Porters five force analysis.

Microsoft corporation is the one of the leading firms in business software and services. Major
products of Microsoft are Windows, ms office, etc. the major competitor for Microsoft in terms of
services is Apple, Google, and oracle.

Five forces:
The threat of new entry.
Bargaining power of buyers.
The threat of substitute products.
Bargaining power of suppliers.
Rivalry among existing firms.

1.) The threat of new entry. This industry is well established because microsoft, apple,
google are trying their best from the last more than 50 years. so it will be very difficult for
a new firm to enter the same market. Because existing firms have created a brand value
for the customers and customers are brand loyal to that firm.

Major steps taken by existing firms to stop the new entry.

❖ By innovating new products and services

❖ By building economies of scale
❖ Developing dedicating suppliers

2.) Bargaining power of buyers: Buyers always demand a lot. They want the best
quality products at the minimum rate. Existing firms are trying their best to provide the
best services at the minimum price. So it is difficult for new firms to compete with the
existing firms.

3.) The threat of substitute products. When different products or firms fulfill the
customer demand then the customer has an alternative option of that one product.
For eg. Microsoft word and google docs. If the customer doesn’t have ms word then he
ahs an alternative option of google docs or libre office.
So the chances of substituting the products are very high.

4.) Bargaining power of suppliers. Most of the companies purchase their raw
materials and other products from different suppliers. So all the firms have different
suppliers. So suppliers may increase or decrease their prices as compared to their
competitors

5.) Rivalry among existing firms. If there will be a rivalry in the existing firms then
obviously then prices will go down in order to compete better then others. Microsoft
Corporation operates in a very competitive Business Software & Services industry. This
competition does take a toll on the overall long term profitability of the organization.

Microsoft is well known for its low-cost technology but if we compare Microsoft with
apple, then apple is very costly so that not everyone can afford apple. So Microsoft is a
better option for middle-class people, that why Microsoft is having the maximum number
of market share( around 70%).