INTRODUCTION TO MANAGEMENT

(MGT400)

GROUP ASSIGNMENT

(MICROSOFT SDN BHD)

PREPARED
BY

NAME STUDENT ID

1) MOHD HELMI BIN MUSA 2022270776

2) EDDY KHIRIN BIN BUNAIM 2022237128
3) SYED MOHD AQIEL BIN SYED ISMAIL 2022287796
4) AHMAD NIZAM BIN MOHAMAD 2022859392
5) AHMAD FITERI BIN A GHANI 2022859392

SUBMISSION
DATE 20TH
JUNE 2023
Table of Contents

1.0 Introduction................................................................................................................................2

2.0 Background of the Firm.............................................................................................................3

3.0 Products and Price......................................................................................................................7

4.0 Determinants of Demand...........................................................................................................8

5.0 Determinants of Supply..............................................................................................................9

6.0 Cost of Production....................................................................................................................11

7.0 Type of Market Structure........................................................................................................12

8.0 Business Challenges during Covid-19.....................................................................................13

9.0 SWOT Analysis.........................................................................................................................16

10.0 Conclusion...............................................................................................................................17

11.0 References................................................................................................................................18

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1.0 Introduction

It gives researcher an immense pleasure and satisfaction in submitting this report about
Microsoft Corporation. the endeavor of preparing this report, many people gave the
researcher a hand. Thus, it has become the researcher duty and pleasure to express the
deep regard to them. On the outset of this term paper, the researcher would like to express
a sincere regard to who has given the opportunity for the researcher to work upon this
topic and made present our views and observations through this report.

Apart from that, I also wanted to thank to my lecturer for the unceasing
encouragement and support as well. Adding on, I wish that I can deliver our sense of
gratitude to one and all who have directly or indirectly, have lent their hand in this
venture. As everyone knows, Bill Gates is the owner of Microsoft Corporation. Hence, he
is also the founder of invention and creation of computer-operating technology. (ECIS.
2009).

Bill Gates has contributing his ideas, thinking and also creations just to invent many
technologies such as systems, software, applications and many more. Microsoft is a
worldwide company that had invented many computers, inventions and other technologies
systems inside the software. Microsoft has always been adopted by other companies and
competitors.

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2.0 Background of the Firm

Microsoft is a company that have been moderated by two founders of the Microsoft
Corporation operating system, which are Bill Gates and Paul Allen. However, in 1970s,
Microsoft and another computer program which is Windows were popular with marketing
and invention of technology and computer products that made them focusing into those
fields more serious. Thus, those achievements had forcing Bill Gates to be assigned as the
wealthiest person during 1990s, when he continues to invent and handle all the involved
operating systems alone.

However, his partner, Paul Allen has leaving the company in year of 1983s, before he
achieved his wealthy title. This achievement has also made him for a better spirit of
competitiveness among his rivals. Apart of that, Bill Gates has successfully made his
achievement to exceed an abundant amount of achievement until $75 billion. Since that,
Gates were known as a popular computer expert in the late of 20 th century. After a decade,
starting from year of 2008, Gates announced that he wants to remain himself as a
Microsoft chairman board.

Even though Bill Gates were known as the most influential person that expert in
computer programs and innovative made him special as he was a genius too. It was such a
bonus that he keeps motivated by keen on himself to rewrite more codes about his
ventilation to his business. (Rezaid Co. UK, 2019).

According to Clay M., (2019) as cited in University of Alabama, (2018), Microsoft

has also included another inventions and assets to be added in their markets, as Microsoft
was the head of the technologies. Hence, Bill Gates has successfully created many
inventions, renew many codes and all those related technologies that he has invented.
Thus, in order to build a successful market for his economic growth, Microsoft also has
been manufactured to another equipment of computer hardware.

Microsoft is a powerhouse when it comes to explain about the computers and the rest
of our technologies’ knowledge. Thus, Microsoft also got more of its plate compared to
any other technical company out there in the business market. As referred to previous
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statement, the researcher stated that Bill Gates developed successfully as he has created
many programs not only computer programs. Thus, Microsoft has made a move to help his
marketing demand to be risen. Microsoft big on its success when Bill Gates also has
created programs on their computer to help with any kind of work, such as school work,
work, etc.

