Exploring Profit Maximization Strategies for Microsoft

Introduction

The reason that I have chosen to do this question is that I want to discover whether there is a viable solution for a company as large as Microsoft to increase their profit margins or if Microsoft 's size prevents them from further increasing their profits. It is important to find out as if there is a clear way to increase profits it may be possible for other similar firms to also increase their profits. Since Microsoft 's establishment in April 1975 they have grown into a monopoly within the technology market, bringing huge innovation to the technology market. Successes such as the ‘Windows’ Operating system along with further inventions such as the ‘Xbox’ have allowed Microsoft to become diverse within their product portfolio

Microsoft saw this and began to develop their own company similarly , entering the tablet market in 2013. However, the problem that Microsoft have is that Apple have established a premium brand image which has attracted high loyalty from their customers, what this means is the any new product that is released is immediately demanded from their customers. Proven by the huge demand for’ Apple Watches’ after their announcement. The demand was so high that orders were stalled back to August even though it was launched in January. This lack of brand loyalty meant that when Microsoft launched their tablets consumers were much more judgemental in deciding whether to buy a ‘Surface tablet’ or not. This meant faults were scrutinised more carefully. For example the app store on Microsoft 's tablet launched on a smaller scale in comparison to what Apple were offering and this hurt sales as people had a much smaller choice, so for Microsoft to increase sales and thus profits in this market a longer development process to allow for more applications to be developed may have been beneficial. However, what Microsoft realised is that although they didn 't have the brand that Apple had built but they were going to combat this with USPs (unique selling points) for example the Lumia 1020 launched with a 41 megapixel camera to appeal to niche markets of consumers who cared more for the camera on a phone than the applications, this allowed sales to be higher for the phone in certain markets. This may be one way in which Microsoft may be able to increase profits by increasing sales of their phones by accepting that they don 't have the brand image that Apple have and instead playing to their strengths such as the higher quality