Introduction

 

       Microsoft is an
American technological multinational company founded by Bill Gates and Paul
Allen on April 4, 1975 with its headquarters in Redmond Washington. It
develops, license, produce, supports and sells computer software, personal
computer, electronics and services. Its best-known selling software products
are the Microsoft windows and its hardware products are the Xbox gaming
consoles and the Microsoft surface tablets. It is one of the largest software
maker and also the most valuable company. Both of them started
their business as a very small firm to sell applications they had created for
customers.

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Microsft first released the Microsoft windows as a graphical
MS-DOS on November 20, 1985 and released their first Microsoft office on 1990.

Operation management is an area of management which refers
to the administration of business practices concerned with planning, designing
and controlling the process of production in order to create the highest level
of efficiency.

 

Performance objectives of Microsoft

    Performance
objectives refers to the goals of operations performance. It consists of five
objectives:

         1) Quality

         2) Speed 

         3) Relatability

         4)  Flexibility &

    5)  Cost

 

1) Quality

            Qualtiy controls
involve the business working towards improving and maintaining the quality of
goods and services and can satisfy the customers for a long term

            The
quality for Microsoft products are no longer a significant issue as all of
their programs works well as they keep improving the speed, productivity and
performance of their services and helps to troubleshoots any errors the user
come across and also provide good services In order to help and satisfy their
customers

2) Speed

Speed refers to the time taken to manufacture one or more
products and the time needed to research and develop new products              

 

3)  Reliabilty

         Neely refers
to a company’s operations as dependable if the company produces and delivers
products to its customers on time and according to agreed to costs and prices.
A company also measures dependability by the product’s ability to function as
designed and as expected and to perform consistently over a reasonable amount
of time.

4)  Flexibilty

        operations are
flexible, Neely says, if the company can configure the product lines to deal
with various product requirements and if operations can adjust to new
requirements quickly. Flexibility requires that a company can produce products
of different levels of quality and with various design modifications. According
to Neely, flexibility also requires a company to adapt operations to meet new
or changing delivery schedules and production volumes

5) Cost

       Costs
performance objectives refer to the variation in unit cost due to changes in
the volume a manufacturer produces and the variety of products produced,
according to the authors of “Operations Management.” In most cases, the
higher the variety of products produced, the lower the volume produced and the
higher the unit cost, and vice versa. Equally important, the cost of each
product will vary, which affects the product prices, running costs and profits

 

 

 

 

Swot Analysis ( Internal and external factors)

        Swot Analysis
is a study or a strategic planning tool used by the company in order to find
out the internal and external weakness, strength, opportunities and threat of
the company.

     Strength:

          Microsoft’s
biggest strength are the Microsoft Windows software which is being used in over
90% of the Personal Computers and its other Microsoft office suite programs.

The company has also constantly beat annalistic expectations
in terms of revenues and profitability.

Microsoft has a policy of internal promotion. Microsoft’s
managers have been working with the company for many years and have a clear
understanding of company’s vision and values. These manager’s have been
successful in the company’s unique work environment by using available
resources and facing external challenges, thus they are proven administrators
and leaders and experts in the segments Microsoft operates in

 

 

 

 

Weakness:

        The Microsoft Operating system has
dominated the market in 80’s and the 90’s, However, Microsoft has not been able
to bring a new product in the market in the last decade that dominated the
market place. The main weakness of Microsoft was that they failed in the
emergence of the internet as they have not anticipated the rise of internet as
a phenomenon as the Microsoft internet explorer were slower to responds which
gave rise to other internet browser such as google chrome.

Microsoft has also missed the wave in line of smart phones
as the Late Steve Jobs and his Apple Company has completely blindsided
Microsoft so much that Microsoft has failed in coming up compelling smart phone
devices or operating system.

 

Opportunities:

        Even though
the company may have failed to read the emergence of internet and in the line
of mobile phones, they had the opportunity to introduce the cloud-computing paradigm.