As there has been many years that Microsoft developed their technology creation,
they also have to compete with other rivals. Hence, Microsoft has decided to market their
technologies’ invention through the latest technologies at that time such as phones,
computers, watches and etc. Some of another additional programs have been added to ease
humans’ task, thus, it also has provided with other technologies that will adapt with their
work surrounding. From first created to now, Microsoft has been dominated by its rival.
(Clay M., 2019) as cited in University of Alabama, (2018).

According to Al-Quran and Sunnah, there are many sayings that proven Muslims
have to be good and honest while handling business in their daily life. Thus, in order to
remain the Islamic principles and values through every day’s business. As Muslims, we
should know to differentiate the attributes of business to remain good attitudes and to be
humble in seeking of His blessings. According to Zanatul, S. et al., (2016), the
muslimpreneurs should be alert on how they should behave as a Muslim especially when
they are trying to balance between the material and immaterial attributes such as how the
profit will generate, how as entrepreneurs handle promotion of wellbeing and how
supposed the Islamic marketing concepts should be done In a business.

Through Holy Al-Quran as our first reference, it was stated primarily that, as
Muslims, is based on verse and ayatul Quran inside. Through surah An-Nisa’ in ayatul 58,
the translation of ayah is translated as “Indeed, Allah commands you to render trusts to
whom they are due and when you judge between people to judge with justice. Excellent is
that which Allah instructs you. Indeed, Allah is ever Hearing and Seeing.” This ayatul in
58 verse has shown that trust and honesty is the main thing that we have to refer. As we
are Muslims, through this ayatul Quran, it is very crucial to practice giving to someone
that deserves help compared to those who deserves their rights in buying and selling.
Thus, in order to relate this study through this ayatul Quran is even though Microsoft is a

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 non-Muslim operating system company, they can take lesson based on what it is try to be
delivered through its contents.

3.0 Products and Price

According to Microsoft and IPrice website as the price lists’ reference,

marketing strategies that have been used by Microsoft company was familiar as this
company is an anticompetitive, thus, their stuffs will always come with higher prices
but sometimes with less quantity provided. As Microsoft always go far beyond its
partner which are Windows and Office, Microsoft has to protect both corporations in
order to monopoly them, in between 60% until 70% as to avoid barriers and expand
their business far widely. (Microsoft, 2009).

Hence, Microsoft was enjoying using online technology and technological

measures within higher market demands to protect their digital products. As a
monopoly firm, they tend to sell products within higher price with low demand as the
monopolist will conquer the price to boost up their marketing level in overshadowing
customers. In addition, it will always come with less quantity when it comes about to
gain profit. Microsoft sell their products with higher price ranges compared to
Windows as they want to dominate all the brands and make them left behind with
their tactics. One of the tactics that help in maintaining their consumers to keep
aiming on them is by being dominant in the search engine. (University of West
Alabama, 2018).

Thus, as a major competitor among between Windows and also other

competitors such as Apple, Netflix and Amazon that practiced competitive markets.
Apart of that, Microsoft was being more dominant as if the equipment manufacturer
such as OEM buy them and will give them extra benefit especially demand with
higher prices with higher payment incentives. (Microsoft, 2009). Thus, a major
competitor in the hardware and software market, it was automatically made OEM to
pay Microsoft higher than any other firms, so that Microsoft will enjoy high revenues
as their income payment.

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 Microsoft has many products and software developments that had been
invented until today as their formula, codes and invention are renewed starting from
1975. Thus, the most famous Microsoft software application is Microsoft 365.
However, as humans their work when they are using Microsoft, these software helps
Microsoft to Microsoft Office, Microsoft Office 3.0, Microsoft Office 95, Microsoft
Office 97, Microsoft Office 2000, Microsoft Office XP, Microsoft Office 2003,
Microsoft Office 2007, Microsoft Office 2010, Microsoft Office 2013, Microsoft
Office 2016, Microsoft Office 2019.

