are anything but small; as the world’s leading Software Company, Microsoft develops and markets a variety of products used both by consumers and businesses. At the core of its business Microsoft sells its Windows operating system and office application suite to PC manufacturers such as Dell, HP and countless others. Microsoft has a variety of competitors from several markets ranging from operating system and software developers to music players and video game consoles. Microsoft has also recently acquired Nokia and is grabbing a portion of the cell phone industry market share.

Microsoft’s leading competitors, multi-faceted in their own right, are Apple and Google. The rivalries between these three companies are strong and span across various industries as described in Porters 5 forces model. Apple, Google and Microsoft strive to expand their reach into other markets and this causes low levels of product differentiation. Actions by Apple and Google in the smartphone arena have baited Microsoft into competing for this market. Microsoft does not want lose its competitive edge against the other software giants and although Google and Apple have a jump on Microsoft in this endeavor, they still have a dog in the fight. “When a rival acts in a way that elicits a counter-response by other firms, rivalry intensifies. The intensity of rivalry commonly is referred to as being cutthroat, intense, moderate, or weak, based on the firms' aggressiveness in attempting to gain an advantage.” (Porter)

While fighting off the major competition Microsoft must also be aware of substitutes for its goods and services. Microsoft owns a vast majority of the operating system market; however, its other software, Video game and smartphone endeavors see a multitude of low cost alternatives for substitution. “While the threat of substitutes typically impacts an industry through price competition, there can be other concerns in

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