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REPORT ON STUDY OF MARKETING

STRATEGIES OF MICROSOFT

SUBMITTED BY
ABHINEET SRIVASTAVA
B.COM (HONS)
ENROLLMENT NO- A7004614101
Under guidance of:
Faculty Guide
Mr. Samarth Pandey
ABS, Lucknow
(DISSERTATION REPORT IN PARTIAL FULFILMENT OF THE AWARD OF FULL TIME B.Com (Hons)
(2014-17)

AMITY BUSINESS SCHOOL


AMITY UNIVERSITY UTTAR PRADESH LUCKNOW

DECLARATION

Title of project report Report On Study Of Marketing Strategies Of Microsoft

I understand what plagiarism is and am aware of the Universitys policy in this regard

I declare that
(a)

The work submitted by me in partial fulfillment of the requirement for the award of degree B.com
(Hons) assessment in this Report on Study of Marketing Strategies of Microsoftis my own; it
has not previously been presented for another assessment.

(b)

I declare that this Report on Study of Marketing Strategies of Microsoft is my original work.
Wherever work form other source has been used, all debts (for words data, arguments and ideas)
have been appropriately acknowledged and referenced in accordance with the requirements of
NTCC Regulations and Guidelines.

(c)

I have not used work previously produced by another student or any other person to submit it as
my own.

(d)

I have not permitted, and will not permit, anybody to copy my work with the purpose of passing it
off as his or her own work.

(e)

The work conforms to the guidelines for layout, content and style as set out in the Regulations and
Guidelines.

Date:

Name of student:-Abhineet Srivastava

Enrolment no: - A7004614101


Programme Name: - B.com (Hons.)

FACULTY CERTIFICATE

Forwarded here with a summer internship report on Report on Study of Marketing Strategies of Microsoft
submitted by Abhineet Srivastava Enrollment NO A7004614101 student of BCOM (hons)3rd Semester
(2014-17)

This project work is partial fulfillment of the requirement for the degree of Bachelors Of Commerce
(honors) from Amity University Lucknow Campus, Uttar Pradesh.

Asst. Prof. Mr. Samarth Pandey

AMITY UNIVERSITY,
LUCKNOW CAMPUS
UTTAR PRADESH

AMITY UNIVERSITY, LUCKNOW


INTERSHIP PROGRAM AND CONFIDENTIALITY
AGREEMENT
This AGREEMENT is between the office of the register Amity university Lucknow and Abhineet
Srivastava a student presently studying at the Amity University Lucknow The student named above desires
to undertake summer internship / training program as intern in the institute / Department / Center B.Com
(Hons)Amity University as a part of his studies. The competent authority of the institute where the student
is presently studying has officially recommended the student, confirming his antecedents, track record and
good moral character.

CONFIDENTIALITY:
Confidential information means any information of a secret or confidential nature relating to the internship
/ training workplace. Confidential information may include, but is not limited to, trade secrets, proprietary
information, customer information, customer lists, methods, plans, documents, data, drawings, manuals,
notebooks, reports, models, inventions, formulas, processes, software, information system, contracts,
negotiations, strategic planning, proposals, business, alliances, and trading materials and / or any other
intellectual property of the University.
The student / intern agrees to observe the confidentiality requirements of the Amity University, its
Disciplinary procedure in all respects and any additional requirements set out by the Amity University.
Specifically, the students / intern agrees to observe confidentiality in the following respects.
As University intern, I agree that:
1. I will use confidential information only as needed by me to perform my legitimate duties as intern.
This means, among other things that.
B. I will not seek confidential information for which I have no legitimate need to know,
C. I will not any way divulge share, copy, release sell loan revise, alter or destroy any confidential
information except as properly authorized within the scope of my internship:
D. I will not misuse confidential information or carelessly care for confidential information; and

E. I will strive to protect the privacy of all confidential information that I come into contact with.
2. I will safeguard and will not disclose my access code or any other authorization I have that allows
me to access confidential information. I accept responsibility for all activities undertaken using my
access code and other authorization.
3. I will report to my Head / supervisor activities by any individual or entity that I suspect may
compromise the confidently of confidential. Reports made in good faith about suspect activities
will be held in confidence to the extent permitted by law, including the identity of the individual
reporting the activities;
4. I will be responsible for my misuse or wrongful disclosure of confidential information and for my
failure to safeguard my access code or other authorization to access confidential information. I
understand that I have no right or ownership interest in any confidential information referred to in
this agreement. The University may at any time revoke my access code, other authorization or
access or confidential information. At all-time during my internship with Amity University, I will
act in the best interests of PMC.

I have read and understand the above definition of confidential information I agree that I will not at
any time, both during and after my enrollment in University Internship, communicate or disclose
confidential information to any person corporation or entity.
It is understood that any breach of confidentiality will result in immediate termination of the internship
and that a report of the breach will be made by the concerned Head of Institution.

I HAVE READ THE ABOVE CONFIDENTIALITY AGREEMENT AND AGREE TO ITS


TERMS.AGREED

Signature:-

Abhineet Srivastava (PRINTED FULL NAME)


___________________________________ (DATE)
Signature of Authorized signatory of the institution
(Institution deputing the students)
ACCEPTED
REGISTRAR
AMITYUNIVERSITY, UP
Lucknow

STUDENTS CERTIFICATE
Certified that this report is prepared based on the summer internship project undertaken by me in Report On
Study Of Marketing Strategies Of Microsoft from 10thAugust 2015 to 19thOctober 2015, under the able
guidance of Asst. Professor Mr. Samarth Pandey in partial fulfillment of the requirement for award of degree
of B.COM(Hons) 3rd SEM from Amity University, Uttar Pradesh.