4.0 Determinants of Demand

Demands in a business is really necessary to fulfill either individual or humans’ necessities

in daily life. Thus, demands not only depends on the price sets by one company, but it
must be focused on how the goods can maintain to be accepted among their users and also
consumers. Hence, one goods’ demand could be determined by the graphs proven based
on its sales. Despite of how prices affect demand in business marketing, prices’ increment
and fallen are a major factor that will lead to higher demand quantity in one business
industry.

In a business, people will mostly demand for good stuffs with cheap prices but still
maintain with the good quality outcomes. In order to maintain a high demand among
consumers, it can be determined from data analysis provided by the research or website
proven through how Microsoft goods’ demand have been gained. Thus, according to
MarketWatch website, it must be related to five components of demand which are the
income, prices of related goods, tastes, expectations and number of buyers. Thus,
according to the website of The Verge, (2020), as the latest pandemic issue that revolve
among worldwide, Microsoft Teams consumers have reached until 75 million daily active
users. Due to that, it could be proven that Microsoft demands have been risen until now, as
it could be categorized under two components which are, firstly, the future expectations
and the number of buyers among consumers.

As the burdens among humans also risen to do activities that relate to school
especially teachers and students, majority of people have demands even though the price

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 was higher than usual price that Microsoft Team has put. Moreover, the daily activities
must be updated from all teachers and students in order to complete their task on that time.
As instance, some of the students might not have Microsoft software, thus, their parents
have decided to give them either through buying the software or they still enable to lend
from others.

Hence, the consumers did not have any choice if Microsoft systems and software were
compulsorily needed. Other than that, the demand can be proven that it has gained higher
than the usual requests as the price offered either remains to similar or been lowered down
than usual demand. In conclusion, the demand could be affect based on how the quantity
demanded based on few factors. Consumers tend to be influenced and get convincing by
their surroundings especially with recent technologies and latest technologies updates.
Apart of that, demand law could also be related that consumers’ quantity, which are their
preferences might be change as if within temporary at one time. In order of that, price
changes also tend to change as if the demand quantity did not welcome at one time.
(Chappelow J., 2020) as cited in (Investopedia, 2020).

5.0 Determinants of Supply

Supply in a business is completely different to the demand in necessity of it, as supply is a

human requirement, in terms of input prices, technology, expectations about future and
also number of sellers. As similar as demand, law of supply is applied to determine the
demand curve affect by the quantity products at one time. It is also affected as if good
quantity supplied will make the good price also rising. Hence, the supply curve is sloping
upward as it depends fully on how suppliers handled them.

However, the supply that sellers bring to the market is fixed at any given point in
time, and sellers will decide either the goods or products want to be marketed or not,
despite of only sell for benefits. (Chappelow J., 2019) as cited in (Investopedia, 2020).
According to the Microsoft Corporation, their supply curve is sloping upward as some of
the Microsoft software and applications supply that sellers bring to market is not fixed at
any given point. As instance, some of the Microsoft game consoles got higher demands
from consumers especially male customers. This could be related that sellers might

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confuse either they want to sell or to withhold their stock as the demands are high. Thus,
consumers enable put the higher risk and willing to buy them even though suppliers tend
to limit those game consoles.

According to Chappelow, J. (2019), as cited in Investopedia (2020), it stated that

customer demand can be rising all over the time, depends on the current condition or trend
lifestyle. As demand and supply are relate to each other, supply may affect on how its
supply developed through marketing, its either increase or decrease in order to analyze the
supply curve shifts data. Apart of that, supply curve shifts data might be problem to be
determined to big company like Microsoft as they were also updating their latest Microsoft
software which is Microsoft 365 to be marketed. Hence, the consumers’ demands are
really necessary to Microsoft to remain their marketing strategies to attract people interests
in buying their products even though they sell within the highest price range for a small
tool or chip founded in software.

