FACULTY OF BUSINESS AND MANAGEMENT

RISK MANAGEMENT AND TAKAFUL

MSS 32403 STRATEGIC MANAGEMENT

GROUP 9

ASSIGNMENT 2: Microsoft Corporation Case Analysis

NO. NAME MATRIC NO.

1. NURUL IZZANI BINTI AHMAD ZAHURI 049440

2. ANISAH FITRI BINTI KASLIKAN 049674

3. NUR AZ HUMAIRAH BINTI MOHD DAUD 051147

4. SYAFIQAH ATHIRAH BINTI MAHAMAD SABERI 050455

5. NURUL SYAFIQAH BINTI AZMAN 049954

6. NUR FARHANA BINTI HARUN 050479

7. NUR FADHLIN SAKINA BINTI AZAMI 050666

8. NURUL FATIHAH BINTI ABDUL WAHAB 051185

9. SHAMILA BINTI ABDUL MAJID 054595

EXECUTIVE SUMMARY

Microsoft is a technology company founded by Bill Gates and Paul Allen on April 4, 1975 to develop
software and sell BASIC interpreters for Altair 8800. Microsoft Corporation is an American multinational
corporation headquartered in Redmond, Washington, which develops manufactures, licenses, supports
and sells computer software data, consumer electronics and personal computers and services. Its best
known software products are the Microsoft Windows line of operating systems, Microsoft Office suite,
and Internet Explorer web browser. Its flagship hardware products are the Xbox game console and the
Microsoft Surface series of tablets. It is the world's largest software maker measured by revenues. It is
also one of the world's most valuable companies.
It offers an array of services, including cloud-based solutions that provide customers with software,
services, platforms, and content, and it provides solution support and consulting services. It markets and
distributes its products and services through original equipment manufacturers, direct, and distributors
and resellers.

MISSION

Microsoft’s mission statement is “To empower every person and every organization on the planet to
achieve more.” The Microsoft mission regarding global diversity and inclusion is to create an
environment that helps Microsoft capitalize on the diversity of its people and the inclusion of ideas and
solutions to meet the needs of its increasingly global and diverse customer base.

VISION

Global diversity and inclusion is an integral and inherent part of our culture, fueling our business growth
while allowing us to attract, develop, and retain this best talent, to be more innovative in the products and
services we develop, in the way we solve problems, and in the way we serve the needs of an increasingly
global and diverse customer and partner base.

OBJECTIVE
Past Objectives :
 ● Developed a cohesive Global Diversity & Inclusion strategy linked to the company's business and
vision.
● Strengthened global perspective and integration of this diversity strategy across the company.
● Enhanced leadership engagement with the chief executive officer (CEO) and executive diversity
sponsors.
● Improved overall quality and accuracy of diversity data in the U.S. and globally.
● Increased portfolio of diversity and inclusion training tools and courses.

Current Objectives :
● Establish and preserve management accountability to Microsoft's owners by appropriately
distributing rights and responsibilities among Microsoft Board members, managers, and
shareholders.
● Provide a structure through which management and the Board set objectives and monitor
performance.
● Strengthen and safeguard our culture of business integrity and responsible business practices.
● Encourage the efficient use of resources, and to require accountability for stewardship of those
resources.

STRATEGIES

Microsoft’s Corporation Intensive Growth Strategies :

Microsoft's most intensive approach for growing its business is market penetration. This aggressive
expansion plan entails selling more products in the current marketplaces where the company operates. For
example, the corporation expands by stepping up its marketing and sales efforts in its current Asian
regions. Microsoft's global domination in the IBM PC-compatible operating system industry is due to this
aggressive expansion strategy. The corporation adopts a broad differentiation generic strategy to
efficiently penetrate the market, which relies on product distinctiveness to attract more clients from
various market sectors. Microsoft's growth will be ensured through aggressive sales and marketing,
according to a strategic target based on this intensive strategy.

Product Development (Secondary Strategy)

Product development is a secondary intensive growth strategy for Microsoft Corporation. Growth is
facilitated by this intense strategy, which is built on the development and selling of new items. Microsoft,
for example, is always developing new software products in order to increase income. The company's
generic strategy, which requires product originality as a competitive advantage, is supported by new
goods that satisfy market needs. This comprehensive plan focuses on Microsoft's strategic goal of
facilitating growth through product innovation.

