Microsoft Competitive Analysis

1543 Words 6 Pages
Microsoft, multinational technology company founded by Paul Allen and Bill Gates on April 4, 1975, changed the way people work, play, and communicate. By constantly developing and marketing computer software, hardware devices, consumer electronics and personal computers and services, Microsoft strives to deliver new opportunities, greater convenience, and enhanced value to people 's lives. This all started with the founders’ goal of “a computer on every desk and in every home.” Although Microsoft started off by developing software, it branched out to other technological and innovative areas, such as gaming and entertainment console, personal computer, cell phone, tablet, etc., as a result of parallel search for the high peak in the fitness …show more content…
First, intensity of rivalry among existing competitors for Microsoft is high, since its major competitors, Google and Apple also produce software and hardware, as well as operating system. Second, the threat of new entrants for Microsoft is low, since new company will require large amount of capital to be invested to enter the IT industry dominated by a few large companies. Third, the threat of substitute goods or services is rather low, since Microsoft’s competitors are producing different operating systems, software and hardware. Avoiding the “sameness” is the strategy that all Microsoft’s competitors adopted. Fourth, the bargaining power of buyers for Microsoft is pretty low, since the switching cost of changing the company is usually high, and users are often not willing to pay the switching costs. Fifth, the bargaining power of suppliers is also low, since Microsoft earns most of the revenue by selling software, not that many suppliers are needed. Also, Microsoft has been moving toward vertical product integration, for example, producing software and operating system for its own computer and cell phone, therefore, the bargaining power of suppliers is …show more content…
Microsoft acquired the mobile phone manufacturer, Nokia, in September 2013 for $7.2 billion. The purchase of Nokia, a multinational communications and information technology company that focused on cell phone business, marked Microsoft’s move to take a place in the smartphone market. However, since Microsoft entered the smartphone field too late, in the short run, this action might not be a good move. Within the 18,000 layoffs in 2014, the majority were from Nokia. Moreover, Microsoft’s smartphone platforms stood at 2.9% U.S. market share in August 2015, but decreased to 2.8% in November 2015 according to Comscore. The purpose of this huge purchase is to run the windows system on smart phone. The Windows 8, Microsoft’s operating system, had been featured on various mobile phones including Nokia’s Lumia device. Also, with the introduction of Windows 10, Microsoft will be able to build the universal apps for PCs, tablets, the Xbox game console and smartphones, and that will help open up the platform to a much larger developer audience. In order for Microsoft to promote its "One Windows" strategy, Microsoft should improve on its smartphone sector so it can gain profit from its vertical integration of production line that will allow larger profits and larger capabilities with each

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