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 which was a key factor in their $34.44 billion gross profit in 2005 (the first year of the Xbox 360). However over the past few years Microsoft have started to see a slip in profits, proven by the 12% fall in profits in the first 3 months of 2015. This has led to a drop in stock prices within the New York stock exchange and has led many analysts to question how a company as large as Microsoft will be able to revive their profits. Microsoft are aware that the main problem that they currently have is that costs are too high as shown by their 2015 shareholder update Microsoft state that their new business strategy is to ‘reduce overall operating costs’ thus showing Microsoft 's thinking behind why profits are reduced.
To try and discover more about the current financial capabilities of Microsoft and their current standing within the marketplace I used various technology websites. The benefit of these was that it allowed me to analyse figures that gave a view at the current financi...
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...ing 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 camera.
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