        Also in the
past Microsoft relied on periodic upgrades of windows and office to generate
revenue, Microsoft found that only a few percentage were using windows 8/8.1
operating system in their computers, so the company decided to reduce that
fragmentation by introducing the windows 10 also known as “One Windows”
strategy which was offered as a free upgrade to most mainstream windows 7 and
windows 8 users in order to unify all the PCs, tablets, smartphones into one
common Operating system. Microsoft also moved away from the periodic updates of
Microsoft office to Office 365 which is subscription based.

The company also has a huge cash in deposit which they can
use for the growth of the company

Threats:

     Microsoft threat
is that it’s very own size which is an asset which is preventing them from
being quick and nimble and seize market opportunities.

Google is and was the biggest long-term threat to the
Microsoft as Google relies on advertising revenues as it constantly launches
alternatives which are free to Microsoft paid products. The chrome OS and
google docs has a steady growth in the market which forced Microsoft to reduce
its prices.

Microsoft face threats against the distribution of pirated windows
operating system which are usually sold in parts of Asia.

 

PESTEL Analysis

     PESTEL analysis
is a tool used by  marketers to analysis
the macro-environmental factors that affects an organisation.

  PESTEL stands for
Political, Economic, Social, Technological and Legal.

In the case of Microsoft, these external factors reflect the
performance of the computer hardware and software market. Such factors
represent the issues relevant to the company’s business. Through the inclusion
of these issues determined through the PESTEL/PESTLE analysis, Microsoft can
develop suitable strategies that create business competitiveness and
resilience.

Poltical factors:

    Political factors
include government policy, political stability or instability in overseas
markets, foreign trade policy, tax policy, labour law, environmental law, trade
restrictions and so on.

company can improve its sales and marketing investments in
Europe to achieve a corresponding increase in revenues. On the other hand, the
increasing governmental support for automation presents opportunities for
Microsoft to increase its computer technology sales via governmental clients.
This external factor is significant, considering large-scale purchases involving
governmental organizations. Moreover, increasing international trade agreements
develop a remote or macro-environment that supports an increase in Microsoft’s
global sales. Through this external factor, the company benefits from easier
business deals in overseas markets. However, increasing international trade
agreements are also a threat against Microsoft. In these agreements, foreign
firms can increase their competitiveness in developed countries like the United
States. Based on this area of the PESTEL/PESTLE analysis of Microsoft
Corporation, the political factors present major opportunities to boost the
business.

Economical factors:

Economic factors have a significant impact on how an
organisation does business and also how profitable they are. Factors include –
economic growth, interest rates, exchange rates, inflation, disposable income
of consumers and businesses and so on.

Microsoft must include the following economic external
factors in strategies for the computer hardware and software business:

 

Considerable economic stability of the majority of developed
countries (opportunity)

High growth of developing countries (opportunity)

Growing middle class disposable income (opportunity)

Microsoft benefits from the considerable economic stability
of the majority of developed countries. For example, the company can expect
stable performance in these markets. Microsoft also has potential boosts in
sales revenues in high-growth developing countries. This opportunity translates
to steady growth in Microsoft’s global sales. Moreover, the economic external
factor of the overall global rise of middle class disposable income creates
opportunities for the company for higher revenues. This condition is so because
middle-class customers are among the most significant sources of revenues for
Microsoft. Thus, the company can exploit growth opportunities in its remote or
macro-environment.

 

These factors can be further broken down into
macro-economical and micro-economical factors. Macro-economical  factors deal with the management of demand in
any given economy. Governments use interest rate control, taxation policy and
government expenditure as their main mechanisms they use for this.

 

 

Social factors:

Also known as socio-cultural factors, are the areas that
involve the shared belief and attitudes of the population. These factors
include – population growth, age distribution, health consciousness, career
attitudes and so on. These factors are of particular interest as they have a
direct effect on how marketers understand customers and what drives them.