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6.0 Cost of Production

The market conditions sometimes can lead to a better or bad demands due to customers’
demand. As every company wishes, the cost production must be fully depended on their
goods or products that focused on both important elements like price and quantity. These
two elements will contribute a lot of benefits if a company can attract their customers to
buy their products more often. As Microsoft Corporation, they need to include three
factors in improving cost production, which is include all the opportunity costs of making
its output of goods and services, explicit costs and implicit costs.

As if without those elements, the cost production will be numb to produce more
profits in every day sales and it is quiet impossible to achieve higher marginal cost. Thus,
competition is allowed as one the major factor when it comes about cost of production.
Without competition, maybe Microsoft Corporation will reduce, as instance, the price of a
stuff is freely set at $60, despite of the actual price is supposed to be $20. According to an
article, without competition between Microsoft and its rival, the consumers tend to buy
from other competitors within lower price. Thus, Microsoft will always charges its price
not considered to much factors, as they have charged all their products within higher price
than costs. It is really necessary to maintain the marginal cost product when sellers are
trying to promote their marketing strategies. Hence, the total cost product in a production
is rising when seller can adapt the great marketing strategies so that the consumers can
easily catch their attention to grab product that have quality.

Microsoft also supposed to be more alert as another company may also do the same
thing as they did. According to formula, average total cost is when total cost is divided
with quantity. Thus, may be some of Microsoft competitors also tend to give up if they
will continue their predator tactics to win over the cost of production. As instance,
Microsoft must provide a new strategy in order to avoid barrier to be similar as in their
position, thus, it will help in terms of long-run and short-run cost curves.

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7.0 Type of Market Structure

Microsoft Corporation stands as the monopoly company that do not stands to its rival, yet
they were also familiar to use pricing costs to maintain their status among their rivals, thus,
Microsoft being selfish for making its products especially software to be rival in higher
prices as they do not have to lower down their prices in order to maintain a stable
marketing. Thus, consumers’ expenses also will become as the most maximum when
Microsoft able to receive a lot of profits with higher interest rates payment from OEM.

As Microsoft really targeted on their competitors, they are still able to have a little
effect on their selfish settlement to their company either in current or future. This is
because, as their rivals can done anything to handle with their marketing tactics especially
when it comes about their exorbitant prices to each of the software and technological
systems. A monopoly company is considering to only focused on one aim which they do not
have to compete for price as they will charge prices higher than the margin cost. By that,
they will easily achieve target and profit but some of the old products may have lower
product quantity.

8.0 Business Challenges during Covid-19

Microsoft Corporation has shown the highest at price to sales component, in addition, it also
has conquered until 10 value of rating, as similar as to Windows company. This is really
important for this company to be similar to another same company and industry to maintain
industry average to give benefits to both companies. Hence, investors can determine whether
to buy the share or not easily through this calculation and rates. Other than that, price to sales
has dominated half of weight for this part, as it will contribute to the sales stock of a
company. The trailing price-to-earning has almost similar value to forward price-to-earning
of this company belongs to, as referring to the MarketWatch website data statistic.

This shown that relative value brings necessity to investors whether to invest in a
company or not. Based on 2.1 statements, earning-per-share or EPS is to help in current
market by its data results. However, Microsoft website has shown results for quarterly

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comparison from March 2020 until month of July in 2020. However, it is a major
impossibility to annual comparison from 2020 to the future which is year 2021 that will lead
to a negative value to this year as it can be that another factors that will lead to Microsoft
Corporation to be fallen. Microsoft margin cost and prices also could be a contribution as a
main problem on why this year has achieved positive results. In addition, since the pandemic
covid-19 has been evolved until recent. This could be concluded that this relative will
produce a better value in future compared to this year.

Despite of three factors that have been stated, risk has also come out as a component
to be in this report. Through the data shown, it can be concluded that Microsoft Corporation
has produced a positive result towards risk, which is they have a lower risk to lose their
potential to get stable growth through market either in terms of assets. As in highlighted
statements stated that this company’s stock has provided a low level quantity products, thus,
may be it tends to produce aggressive attitude among their competitors. Thus, it is really
necessary to a big company like Microsoft Corporation company have to outperform its
strategy to produce less risk to every aspect of their business. Hence, its correlation got the
highest rating in short and long terms in the duration of comparison between two months and
three months.

