Presenters Name: Matric

Siti Zafirah binti Khairudin (BoA) 4133004741

Ezzatul Alwani binti Mohamad Kashim(BoA) 4134009081
Nadiah binti Razali (BHRM) 4144007851
Farah Afieza Mohd Jefri (BHRM) 4152001471
Nur Saidinatul Qasidah binti Suhaimi (BHRM) 4144010811
Nurfatiha binti Saad (BHRM) 4143001811
Lecturer Name: MOHD SALEH ABBAS
 CH 1 CONTENTS
Introduction CH4
Implementation at
the Strategy
CH 2
Industry Analysis
CH5
Strategy Review
and Evaluation
CH3
Matrix
CH6
Conclusions
 CHAPTER 1
Introduction
Vision And Mission
Organizational Chart
History
 INTRODUCTION
Microsoft is the world largest company in personal computer
software development and other relative areas which was
found by Bill Gates and Paul Allen in April 4,1975
Microsoft is listed in the Fortune 100
Microsoft Corporation is an American multinational software
corporation headquartered in Redmond, Washington that
develops, manufactures, licenses, and supports a wide range
of products and services related to computing
Had record revenues of $73billion in fiscal year 2012 that
ended on June 30,2012
Fiscal year April 2013 were outstanding with is Business
Division revenues up 8% to $6.32billion and its Entertainment
and Devices segment revenues up 56% to $2.53billion
INTRODUCTION cont.
VISION MISSION
At Microsoft,
our mission and
values are to
By a Harvard
help people and
drop-out, to
businesses
see a PC on
throughout the
every desktop
world realize
their full
potential
 NEW VISION

To be the most efficient and useful computer

and software company that help people in
United States and throughout the world.
 NEW MISSION
Microsoft Corporation mission is to become the (2) largest computer and
software industry in (3) United States and throughout the world for (1)
international and domestic travelers. (6)We believe by offering the unique
competitive advantage product (4) utilize in consistent with the modern
technology, (7) Microsoft Corporation will provide the usefulness of computer
and software that help people and businesses to meets their customers,
shareholders and employees needs through (5) sustainable profits while also
providing a (9) safe and productive working environment. Furthermore,
Microsoft Corporation also help our (8) customer with our efficient,
environmentally, potential as well as useful product for them to achieve their
objectives.

1.Customers
2.Products or services
3. Markets
4. Technology
5. Concerns for survival, growth, and profitability
6. Philosophy
7. Self-concept
8.Concern for public image
9. Concern for employees
ORGANIZATIONAL CHART
 Microsoft is founded by Bill Gates and Paul Allen,
they sell BASIC, the first PC computer language
1975 program to MITS Computer, Microsoft's first
customer.

Microsoft, Inc. is incorporated, IBM uses Microsoft's 16-

1981 bit operating system for its first personal computer.

Paul Allen resigns as executive vice-president but

remains on the board, Jon Shirley is made president of
1983 Microsoft (he later becomes CEO), Microsoft introduces
the Microsoft Mouse and Word for MS-DOS 1.00.

Microsoft and IBM forge a joint development

agreement. They launch Windows 1.0 ( first window
1985 based OS) and after that in 1986 Bill gates become
youngest billionaire at the age of just 31.

Microsoft co-develop SQL server 1.0.

1989
 Jon Shirley retires as president and CEO, Michael R.
Hallman is promoted in Shirley's place; the company
1990 becomes the first PC software firm to surpass $1 billion
of sales in a single year.

1992 The company introduces Windows 3.1. Windows now

has over 25 million licensed users.

In this year Microsoft released Windows NT

1994
In, 1995 Microsoft launch windows 95 and sell 1
1995 million copies in 4 days.

The Justice Department alleges that Microsoft violated

1997 a 1994 consent decree concerning licensing the
Windows operating system to computer manufacturers

The U.S. Department of Justice files two antitrust cases

against Microsoft, alleging the company had 1998
CONTD 1998 violated the Sherman Act.
 First beta of .NET framework released
2000
Microsoft Windows XP is released internationally. In 2002,
2001 Great plain software is acquired by Microsoft.

Microsoft launches Windows Server.

2003
Microsoft announces a five-country pilot program for
Windows XP Starter Edition, a low-cost introduction to
2004 Windows XP designed for first-time desktop PC users in
developing technology markets.

MSN launches a new Search service, available in 25

markets and 10 languages. The new MSN Search
2005 service delivers results of greater relevance, instant
answers to specific questions, and a collection of tools
that give Internet users greater control in targeting and
refining searches.

