Environmental Analysis of microsoft

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Environmental Analysis
The information technology (IT) industry has always been highly driven by innovations in technology. It is dynamic and highly competitive, with frequent changes in both technologies and business models. Each industry shift is an opportunity to conceive new products, new technologies, or new ideas that can further transform the industry and businesses. The following PESTEL analysis will try to gain an understanding of Microsoft’s business potential, future market situation and the direction of its operation. The political, economic, social, technological, environmental and legal factors are six components of PESTEL analysis.
Table 1: PESTEL Analysis of IT industry |
Political * Restrictions on foreign recruitments * Regulations to education * Regulations to the industry * Regulations at emerging markets | Economic * Fluctuations and unpredictable behaviours of foreign currency * Trade cycles * Economic growth rates (around the world) * Disposable income level of people * Demand and supply conditions * Tax and import export barriers * New avenues to raise capital |
Social * Accessibility to technology to differently capable people * Social media * Shift in personal computing to mobile devices | Technological * Innovations related to IT (especially in SOA(SAAS) and innovations to operating systems * Emergence of smartphones and tablets * Cloud computing * Enterprises exploring opportunities that emerging technologies provide |
Environmental * Energy saving * Green IT | Legal * Laws on business regulation (against monopoly and forced competitor acquisitions) * Intellectual property rights * Emerging class of patent pirates * Employee working hours, and employment enrichment |
Key drivers of change
Base on the Bowman’ clock in figure 1, we can see that Microsoft business strategy is of the Hybrid nature where they compete on both differentiation and price. Microsoft differentiation bases were not always technology centered. Microsoft

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