Despite of that, a high value of relative valuation could be compared to risk as this
company often seeing to get the highest risk compared to another competitor. Thus, the
solution through this risk component is the portfolio manager may look forward to change
more efficient strategy to reduce risk. A negative correlation will produce lower risk, yet a
suggestion to reduce risk is by diversifying the portfolio with non-correlated assets.

Last component of analysis share is depending on its price momentum, as the market
price is keep changing from time to time and this technique helps to both traders and
investors respectively. In comparison, price is measured in risk component due to volatility
and correlation. However, compared to price, Microsoft Corporation has shown neutral
according to its relative strength rating, which is a sign of improvement starting from
previous of 6 months until recent. Thus, it can be concluded that Microsoft Corporation got a
neutral in terms of strength may be in terms of which considering the strategies’ ability on
how to determine either the market is efficiently formed or not. Microsoft Corporation has
also improved their industry average in long duration until reach this year. Despite of relative
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strength, price momentum considered another factor which is seasonality. Seasonality helps a
lot to analyze stocks and to determine future economic trends.

In conclusion, all of the five components have been analyzed thoroughly into this
report. However, based on the major results and analysis made, the investor is not going to
buy the share as many factors have influenced the investor to avoid him for buying the
business share. Thus, Microsoft Corporation have a low tendency to be sold, due to factors
contribution to our economy such as high demand and supply, dividends, interest rates and
also the short term and long-term investors. Thus, the selling price could be determined from
its undervalued status or overvalued status through a company’s performance. According to
fundamental section, it is crucial among other components as it helps economy and financial
in one company’s status to develop successfully. However, as the dividend growth shows
negative rating, thus it is not a good decision for investors to buy their shares. Even though
the dividend has stable and achievable rating, it does not affect its growth, which it will never
give profits to investor through this share. Another crucial factor is including of its price,
which Microsoft Corporation is a worldwide company, thus it can’t be confirmed due to high
volatility produced by the supplier and their manager, since they still do not make changes to
decrease the value in stocks. Despite of value decreasing in stocks price, the traders cannot
easily to do that. Despite of that, trade-off might give satisfactory result, but it does produce
bad quality to stocks.

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9.0 SWOT Analysis

As for strength, Microsoft uniqueness and strength are the products is up to date and
trendy. The design inside the software was very great and interesting. Other than that, when it
is about Microsoft, the major strength is that they are the largest company among worldwide,
as it familiar with their monopoly market structure when it comes to compete among their
rival. Thus, it makes them remain on top position compared to any other companies and
brands. Other than that, the Microsoft brand is among the strongest on the hardware and
software computer market.

This strength contributes toto the ability of the company to attract more customers,
especially their regular customers. This is very helpful to retain their existing customers in
their future. Microsoft is also good at taking advantage of positive things and outcomes of
their products, as the externalities with existing products on the market. Another example is,
as we can see that another third-party software developers also able to create and invent as
similar as Microsoft operating systems and codes as Bill Gates ever done. Hence, the
operating systems may be compatible with the IBM and PC’s, thus, their partner as the
Windows company may overshadowed them one fine day.

The weaknesses are firstly, products made by Microsoft are vulnerable to cybercrime.
The Windows operating system, for example, continues to be a target of countless global
cybercrime attacks. That factor is a weakness because it limits Microsoft products'
attractiveness. Cyber security is in this respect a product aspect of competition between
companies in the computer hardware and software industry. On the other hand, some
products' imitability is a weakness because it could diminish the strength of the Microsoft
brand. In addition, the company's product portfolio mainly reflects dependence on software
products, which weakens the dominants between hardware and software products.

