Multinational Company: Microsoft Corporation.

Introduction: Microsoft Corporation, leading developer of software and applications for

personal computer systems. The company is also the publisher of books and multimedia
titles, manufactures its own hybrid tablet line, provides email services and sells computer
input/output devices and electronic gaming systems. It has worldwide distribution offices.
Microsoft Corporation is an American multinational, Redmond, Washington-based
technology firm. It creates, makes, licenses and maintains computer, consumer electronics,
computer and related services and sells them. The Xbox video game consoles and
Microsoft Surface's touchscreen personal computers are its flagship hardware products.
The company was the world's largest revenue software manufacturer by sales as of 2016.
Mice is ranked No. 21 in 2020 Fortune 500 by overall revenues from the biggest United
States companies.

SWOT Analysis: The SWOT Analysis is a method to recognize corporate strengths and
weaknesses (internal policy factors) and the market risks and possibilities (external strategic
factors). Such considerations stress the importance of unique product creativity, cyber
security and market diversity in Microsoft's SWOT review. The company will expand its
computer hardware and software business over a long period using these approaches.

Strengths of Microsoft:
In this market strengths or internal policy factors that contribute to growth of business are
identified. The continuing success of Microsoft is focused partly on:
1.    Dominant picture of brand
2.    Alignment of substance with favorable externalizes
3.    Good collaborations with other businesses
Microsoft's ability to dominate the market leads to close partnerships with other companies.
In this field, the strengths of the SWOT review of Microsoft demonstrate that Microsoft's
organization has a strong base to compete with other major companies in worldwide
industry. The business has a strong basis for the development of hardware tools that use
Windows OS.

Weaknesses of Microsoft:
In this market strengths or internal policy factors that slowdown the growth of business are
identified. Managers need to fix the following shortcomings in the case of Microsoft:
1.    Cyber-crime vulnerability
2.    Imitation of such goods
3.    Failure to generate dominant hardware
The Windows system, for example, remains the target of endless attacks on cybercrimes
worldwide. This is a weakness, as this decreases Microsoft's attractiveness. Cyber safety is
a product component of the rivalry between companies in the software and computer
hardware industry in this regard. On the other hand, the imitability of such goods is poor, as
the power of the Microsoft brand could be reduced. Furthermore, its product range is mainly
focused on software devices, which is weakening the company against rivals with dominant
hardware and software products on the market. In order to ensure competitiveness,
Microsoft must strengthen product functionality and enhance its hardware development
efforts based upon the strengths outlined in this field of SWOT review.
Opportunities of Microsoft:
This field in the SWOT analytical model focuses on market development possibilities or
external strategic variables. In Microsoft's technology business the following opportunities
are important:
1.    Diversification of companies
2.    Computer hardware product invention
3.    Enhanced cybercrime protection
It is largely a software business focused on Windows popularity. Microsoft Corporation The
organization has the potential to grow in this respect on the basis of diversification. For
example, through new business growth or mergers and acquisitions, Microsoft may diversify
its operations in new markets and sectors. This allows the business to benefit from other
growth forms. In order to increase hardware sales, Microsoft now promotes the creativity of
hardware technologies. In reality, the company's hardware products are less competitive
than those of other companies on the hardware market. Microsoft is also able to improve
the popularity of its products by constantly growing its security features. In the SWOT
analysis of Microsoft, prospects in this sector demonstrate the need to diversify and grow
products.

Threats of Microsoft:
In this area the challenges or external strategic factors that reduce or compromise market
are identified. The following threats against Microsoft's software company and hardware
strategies have to be addressed:
1.    Cybersecurity
2.    Pirates
3.    High economic competition
The biggest threat every IT business is facing is cybercrime. Another threat faced by these
businesses are piracy.

International Expansion (Techniques for Entering Foreign Markets):One-way Microsoft