CONTD 2007 Windows Vista was released to consumers along with a new
version of its Office suite, called Microsoft Office 2007
 Bill gates leaves Microsoft to pursue charity
2008 work.

In this year Microsoft released windows 7.

2009 Beats all previous records of sales.

For the first time, Apple comes close to

Microsoft and becoming the most valuable
2010 technology company in America.

Microsoft launch windows 8 ( for all people ),

2012 NET framework 4.5, Internet Explorer 10 etc.

Windows 8.1 was released to consumers

CONTD
2013 along with Office 2013.
 CHAPTER 2
Situation Analysis (SWOT Analysis)
Industry And Competition
Analysis (Five Forces Analysis)
Macro-Environmental Analysis
(PEST Model)
 SITUATION ANALYSIS
The situation analysis will be taken in by the SWOT analysis,
under which the strengths, weaknesses , opportunities and
threats will be outlined and analyzed.
STRENGTH WEAKNESSES
1) BRAND LOYALTY & REPUTATION 1) BAD INVESTMENT DECISIONS
2) EASY TO USE SOFTWARE 2) DEPENDENCE ON HARDWARE
3) STRONG FINANCIAL SURPLUS MANUFACTURERS
4) ACQUISITION OF SKYPE 3) PC MARKET HAS MATURED
5) TIE UPS WITH HARDWARE 4) SLOW IN INNOVATION
MANUFACTURERS 5) ACQUISITION OF NOKIA
OPPORTUNITIES THRETS
1) CLOUD BASED SERVICES 1) INTENSE COMPETITION IN SOFTWARE
2) MOBILE ADVERTISING PRODUCT
3) MOBILE DEVICE INDUSTRY 2) CHANGING CONSUMER HABITS
4) GROWTH THROUGH ACQUISITIONS 3) OPEN SOURCE PROJECTS
4) POTENTIAL LAWSUITS
 STRENGTHS
Brand loyalty & reputation. Over the years, Microsoft has been the leading OS
and software provider, which resulted in more than 90% market share for PC OS.
Few other brands are capable to compete with Microsoft for this reason.
Easy to use software. Microsoft products including its flagship Windows
operating system are popular among the masses because of great quality and
many decades of experience that Microsoft has put into its development.
Strong Financial surplus. Microsoft grew its revenues by 20% from 2008 to 2012
and holds more than $63 billion of cash and cash equivalents that can be used
for acquisitions and substantial investments into R&D.
Acquisition of Skype. With nearly 300 million users, Skype is a significant boost
to Microsofts online presence and have a lot of potential in generating income
from online advertising.
Tie ups with Hardware manufacturers. The company works with all the major
computer hardware producers like Dell and Samsung and major computer
retailers to make sure computers would be sold with already pre-installed
Windows software. The company also invested in Dell and Nokia to tighten its
relationships with these companies.
 WEAKNESSES
Bad Investment Decisions. Many of Microsofts acquisitions were not
successful. Massive, Link Exchange, WebTV, Danger are just few examples of
multimillion acquisitions made by Microsoft but soon shut down or divested.
Dependence on hardware manufacturers. Microsoft is a giant software
corporation but it does not produce its own hardware and depends on
computer hardware manufacturers to develop products that run Windows OS.
PC market has matured. Only recently has Microsoft entered the mobile
technology sector and still heavily depends on its OS and software sale for
standalone and laptop computers.
Slow in Innovation. Microsoft has huge R&D resources and great position to
enter new markets with innovative products but constantly failed to do so. It
had an opportunity to be the first player in online advertising but missed the
opportunity.
Acquisition of Nokia. With nearly 18,000 layoffs planned in FY 2014, 12,500 of
which will be from Nokia division, there are speculations that Acquisition of
Nokia has been a bad move for Microsoft in the short term leading to a drop in
share prices. The company is expected to recover the costs by 2016.
 OPPORTUNITIES
Cloud based services. Microsoft could expand its range of cloud services and
software as the demand for cloud-based services is expanding.
Mobile advertising. Mobile advertising markets are expected to grow in double
digits over the next few years and Microsoft has a great opportunity to tap into
these markets with its mobile OS.
Mobile device industry. Smartphones and tablets markets will grow steadily
over the next few years and Microsoft could exploit this opportunity by
introducing more of its own tablets and a new company phone.
Growth through acquisitions. With a huge reserve of cash Microsoft could start
acquiring new startups that would bring new technology, skills and competences
to the business.
 THREATS
Intense competition in software products. Microsoft is more than ever on the
pressure to introduce successful OS both in PC and mobile markets as such
competitors like Google and Apple have already established positions.
Changing consumer habits. Customers shift from buying laptops and standalone
PCs to buying smartphones and tablets, the markets, where Microsoft has only a
modest market share and may never establish itself.
Open source projects. Open source projects are free and so they can become an
alternative to expensive Microsofts products. Some of them became quite
successful, such as new Linux OS and Open Source Office.
Potential lawsuits. Lawsuits are expensive as they require time and money. As
Microsoft continues to operate more or less the same way, there is high
probability for more expensive lawsuits to come.
 INDUSTRY AND COMPETITION ANALYSIS
In the industry and competition analysis, the five force analysis as
well as key competitions would be analyzed.
 INDUSTRY RIVALRY: HIGH
Concentration of competitors: High. Several large multinational vendors and a
handful of smaller localized firms compete in the enterprise software industry