Thirdly, the opportunity of the products is based on the customer’s reviews and
feedbacks. If the customers give good reviews and feedbacks about the products, there will be

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a chance for the customers to buy the products with the entrepreneur again. The customers
also will promote the products to their friends or families to buy if the customer satisfied with
the entrepreneur service and products. Moreover, if the customers give a good review of the
entrepreneur products to their social media, this can help in terms of google search engine,
especially about consumers’ review.

Lastly, the threat that the entrepreneur has to face is, there are too many competitors out
there. Even though that Microsoft is the worldwide company, cybercrime can be the major
threat that can be facing computer technology companies continues to be cybercriminal
among their rivals. As example, cyber-attacks can cripple the organizational processes of
Microsoft, or compromise clients. The piracy, which is particularly widespread in many
developing countries, is another threat to the company. Strong competitive rivalry also
creates market forces which threaten the development of Microsoft as one of the biggest
companies on the market. In addition to the increasing popularity of freeware, the
diversification of other companies, which is currently will offer operating systems and
computing equipment products, as they also may restrict and potentially reduce the business
of the company.

10.0 Conclusion

In conclusion, all of the components in every chapters have been analyzed thoroughly
into this report. However, based on the major results and analysis made, Microsoft is not
going to buy or have sharing with Windows corporation as many factors have influenced this
firm to avoid it from buying the business share. Thus, this report can be concluded that one
company may have a high tendency to be sold, due to factors contribution to our economy
such as high demand and supply, dividends, interest rates and also the short term and long-
term investors.

As Microsoft is the largest company among worldwide, thus the selling price could be
determined from its undervalued status or overvalued status through a company’s
performance. According to major elements like pricing, cost production, it is crucial among
other components as it helps economy and financial in one company’s status to develop
successfully. However, as the dividend growth shows a very positive rating, thus it is not a

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good decision for investors if they want to buy or pay their share. Even though the dividend
has stable and achievable rating, it does not affect its growth, which it will never give profits
to investor through this share.

Another crucial factor is including of its price, which Microsoft is the largest
company among worldwide, it can’t be confirmed due to high volatility produced by the
supplier since they still do not make changes to decrease the value and price in stocks.
Despite o quantity and demand value decreasing in stocks price, the suppliers cannot easily
do that. Despite of that, trade-off might give satisfactory result, but it does produce bad
quality to stocks.

11.0 References

Chappelow, J. (2020). Law of Demand. Investopedia. Retrieved from

https://www.investopedia.com/terms/l/lawofdemand.asp

Wali, K. (2019). How Bill Gates Laid The Seeds of A Global Technology Revolution.
Rezaid.Co.UK. Retrieved from https://rezaid.co.uk/how-bill-gates-laid-the-seeds-of-
technology-revolution/

ECIS. (2009). Microsoft: A History of Anticompetitive Behavior and Consumer Harm.

Retrieved from
http://www.ecis.eu/documents/Finalversion_Consumerchoicepaper.pdf

University of Alabama. (2018). Microsoft Company. Research Gate Publication, 1-13.

Retrieved from
https://www.researchgate.net/publication/328967652_Microsoft_CIS_Essay

University of New Mexico. (2014). Microsoft Manages Legal and Ethical Issues. Retrieved
from https://danielsethics.mgt.unm.edu/pdf/microsoft.pdf

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King, Dr. (2011). Enhancing Swot Analysis Using Triz and The Bipolar Conflict Graph: A
Case Study on The Microsoft Corporation. ResearchGate Publication. Retrieved
from http://citeseerx.ist.psu.edu/viewdoc/download?
doi=10.1.1.197.8941&rep=rep1&type=pdfhttps://www.researchgate.net/
publication/
228749288_Enhancing_Swot_Analysis_Using_TrizAnd_The_Bipolar_Conflict_Gra
ph_A_Case_Study_On_The_Microsoft_Corporation

Zanatul, S. et al. (2016). Exploring the Concept of Al-Falāḥ (Success) In Business: An

Insight from Muslim Experts. International Journal of Business and Applied Social
Science, 2 (8), 1-13. Retrieved from
https://ijbassnet.com/storage/app/publications/57c706588a8d511472661080.pdf

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