Market Development (Supporting Strategy)

Market development is a supporting intense growth strategy for Microsoft that has a significant but minor
impact on the company's present performance. Market development helps a company grow by allowing it
to enter new markets. Microsoft, for example, used this intense method to sell its computer software
products outside of the United States in its early years. However, because these products are already well-
known around the world, market development is no longer as important to the company's success.
Microsoft can use market development as an intensive growth strategy thanks to the general approach of
broad differentiation. For example, the corporation first penetrated global markets using innovative
business-specific computer products. Growing Microsoft by entering new markets, most often in
developing countries or regions, is a strategic goal tied to this intensive strategy.

NEW VISION AND MISSION

Artificial intelligence is in and mohile is out

The mobile-first, cloud-first world is transforming the way individuals and organizations use and interact
with technology. Mobility is not focused on any one device; it is centered on the mobility of experiences
that, in turn, are orchestrated by the cloud. Cloud computing and storage solutions provide people and
enterprises with various capabilities to store and process their data in third-party data centers. Mobility
encompasses the rich collection of data, applications, and services that accompany our customers as they
move from setting to setting in their lives. We are transforming our businesses to enable Microsoft to lead
the direction of this digital transformation, and enable our customers and partners to thrive in this
evolving world.
EXTERNAL AUDIT
Opportunity
1. Nokia considers migrating to Windows 8 in order to boost sales.
2. The development of cloud services is still improving.
3. Technology is rapidly evolving.

Threats
1. New competitors are forming all around the world.
2. Millions of customers around the world are avoiding PCs entirely in favor of mobile devices.
3. The competitiveness of the smartphone.

Competitive Profile Matrix

According to the CPM, Microsoft's rate is 3,04. Microsoft is performing better than Google and
Oracle.
EFE Matrix

OPPORTUNITIES Weighted Rating Weighted score

Nokia considers migrating to Windows 0.10 2 0.20

8 in order to boost sales.

The development of cloud services is 0.15 1 0.15

still improving.

Technology is rapidly evolving. 0.25 1 0.25

 THREATS Weighted Rating Weighted score

New competitors are forming all around 0.20 2 0.40

the world.

Millions of customers around the world 0.10 2 0.20

are avoiding PCs entirely in favor of
mobile devices.

The competitiveness of the smartphone 0.20 2 0.40

TOTAL 1 1.60

When we look at the EFE Matrix, Microsoft's total weighted score is 1.60 and this score is a good rate.
Both O1 and O3 are major opportunities for Microsoft because weights are 0.20. For opportunities 2 and
3 are a response poorly because raiting is 1.

INTERNAL AUDIT
Strength
1. The most significant contribution comes from operating income.
2. The demand for Microsoft's surface tablet is rising.
3. The tablet market has been bursting with new products.
4. The contribution of revenue was the largest segment.
5. A stronger financial position for the business
6. Equipment manufacturers account for the majority of revenue.
7. Generates sales through advertising
8. Customers from emerging markets account for a substantial portion of their business
Weakness
1. Microsoft's management ladder has a lot of ambiguous executive positions.
2. Microsoft's Surface Tablet sales have dropped short of expectations.
3. Microsoft overcharged for the Surface.
4. Microsoft's five business segments each produced a different amount of revenue.
5. Microsoft's five segments should be named in such a way that their essence is revealed.
6. Microsoft's decision on company and division acquisitions.
7. Microsoft's acquisition goodwill has grown throughout the years.
8. Microsoft is diversified, and it competes in a variety of markets.
 9. In comparison to other firms, Microsoft has the most outstanding shares.
10. When compared to other corporations, Microsoft has the lowest Earnings Per Share (EPS).

IFE Matrix

STRENGTHS Weighted Rating Weighted

The most significant 0.07 2 0.14

contribution comes from
operating income.

The demand for Microsoft's 0.07 2 0.14

surface tablet is rising.

The tablet market has been 0.07 2 0.14

bursting with new products.

The contribution of revenue 0.08 1 0.08

was the largest segment.

A stronger financial position 0.07 1 0.07

for the business

Equipment manufacturers 0.06 1 0.06

account for the majority of
revenue.

Generates sales through 0.07 2 0.14

advertising

Customers from emerging 0.06 1 0.06

markets account for a
substantial portion of their
business.

