Microsoft Case Study

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1. INTRODUCTION

Microsoft founded in 1975 by Bill Gates. It is the largest information technology (IT) company. For the year 2005, its revenue was US$39,788 million and net income after taxes US$12,254. Nevertheless, since the early 2000s, a string of bad news had seriously undermined the future growth of Microsoft.

Personal Computer (PC) operating system and basic office are the near-monopoly software in the category. Purchase of QDOS (quick and dirty operating system) from Seattle programmer and renamed it the Microsoft Disk Operating System (MS-DOS) is the beginning of its strategic decision. Later, Microsoft introduced Windows, a graphics-based version of MS-DOS that borrowed features from its rival Apple’s Macintosh system. Drastically, Microsoft was successful leave behind this first mover company. Microsoft then developed Window NT to compete with UNIX.

As the desktop software market saturated, the bust of the dot.com, and entertainment’s trend, In November 2005, Microsoft announced its new strategy.

2. ENVIRONMENT ANALYSIS

2.1 External Environment

General environment that highly affected Microsoft is political. U.S. Justice Department filed antitrust charges in 1998, claiming that Microsoft had stifled Internet browser competition and limited consumer choice. In March 2004, the European Union (EU) fined Microsoft and ordered it to take out its media player software from European’s Window version. Microsoft already reached the settlement for the first case, but by the worst, these legal actions can cause Microsoft to be split up.

Economically, IT industries remain at the positive growth. Although the data show that IT industry rather gloomy in 2006, but analysts predicted that the industry would tak...

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... similarity. Market commonality and resource similarity are the building blocks of a Competitor Analysis.

The table below cross-references Microsoft's three divisions and the markets within which each of its competitors participates to present a picture of multimarket competition.

4. CONCLUSION

With the positive external environment that gives many opportunities rather then thread for Microsoft, the internal strength from its core competencies, Microsoft is expected to sustain the competitive advantage. The new strategy diversification strategy is very accurate to response to the current challenge. Beside from that the international strategy that has been successfully adapt from the beginning. Microsoft also continuing looking the acquisition strategy to buy other organization to strengthen it core competencies in term of getting new talent and technology.

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