Diversity of competitors: High. Many of the companies have very specific skill
sets that concentrate on segments of the industry while a few have very general
skills that apply across the board. Since the edges of the industry are not clearly
defined, several of the larger companies not only produce and consult on
hardware and software, but also manufacture operating systems, general
computer software, and development platforms.
Product differentiation: High. Enterprise software applications can be tied
together in a myriad of ways and run of various platforms. The products are
differentiated by being focused on different size enterprises, levels of
customizability, and varying deployment and development times.
Price differentiation: High. The boundaries of the industry are blurred and
companies tend to vary their pricing schemes depending on the total number of
licenses purchased. Prices vary depending on the size of the client, the clients
systems, the types of software required, the amount of consulting required, the
amount of training required, and the amount of technical support required.
 THREAT OF NEW ENTRANTS: LOW
Cost of entry: High. The cost to design and develop enterprise software is
extremely high due to the large amount of time it takes to do so successfully and
the limited availability of people who possess the required proprietary
knowledge.

Economies of scale: High. The companies within the industry have already
achieved economies of scale, thereby reducing the potential profit that a new
entrant could obtain.

Brand loyalty: High. There is considerable product differentiation within the

industry. The major companies have very strong brand names and tend to
invoke strong customer loyalty.

Proprietary knowledge: High. Proprietary knowledge and existing intellectual

property are important components of competing in this industry, which inhibits
new entrants. If a new company were to attempt to enter, the major players
would most likely react immediately.
 THREAT OF SUBSTITUTES: LOW
Brand loyalty: High. The old way of maintaining and sharing company
information was manual paper archival systems or printed reports from
separate databases
Switching costs: High. The modern way of connecting all of a businesss
information requires enterprise software. A business could continue with
building multiple disparate systems, however, they would never be able to
achieve what an enterprise software business solution could provide.
Close relationship: High. Enterprise software is more flexible, scalable, and less
expensive than the older types of solutions. The near absence of modern
substitutes in the industry is a good sign for the companies within the industry.
 BARGAINING POWER OF SUPPLIERS: LOW
Switching cost: Low. The bargaining power of suppliers is quite minimal. The
main reason is because there are few suppliers with whom the companies must
negotiate. The fact that enterprise software applications are an intellectual and
intangible product rather than a physical product minimizes the number of
suppliers required.
 BARGAINING POWER OF BUYERS: LOW
Switching cost: High. There are extremely high switching costs from one
supplier to another, due to the high cost of the related infrastructure for these
types of systems
Buyer concentration: High. First, concentration of buyers is growing quickly;
however, they are a very diverse and non-unified group, because they all have
different backgrounds and needs. Second, more companies are deciding that
enterprise software is a necessity for their business. Therefore, they are often
willing to pay the going rate.
MICROSOFT CORPORATION
COMPETITORS
 MACRO-ENVIRONMENTAL ANALYSIS
Macro-environmental analysis will be conducted through
the PEST model, through which the Political, Economic,
Social, and Technological trends will be analyzed.