WEAKNESSES Weighted Rating Weighted

Microsoft's management ladder 0.04 1 0.04

has a lot of ambiguous
executive positions.

Microsoft's Surface Tablet sales 0.04 2 0.08

have dropped short of
expectations.
 Microsoft overcharged for the 0.05 1 0.05
Surface.

Microsoft's five business 0.05 1 0.05

segments each produced a
different amount of revenue.

Microsoft's five segments 0.04 1 0.04

should be named in such a way
that their essence is revealed.

Microsoft's decision on 0.04 1 0.04

company and division
acquisitions

Microsoft's acquisition 0.05 2 0.10

goodwill has grown throughout
the years.

Microsoft is diversified, and it 0.05 3 0.15

competes in a variety of
markets.

In comparison to other firms, 0.04 2 0.08

Microsoft has the most
outstanding shares.

When compared to other 0.05 1 0.05

corporations, Microsoft has the
lowest Earnings Per Share
(EPS).

TOTAL 1 1,51

When we look at the IFE Matrix, Microsoft's total weighted score is 1.51 and this score is a good rate. For
opportunities, the contribution of revenue was the largest segment with the largest weight and for the
weakness it had the similar weight with 0.04 and 0.05.

SWOT
SO Strategy
1. Microsoft utilizes a market penetration strategy in BRIC regions to modify people's perceptions
about Nokia/Windows phones.
2. Microsoft engages with all of the main computer hardware vendors, including Lenovo, Dell,
Toshiba, and Samsung, as well as major computer retailers, to ensure that PCs are provided with
 pre-installed Windows software. The corporation has made investments in Dell and Nokia in
order to strengthen its ties with these companies.
3. As the need for cloud-based services grows, Microsoft may extend its offering of cloud services
and software.

WO Strategy
1. The major Microsoft product, Windows OS, has been heavily condemned for its vulnerability to
virus attacks. When compared to other operating systems, Windows is the least secure.
2. Microsoft has access to a huge market of committed customers who need to upgrade their
software on a regular basis to ensure cross-compatibility with other programmes and to replace
old hardware or software to ensure its continuous usefulness.
3. Microsoft can create a Windows Phone operating system.

ST Strategy
1. Microsoft should create Windows phone apps in order to improve the device's appeal.
2. Software that is simple to use – Microsoft is well-known for its high-tech and high-quality
products. The Windows operating system and Office software are extremely user-friendly and
meet the highest quality standards.

WT Strategy
1. Customer needs constantly shifting – The market for cell phones, notepads, and computers has a
lot of people interested in it. In these markets, Microsoft has a strong presence.
2. Overexposure to the PC market — Due to growing pricing and currency changes, PC shipments
are frequently vulnerable to rapid drops. It has put Microsoft in a precarious situation.

Boston Consulting Group (BCG) Matrix

Question Mark
Those segments that fall under the Question mark category have a low relative market share and operate
in a high-growth industry. Microsoft's phone hardware division is a question mark; the Lumia and non-
Lumia phones are among the items manufactured by Microsoft in this segment. When Android phones
debuted, the majority of Windows mobile phone users went to Android, practically obliterating Microsoft
Lumia's market share. Microsoft should employ its product development plan to enhance its market share
and make this section a star in the current circumstances.
Stars
Star segments are those that have a large market share and compete in industries with high sales growth.
Microsoft Corporation's device and consumer segment is one of the company's bright spots. The stated
area includes Windows operating systems and word processors (MS Office), mobile applications, and
Windows-related software products and services. In the D&C segment, Microsoft competes with Apple
and Google. According to the BCG matrix, market development and product development strategies are
recommended for the stars category.

Cash Cows
Microsoft's computing and gaming divisions can be classified as cash cows. Cash cows are segments that
operate in industries with low sales growth but substantial market share. Such areas are viable for
organizations to maintain a long-term financial position. Despite the fact that the Xbox One and Xbox
360 have a large market share in the gaming industry, Sony is the market leader in the video game
industry. Horizontal integration can assist the company in capturing the industry's highest market share.

Dogs
Microsoft is fortunate given that none of its segments fall into the dog category. Dogs are those segments
that compete in industries with modest sales growth and have a small relative market share. Such areas
constitute a risk for the company. For such parts, the BCG matrix suggests a liquidation method.