will enter global markets and use these markets to reduce the cost of technology and
information systems is through an outsourcing strategy. In April 2010, Microsoft signed an
agreement to handle components of the global internal IT operation with an Indian
outsourcer Infosys Technologies LTD. Hopefully, this approach tries to reduce IT costs. This
deal with the Indian company calls on Infosys to take over the management of the Microsoft
IT assistance desk and to service applications and databases of the company in over 100
countries. The organization noted that this was an attempt to focus on making more
productive efforts and saving money. After speculation suggested that outsourcing methods
appear to trigger domestic layoffs of workers, Microsoft has testified of this implementation
strategy that this new contract will not affect internal resources." A senior Infosys executive
says that it will help Microsoft minimize IT service costs by "enhancing operations of
management and support."
Since 1990 when the company started the research and development center, Microsoft has
become a global pioneer in computer technology and is a leading presence in India. Since
the 1990s Microsoft has partnered closely on the creation of outsourcing operations with
Indian government and local officials. Microsoft's global portfolio has been funded in India.
Today, outsourcing in India includes the entire business chain from analysis to help in the
country as a whole. These processes recruit more than 4,000 workers and invest heavily in
local infrastructure through the "Potential Program of India Realization." Due to its
experience and expertise in the country's technology sector, Microsoft has based its
activities in India. Due to the educational history of its staff, several businesses have
outsourced their external IT operations to India. Although Microsoft does not endorse this
international expansion policy in this plan, its employees do so effectively. Speculation
suggests that the American workers will be hit very hard by this program. This policy aims to
reduce Americans' salaries and emphasize foreign talent more effectively.
One of the leading Microsoft rivals, Apple, is engaging in similar global marketing
campaigns with an outsourcing focus on cost reduction. Just this year, Economic Times
reports show that Niall O'Connor, Chief Information Officer of Apple, is in talks with several
companies in India with the goal of growing the firm's software growth, testing and internal
operations outsourcing. Infosys and Wipro, Apple's executives speak to top tiers, Infosys' is
the same business Microsoft has outsourced. In the light of traditional stereos and critiques
of outsourcing the business has tackled these concerns by launching a survey aimed at
proving Apple's wish to improve working conditions in the Apple plants.

Foreign Exchange Hedging Techniques: To increase the investment returns and to allow
portfolio diversification, Microsoft uses derivatives instruments to manage risks related to
foreign currencies, stock prices, interest rates, and loans. Their derivatives objectives
include the most successful reduction, removal and control of the economic effects of such
exposures.
Its derivative programs include strategies which both qualify for hedge accounting treatment
and are not acceptable. All the following notional quantities are measured in the equivalent
of the US dollar.

1.    Foreign Currency
Foreign currency risks are present in some forecast transactions, assets and liabilities. Day
to optimize the economic effectiveness of Microsoft hedge positions in foreign exchange
they track their foreign exchange exposures. Optional and forward deals are used for up to
three years to protect a proportion of expected foreign sales and are designated to hedge
cash-flow instruments.

2.    Equity
Subject to market price risk are securities held in their share and in other asset portfolios.
The stock price risk is regulated by some of the convertible preferred investments, options,
futures and exchange contracts that are not designated as hedging instruments relative to
large global and domestic equity indices. They can use equity derivatives, like puts, calls,
swaps and other instruments, as a means of hedging their prices risk, from time to time.

3.    Interest Rate
Securities kept within their portfolio of fixed income are subject to various interest-rate risks
depending on maturities. In order to obtain economic returns that relate to some large fixed
revenue indices, they control the average maturity of their portfolio with exchange traded
options, and future contracts and option and swap contracts, not designated as hedging
instruments.

4.    Credit
Microsoft portfolio of fixed incomes is diverse and includes mainly securities for investment.
To control credit exposures in relation to broad base indices and promote portfolio
diversification, they use credit default swap contracts not designated as hedging
instruments. They use credit default swaps because they are a cheap way to hedge
exposure to individual credit risks or credit risk categories.

5.    Commodity
They use broad commodity exposures to optimize portfolio returns and facilitate portfolio
diversification. They use swaps, futures and options contracts, not designated as hedging
tools, to build exposures to large commodity indexes. The products are imported and
processed for warehousing purposes using derivatives to provide goods as low-cost
alternative to a variety of products, including precious metals, oil and granules.
Porter's Diamond Theory Analysis: In its five-force review Microsoft Corporate tackles
strategically the problems illustrated. To understand the external factors important to the
industrial environment of an enterprise, Michael Porter created the Five Forces Analysis
model.
The following are the powers of five porter model which are explained:

1.    Competitive rivalry or competition (strong force): To be competitive, Microsoft must

compete effectively. The influence of companies on each other and related industrial
circumstances are calculated in this component of the Five Forces study. In the case of
Microsoft, there is heavy rivalry against Microsoft by the following external factors and their
intensity:
·       Moderate costs for switching (moderate force)
·       High corporate violence (strong force)
·       High business diversity (strong force)
Moderate switching costs impact Microsoft's company in a moderate way. For instance,
consumers prefer to turn to goods from other companies. Although such improvements are
not easy, Microsoft competitors' companies that update their systems may choose to use
computer hardware and software products. On the other hand, the high degree of
aggressiveness of corporations generates a powerful force that affects the market climate
significantly. The strong strength built on the great diversity of businesses must also be
taken into account by Microsoft.
2.    Bargaining power of buyers or customers (moderate force): Microsoft must
continue to please customers who are critical in deciding the success of the business. In
this element of the Five Forces study, customers or users are measured in their effect on
the computer hardware and software environment. Based upon the following external
factors and intensities, Microsoft must respond to the moderate negotiating power of its
customers:
·       Low availability of replacement (weak force)
·       Moderate costs for switching (moderate force)
·       High information quality (strong force)
The poor availability of substitutes makes it difficult to access Microsoft's successful
substitutes. For example, clients have difficulties in seeking sound and effective solutions
for non-computer networks. Microsoft and the business climate are weakly influenced by
this external factor. The moderate switching costs therefore create a significant effect on the
business of Microsoft. Owing to this strength of switching prices, consumers appear to
move from products of the business and instead to begin to use products of other
companies. The external aspect of the high quality of information often enables customers
to compare Microsoft hardware and software products to rivals with ample information.
Such material, for example, is easily accessible from online sources. Based on outside
factors, the moderate negotiating power of customer needs to become a core concern of
the Microsoft Corporation's business strategies in this component of the Five Forces study.
3.    Bargaining power of suppliers (moderate force): The Company of Microsoft relies
on terms of supply. The effect of suppliers on the computer and software industry is
represented by this element of the five Forces analysis the poor power of the negotiations of
suppliers on Microsoft Corporation remains the following external factors and their
intensities:
·       Moderate provider scale (moderate force)
·       Moderate supplier population (moderate force)
·       Moderate supply overall (moderate force)
The small size and supplier population allow Microsoft to significantly but limitedly influence
the business. Any relatively large hardware vendors, for example, could adjust prices, which
would result in a potential cost adaptation for the company. Microsoft also has a modest
overall supply of considerable but limited power. The strength of such a force could
increase if the total supply declined. Thus, the moderate bargaining power of suppliers is
seen in the Microsoft Five Forces analysis as a strategic value issue for the world of IT.
4.    Threat of substitutes or substitution (weak force): Alternatives could lower the
market share of Microsoft. In this element of the Five Forces study, the influence of
substitutes on companies and their market environments is calculated. The following
external variables and intensities place the poor replacement power on the enterprise in the
case of Microsoft:
·       Small replacement efficiency (weak force)
·       Low replacement availability (weak force)
·       Moderate costs for switching (moderate force)
Replacements such as non-online or manual-mechanical processes tend to be less efficient
than those of Microsoft's current products. This external factor undermines the substitution
hazard of the company. Global adoption of more mature technologies inhibits substitution
and further undermines the risk of substitution in Microsoft. The external factor is not
enough to dramatically boost replacement though moderate switching costs trigger
substitution. The vulnerability of a replacement threat is therefore a small problem in
Microsoft Corporation's industrial climate.
5.    Threat of new entrants or new entry (moderate force): The concentrate on the effect
of new entrants on the computer hardware and the software industry is in this field of Five
Forces research. The strength of external factors contributing to the moderate danger of
Microsoft's new entry are as follows.
·       Strong production costs for brands (weak force)
·       Moderate business costs (moderate force)
·       Moderate costs for switching (moderate force)
The high costs of creating a technology company brand weaken the impact on firms such
as Microsoft Corporation of new entrants. The moderate cost of establishing such a
company nevertheless gives new entrants significant opportunity to compete effectively in
the hardware and software markets. The moderate costs of switching often lead partly to
new entrants' potential success in competing against companies such as Microsoft. These
external factors contribute moderately to the company's future competitive interests.
Overall, that is equal to the moderate threat of Microsoft new entry. This element of the five-
force study indicates that this recent entry is a big problem affecting the industrial climate of
Microsoft.

Global Strategy: The generic strategy of Microsoft Corporation provides competitive