POLITICAL Anti-trust legislation regulates Microsoft

development in industries
Anti dumping policies in emerging countries making
Microsoft oversea sales affected
ECONOMIC Recent economic crisis slowed down manufacturing
of personal computers which directly causing
Microsoft software
Emerging countries piracies out of control and
extremely damage Microsoft sales
 MACRO-ENVIRONMENTAL ANALYSIS
cont.
SOCIAL Global trend of more people connected to internet
with using of Microsoft products including operating
system and Internet Explorer and etc
Demand for personal computers in Asian countries,
America and other places of the world is still having
strongly increase with increasing popularity of
portable devices as well
TECHNOLOGY New technology emerged including streaming and
cloud which are both relative with Microsoft
software
Smartphone growth application showing increasing
trend and great potentials in future
 CHAPTER 3
Type of MATRIX?
BCG Matrix
BCG MATRIX FOR MICROSOFT
CORPORATION
 BCG MATRIX for Microsoft Corporation
cont.
Question Marks I:
Sales Growth Rate = 5.4
Market Growth Position = 0.2 or 20%
Profit: 29.72%

Product Development:
It seeks increased sales by improving or
modifying present products or services.
 CHAPTER 4
Implementation at the
Strategy:
EPS/EBIT
 Earnings per share (EPS) and Earnings Before
Interest and Taxes (EBIT) DEFINITION
Earnings per share (EPS) can be defined as:
The portion of a company's profit allocated to each
outstanding share of common stock.
EPS serves as an indicator of a company's
profitability.

Earnings Before Interest and Taxes (EBIT)

A measure of a firm's profit that includes all expenses
except interest and income tax expenses.
It is the difference between operating revenues and
operating expenses.
EPS/EBIT calculation for year 2011 and 2012

= 16,978
EPS/EBIT in Graph chart
 Recommendation solution
The calculation of earnings per share in year 2011 and 2012
has affected the earnings in 2013.

As a result, although the sales revenue is increase but the

profit of the company is remain low due to the high
competitors.

Thus, the Chief Executive Officer (CEO) of Microsoft

Corporation company has decided to resign and revamp the
organizational structure.

Therefore, by applying the product development strategy

under Question Marks I, Microsoft Corporation can increase
their profitability while maintaining their sales revenue.
 How Microsoft Corporation can applied the
Product development strategy?

Based on the result on EPS/EBIT Microsoft

Corporation:
1. Should invest on the Information Technology.
2.Need to update competitive strategy, because
competitors will adapt and copy their core
competencies, so they cant be content with
their success.
 How Microsoft Corporation can applied the Product
development strategy? (cont.)

Microsoft Corporation can implement the

strategy, Product development strategy, for
example by:
1. SAP and Microsoft can make join venture to
develop new product.
2. Introduced new operating system, Windows,
a graphical extension for MS DOS to the
market.
 How Microsoft Corporation can applied the Product
development strategy? (cont.)

As a result, Microsoft Corporation should applied

the product development strategy in order:
For the company to continually develops new
software products to generate higher revenues.
For the company supports its generic strategy
through new products that address market
needs, which requires product uniqueness as a
competitive advantage.
 CHAPTER 5
Strategy review and
evaluation:
Balanced Scorecard
 Strategy review and evaluation
The Balanced Scorecard approach to strategy
evaluation aims to balance long-term with
short-term concerns, to balance financial with
nonfinancial concerns, and to balance internal
with external concerns
 Balanced Scorecard Approach To Strategy
Areas of Objectives Measure of Target Time Expectation Primary Responsibility
Customers 1.) Random Customer Survey Yearly Evaluation Caroline Green
with at Least 85% Satisfaction
1. Satisfaction (Chief People Officer)
Rate
2. Brand Identity
2.) Industry Reports
Employees 1.) Online & In Class Training Yearly Evaluation B. Kevin Turner
1. Quality and Service 2.) Employee Surveys (85%) (Chief Operations Officer)
Training through focus groups
2. Employee Satisfaction
Marketing 1.) 2% Increase per year Yearly Evaluation Tami Reller
1. Number of demand (Chief Marketing Officer)
Operations / Process 1.) Increase the number of Yearly Eric Rudder
expert in handling the
1. Advances Technology Evaluation (Chief of Technology Strategy
sophisticated machine
officer)
2. Increased competition
2.) Product development
B. Kevin Turner
through Research and
Development (R&D) increase (Chief Operations Officer)
monopoly power

Financial 1.) Year 1 20%, Year 2&3 25% Yearly Evaluation Tami Reller
per year
1. Revenues (Chief Financial Officer)
2.) Better than Main
2. Ratio Analysis
Competitors
Table 2: The use of Balanced Scorecard approach to strategy evaluation for Microsoft Corporation
 Balanced Scorecard Approach To
Strategy (cont.)
As a result, Microsoft Corporation can :
Define the accessible technology strategy.
Identify requirements.
Design, develop, and purchase technology.
Implement and train.
Maintain technology and continue learning.
 CHAPTER 6
Conclusion
Conclusion