Grand Strategy Matrix

We can use win10 as an example of product development. Microsoft's Windows 10 is a personal
computer operating system that is part of the Windows NT family of operating systems. Expanding on
Metro-style apps, Windows 10 includes "universal apps," which may be developed to work across
numerous Microsoft product lines with essentially similar code, including PCs, tablets, smartphones,
embedded systems, Xbox One, Surface Hub, and Windows Holographic. Microsoft announced on August
26 that Windows 10 was installed on more than 75 million devices in 192 countries and on more than
90,000 different PC and tablet models.

Skype is a video chat and voice call software that has a high market development. Users can send and
receive digital documents such as photos, text, video, and other types of media, as well as text and video
messages. Video conference calls can be set up using Skype. Microsoft paid 8.5 billion dollars for the
company. Windows Phone makes its debut on the market. He initially went to Europe after the phone was
released in America and Canada. In Europe, Windows Phone has risen to third place. It was placed
available for sale in Asia and Africa, but it fell short of expectations. Microsoft's market share in Asia and
Africa must be increased.

Quantitative Strategic Planning Matrix

KEY FACTORS WEIGH AS TAS AS TAS AS TAS

T

OPPORTUNITIES

Nokia considers migrating to Windows 8 0.10 2 0.20 1 0.10 1 0.10

in order to boost sales.

The development of cloud services is 0.15 1 0.15 2 0.30 1 0.15

still improving.

Technology is rapidly evolving. 0.25 1 0.25 2 0.50 1 0.25

THREATS

New competitors are forming all around 0.20 2 0.40 1 0.20 2 0.40
the world.

Millions of customers around the world 0.10 2 0.20 2 0.20 2 0.20

are avoiding PCs entirely in favor of
mobile devices.

The competitiveness of the smartphone 0.20 2 0.40 2 0.40 1 0.20

TOTAL 1

KEY FACTORS WEIGH AS TAS AS TAS AS TAS

T

STRENGTHS

The most significant contribution comes 0.07 2 0.14 3 0.21 2 0.14

from operating income.

The demand for Microsoft's surface 0.07 2 0.14 2 0.14 3 0.21

tablet is rising.

The tablet market has been bursting with 0.07 2 0.14 3 0.21 2 0.14
new products.

The contribution of revenue was the 0.08 1 0.08 1 0.08 3 0.24

largest segment.

A stronger financial position for the 0.07 1 0.07 1 0.07 2 0.14

business

Equipment manufacturers account for 0.06 1 0.06 1 0.06 2 0.12

the majority of revenue.

Generates sales through advertising 0.07 2 0.14 1 0.07 1 0.07

Customers from emerging markets 0.06 1 0.06 1 0.06 1 0.06

account for a substantial portion of their
business.

WEAKNESSES

Microsoft's management ladder has a lot 0.04 1 0.04 1 0.04 2 0.08

of ambiguous executive positions.

Microsoft's Surface Tablet sales have 0.04 2 0.08 2 0.08 2 0.08

dropped short of expectations.

Microsoft overcharged for the Surface. 0.05 1 0.05 3 0.15 2 0.10

Microsoft's five business segments each 0.05 1 0.05 1 0.05 1 0.05

produced a different amount of revenue.

Microsoft's five segments should be 0.04 1 0.04 1 0.04 1 0.04

named in such a way that their essence is
revealed.

Microsoft's decision on company and 0.04 1 0.04 1 0.04 1 0.04

division acquisitions

Microsoft's acquisition goodwill has 0.05 2 0.10 2 0.10 2 0.10

grown throughout the years.

Microsoft is diversified, and it competes 0.05 3 0.15 1 0.05 3 0.15

in a variety of markets.

In comparison to other firms, Microsoft 0.04 2 0.08 1 0.04 1 0.04

has the most outstanding shares.

When compared to other corporations, 0.05 1 0.05 1 0.05 1 0.05

 Microsoft has the lowest Earnings Per
Share (EPS).