In the computer technology market, the following
sociocultural external factors influence Microsoft:

 

Stable attitudes about leisure (opportunity)

Increasing cultural diversity (opportunity & threat)

Stable demand for high quality customer service
(opportunity)

The stable attitudes about leisure present opportunities for
Microsoft to develop products that can satisfy customers’ leisure preferences.
For example, the company can increase its investment in innovating computer
gaming products for this purpose. In addition, increasing cultural diversity is
a potential threat against Microsoft in terms of product-customer mismatch in
the remote or macro-environment. For instance, customer satisfaction could
decrease as the company’s products satisfy only the biggest cultural groups.
Nonetheless, Microsoft has an opportunity to improve its goods and services to
address this issue. On the other hand, the stable demand for high quality
customer service creates opportunities for the company to improve its customer
support activities.

 

 

Technological factors:

We all know how fast the technological landscape changes and
how this impacts the way we market our products. Technological factors affect
marketing and the management thereof in three distinct ways:

 

New ways of producing goods and services

New ways of distributing goods and services

New ways of communicating with target markets

Microsoft needs to integrate the following technological
external factors in its strategies:

 

Rapid adoption of mobile technology (opportunity &
threat)

Increasing volume of online transactions (opportunity &
threat)

Increasing automation in businesses (opportunity)

Microsoft Corporation can improve its performance through
rapid innovation of its mobile devices. This opportunity is based on the rapid
adoption of and rising demand for mobile technology. However, this
technological external factor is also a threat that facilitates competition
against Microsoft. More technology firms could exploit such opportunity to
enter the market. On the other hand, the increasing volume of online
transactions provides opportunities for Microsoft to develop more products that
support secure online transaction processing. However, such increasing volume
of online transactions threatens the company in terms of a corresponding
increase of cybercrime attacks, which is one of the threats identified in
Microsoft’s SWOT Analysis. Moreover, the company has an opportunity to grow
through products that enable businesses to automate more of their processes.

 

Environment factors:

These factors have only really come to the forefront in the
last fifteen years or so. They have become important due to the increasing
scarcity of raw materials, polution targets, doing business as an ethical and
sustainable company, carbon footprint targets set by governments (this is a
good example were one factor could be classes as political and environmental at
the same time). These are just some of the issues marketers are facing within
this factor. More and more consumers are demanding that the products they buy
are sourced ethically, and if possible from a sustainable source.

Microsoft faces the following ecological external factors in
its remote or macro-environment:

 

Increasing preference for green products (opportunity)

Increasing focus on business sustainability (opportunity)

Increasing availability of recyclable materials
(opportunity)

Based on the increasing preference for green products,
Microsoft Corporation has the opportunity to enhance its sustainability
standing. For example, the company can develop more environmentally friendly
products, and increase the use of green energy in its business operations. In
relation, Microsoft’s efforts to improve its sustainability directly addresses
the opportunity based on the increasing focus of societies on business
sustainability. Also, the increasing availability of recyclable materials is an
ecological external factor that the company can use as basis for increasing the
use of recycled materials in its computer hardware and software products and
packaging

 

 

 

Legal factors:

Legal factors include – health and safety, equal
opportunities, advertising standards, consumer rights and laws, product
labelling and product safety. It is clear that companies need to know what is
and what is not legal in order to trade successfully. If an organisation trades
globally this becomes a very tricky area to get right as each country has its
own set of rules and regulations.

    In Microsoft’s
remote or macro-environment, the following legal external factors affect
strategic success:

 

Increasing electronic waste disposal regulations
(opportunity & threat)

Improving patent laws (opportunity)

Energy consumption regulations (opportunity)

Increasing electronic waste disposal regulations are an
opportunity for Microsoft Corporation to implement more effective recycling and
disposal programs that improve brand image. However, this legal external factor
is also a threat that could impose additional challenges for the company in addressing
the environmental impact of its business. On the other hand, the improving
patent laws facilitate Microsoft’s global growth by gradually reducing issues,
such as computer software piracy. The company also has an opportunity to
enhance its products to help client organizations reduce their consumption of
energy through more energy-efficient computing technologies.