advantages while retaining the wide business reach of the organization. On the other hand,
market penetration is used to sustain Microsoft's success in a globally highly competitive
hardware and software market as its key growth strategy.
1.    Penetration of the market (Primary Strategy): The key tactic that Microsoft uses to
broaden its business is market penetration. This intense strategy of development means the
sale of more goods to the markets in which the company works. In its current markets in
Asia, for example, the business develops by stepping up marketing and sales. The business
effectively uses the broad-based differentiation generic strategy to draw more consumers
from various market segments through product singleness. A strategic goal is to ensure
growth by vigorous sales and marketing for Microsoft on the basis of this intense strategy.
2.    Creation of goods (Secondary Strategy): As a secondary intensive growth strategy,
Microsoft Corporation uses product development. This intense approach encourages
growth focused on new product production and sales. Microsoft is for example, actively
designing new software products for higher revenues. This intense strategy points to the
strategic target of Microsoft's product innovation development.
3.    Creation of markets (Supporting Strategy): Market development is a supporting
strategy for strong growth, with important but marginal impacts on the current success of
Microsoft. Market creation encourages entrepreneurial growth by entering new markets.
However, as these goods are now popular globally, market growth in the business is no
longer as relevant. The broad differentiation strategy enables Microsoft to apply business
creation as a strategy for intensive growth. A strategy aimed at Microsoft growth through
entry into new markets, possibly in development countries or regions, is related to that
intensive strategy.
4.    Diversifying (Supporting Strategy): Microsoft Corporation views diversification as a
growth strategy that promotes intensive growth. The business is rising through the growth of
new companies through this intensive approach. This intensive growth strategy can be
effectively implemented through the production of new products in new business projects,
which is based on the broad strategy of differentiation. A strategic goal is to promote
Microsoft's growth with mergers and purchases focused on this intensive strategy.

Forces behind This Strategy: In its five-force review Microsoft Corporate tackles
strategically the problems illustrated. To understand the external factors important to the
industrial environment of an enterprise, Michael Porter created the Five Forces Analysis
model. The determinations of consumers and suppliers are also based on these factors.
Replacements impact Microsoft in connection. Microsoft needs to consider the concerns
posed in this five-force technology review to sustain its market place as a leading
competitor.
The impacts of international factors listed in this Five Forces review must be handled by
Microsoft in a suitable way. The ability to resolve these problems strategically affects the
resilience of the organization. The five powers are explained in the five porters' model
above.
Major Challenges and Risks: The recent economic meltdown in all major economies and
companies worldwide had significant consequences. All of them is Microsoft. It is still one of
the major players on the industry even after being struck by the financial crisis.
After review of Microsoft's situation, we have come to realize some big challenges and skills
that Microsoft needs to confront those challenges, combined with strong leadership. The
following are some of the main challenges that are faced by Microsoft:
Lack of Innovation:
The inability of Microsoft to innovate was one of the major problems raised by SWOT
research. In the last 25 years, Microsoft's products have been affected in most cases by its
rivals' current products. This can be seen from the fact that UNIX influenced the Windows
operating system and used Apple in its operating systems. Likewise, Lotus and Word-
Perfect inspired Microsoft's office suite. The lack of creativity in Microsoft did not come to a
stop, and products which were identical to products already present on the market in the
following years were continued to be launched.
According to some company staff, the lack of creativity is that the company is not innovating
new products or services, but updating Screens. Our SWOT review shows however that
Microsoft with its Windows operating system has a monopoly of more than 85 per cent. "All
that Microsoft is doing right now is maintaining," according to Mike Smith who was a former
software architect in Microsoft, causing the software programmers in this business to
become increasingly dissatisfied. The programmers of Microsoft therefore only catered for
their previously established Monopolies rather than work on creative new goods and
services. This growing disappointment led many developers to leave the enterprise for
better opportunities. It's not necessary to hire the best workers and employees, but to
sustain them and optimize their skills and talents. After Steve Ballmer became CEO of
Microsoft, he added to the trust of the employees by putting greater focus on cross group
cooperation in order to promote the management of this big organization. This led however
instead of spending time developing new goods and technology, workers spent the most
time planning for the events. The workers' discontent was also attributed to cuts in their
wages and benefits in spite of the company's profits in the past.

Search engine:
In November 2009, 86% of users used google as their search engine compared to 11%
used Bing, according to Nielsen based in New York. Bing has a relatively low market share
and low profit generation relative to Microsoft Office, Windows and the server apps, which
are still very weak compared to Google but it is also important to note that Microsoft's Bing
has an enormous potential to gain ground in the search engine markets. It can also show
that Google can fight for tuff. It can help Microsoft generate much advertisement revenue.
But one can critical of the fact that it does not deliver anything important or additionally
special compared to Google's search engine, even after investing millions of dollars on
Bing. However, one expected Bing to have certain additional properties which are not
shown by the usefulness and an additional value that Google's search does not offer to
people's turn.

Explanation:
https://www.britannica.com/topic/Microsoft-Corporation
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%20a,1980s%2C%20followed%20by%20Microsoft%20Windows.
http://panmore.com/microsoft-corporation-swot-analysis-recommendations
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review/notes/derivatives/index.html
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reaching-global-markets
http://panmore.com/microsoft-corporation-generic-strategy-intensive-growth-
strategies#:~:text=Microsoft%20Corporation's%20generic%20strategy
%20creates,computer%20hardware%20and%20software%20market.
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