TOTAL 1

SUM TOTAL ATTRACTIVENESS 3.11 3.34 3.15

SCORE

RECOMMENDATIONS
1. Reducing weak investments.
- Microsoft has made so many mistakes when it comes to acquiring new businesses. It
should enhance the investment investigations and try to minimize the number of bad
buys. Microsoft has a poor track record of turning acquired companies profitable. In the
future, it should conduct more research before acquiring any company.
2. Keep improving the Windows store
- Because Windows Store does not have a good position in comparison to its competitors,
Microsoft must popularize it. Microsoft should include or create new software.
3. Surface tablet
- Microsoft's Surface tablet sales are poor, so the company's strategy should be
reconsidered. The main issue is price, and Microsoft has reduced the price of the Surface
tablet, giving Microsoft a competitive advantage.
4. Seek to generate operational systems for personal computers.
- Microsoft's operational systems are a significant source of revenue for the company, and
Microsoft tends to dominate all rivals in this section.

Microsoft Strategy
Microsoft Corporation's generic strategy for competitive advantage is broad differentiation. Broad
differentiation entails selling unique products to a diverse range of customers. In this case, Microsoft's
products are distinct in terms of features, such as software platforms designed specifically for business
organizations. Furthermore, the company's generic strategy is wide in the sense that it offers its products
to a variety of market segments.

Microsoft Operating Segment

 Segment Principle Product and Services Competition

Windows Division
The Windows operating system; The Windows operating system
the Windows Services suite of is being challenged by a variety
software and web services, of commercial software products
which includes Outlook.com and as well as substitute platforms
SkyDrive; the Surface RT and and devices, primarily from
Pro gadgets; and PC accessories. Apple and Google. Windows
Services software and
applications, such as SkyDrive
and Outlook.com, compete with
roughly comparable products &
services products from Apple,
Google, Yahoo!, and a slew of
websites and portals that offer
sharing and communication
tools and services.

Server and Tools Operating systems for Windows Oracle Corporation,

Server; Windows Intune; International Business Machines
Windows Embedded; Visual (IBM) and HP.
Studio; System Centre products;
Microsoft Consulting Services;
and Premier product support
services

Online Services Division MSN, Bing Ads Google

Microsoft Business Division Microsoft Office; Microsoft Software application vendors

Exchange; Microsoft such as Adobe, Apple, Cisco,
SharePoint; Microsoft Office Google,
Project and Office Visio; IBM, Oracle, SAP, and
Microsoft Dynamics ERP and numerous Web-based
Dynamics CRM; and Microsoft competitors, as well as local
Office 365, an online services application developers in Asia
 offering of Microsoft Office, and Europe, compete with
Exchange, SharePoint, and Office. In the market for large
Microsoft Office Web Apps, organisations and divisions of
which are online companions to global enterprises, our Microsoft
Microsoft Word, Excel, Dynamics products compete
PowerPoint, and OneNote. with vendors such as Oracle and
SAP.

Entertainment and Devices Kinect for Xbox 360, Xbox 360 Apple, Google, and Blackberry
Division video games, Xbox 360 are the primary competitors for
accessories, Xbox LIVE, Skype, Windows Phone. Skype's main
and Windows Phone are all competitors are Apple and
available for the Xbox 360 Google, both of which provide a
gaming and entertainment variety of instant messaging,
console. voice, and video communication
products. Sony and Nintendo
Wii are the primary competitors
for the Xbox.

IMPLEMENTATION
The recommendations can be implemented with:
● The strategy chosen is one that encourages Microsoft to become a more self-sufficient company
in terms of software and hardware sales.
● Microsoft's bottom line has been impacted by the recent fall in PC sales.
● Microsoft's most significant job in this approach is to finalize their entry into the online industry.
● The shift of Microsoft's software services into the online market is the second task that the
company must do.

Finance and Accounting Issues

1) Revenue
Microsoft earns revenue by creating, licensing, and maintaining a variety of software products
and services, including cloud-based services, building and selling hardware, and delivering
 relevant internet advertising to a global audience. Compensation for personnel, design,
manufacturing, marketing, and selling their products and services, as well as income taxes, are
the most major expenses.

2) Income Statement Analysis

3) Implementing Global Strategy

After years of losing money in China, Microsoft had no choice but to change its strategy. It was
necessary to cooperate with the government rather than against it. It was necessary to demonstrate
that Microsoft was not a US government stooge. Piracy forced them to decrease their pricing and
tolerate piracy.

● Allow the Chinese government to review and edit the Windows operating system's
essential source code.
● Sell legal Windows and Office at a low price.