Date.______________

Signature

Signature

Signature

Mr. Abhineet Srivastava Asst. Professor:-Mr. Samarth Pandey

Professor V.P Sahi

Student

Director (ABS)

Faculty Guide

AMITY UNIVERSITY
WEEKLY PROGRSS REPORT
For the week commencing :- 10 Weeks
Name of the student Abhineet Srivastava

WPR NO-----------------Enrolment No:- A7004614101

Programme :- B.Com (Hons)

Name of NTCC- Company Report

Organization Name:-Amity University Lucknow


External Guides Name:-Mr. Samarth Pandey
Project Title:-Report On Study Of Marketing Strategies Of Microsoft
Targets for the week

Achievements for the week

Discover the Objectives of Brief


Study
Project.
Organization.

Of

Future work plans

The To Start With Report and Study


Its Objectives.

Discovering The Data And Preparing The Data For Final Studying The Data For Further
Analyzing the Data.
Submission.
Information.

Making And Finalizing the Completion of the project Approval Of The Project and
Report.
according to the module.
Receiving Facultys Feedback.

Signature of the student:

Name of the student: Abhineet Srivastava


8

Acknowledgement
This project report would not have been possible without the support and guidance of my teacher. I would
express my heart-felt gratitude towards and, without whose guidance and support, I would not have been
able to understand the objective of the project and this project would not have been complete. He has been
really understanding and supportive in explaining all the details with patience. I would express my gratitude
towards him for taking time out of him schedule to guide me during the report.

PREFACE
Project Report a very vital part of curriculum B.Com. (hons) is the stepping-stone to management career.
In order to achieve practical, positive and concrete result, the classroom learning has to be effectively
supplemented in relation to the situation existing outside the classroom for developing healthy managerial
and administrative skills in a potential manager.

As an integral part of the course curriculum, all B.Com. (hons) students are required to undergo project
Report in any organization. The main objective of this Project report is to supplement the students
theoretical knowledge with a practical exposure to the working environment of an organization. This
programme enhances the students capability to cope up with the uncertainties and challenges, which are
the part and parcel of every organization.

I feel highly gratified in this report. It has been my constant endeavour to present this report in the most
systematic and analytical manner.

10

S.NO

TABLE OF CONTENTS

Page
No.

1.

Executive Summary

12-18

2.

Synopsis

19-22

3.

Introduction

23-28

4.

Definition Of Marketing Strategies

5.

Description of Marketing Strategies

6.

Review of Literature

7.

Study Area/Company Profile (Microsoft)

34-53

8.

Research Methodology

44-45

9.

Result and Discussion & Recommendation

10.

Bibliography

11

29
30-32

Executive Summary
Microsoft is unique in history. By virtue of its dedication to providing complete PC user desktop solutions,
Microsoft has revolutionized computing by making it available on every desktop. PC solutions are
positioned to promote ease of use. The company has developed a group of products that provide incredible
functionality, are intuitive to use, and are at the same time widely available to users because of the low cost
of products. Rules-based configuration enables implementation of large numbers of products by a great
variety of consumer and business customers in many different countries. Limiting end user software
operations to very simple, understandable, well defined tasks make computer use achievable. This is the
genius of Microsoft.
Microsoft Revenue
Microsoft has published its Q4 2014 earnings report, and the company has made $4.6 billion in net
income on $23.38 billion in revenue. Revenue has increased compared to $19.9 billion from the same
period last year, and net income decreased only slightly compared to last year's $4.97 billion. In all, the
earnings don't seem to hold many big surprises at least not compared to the massive layoffs it recently
announced.
Stronger-than-expected PC demand helped Intels latest quarterly earnings, and it has also impacted
Microsofts. OEM revenue for Windows increased by 3 percent this quarter, further hinting that the
decline of traditional PC sales might be starting to slow down. Some of that increase is likely thanks to
businesses refreshing their PC hardware as Windows XP entered end of support back in April.
As Microsoft battles to focus its efforts on mobile and the cloud, it is still attempting to push the
Windows Phone platform. The company reported selling 5.8 million Lumia phones and 30.3 million nonLumia phones "following the completion of the NDS acquisition." Although that may look like a 21
percent drop for Lumia sales year over year, those sales numbers only account for two of the three months
of this past quarter. Microsoft has now acquired Nokias phone business, and it plans to focus solely on
Windows Phone for the low- and high-end over the next 18 months.

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Unfortunately, details on Surface sales are a mystery. Thats no surprise as Microsoft still refuses to
provide sales figures, but Surface accounted for $409 million in revenue this quarter. Microsoft's
decision not to ship its Surface Mini hit revenue for Surface overall, as the company admits that current
year cost of revenue related to Surface includes a "decision to not ship a new form factor." Elsewhere in
hardware, Microsoft sold 1.1 million Xboxes during the quarter, though it did not specify how many were
Xbox Ones and how many were Xbox 360s. Either way, the Xbox One has fallen behind Sonys
PlayStation 4 US sales for six months in a row.
Microsoft continues to do well with its server and cloud offerings, both of which are increasingly
important businesses for the company. Revenue has increased 11 percent to $13.48 billion overall. That's
a mix of its Azure cloud service, Office 365 for business and enterprise, Windows volume licenses, and
products like Exchange, SharePoint, and Lync. With commercial cloud revenue growing by 147 percent,
Microsoft's cloud performance is still the most impressive growth point for the software maker as it
continues its focus on cloud and mobile. Even on the consumer side, Office 365 Home and Personal
subscribers now total 5.6 million, that's an addition of 1 million subscribers this quarter.
Microsofts latest earnings come as its new CEO, Satya Nadella, attempts to steer the company in a new
direction. 18,000 job cuts are planned over the next year, with most affecting former Nokia employees as
part of the $7.2 billion acquisition.

Microsoft Operating System And Application Strategy :Since its inception in 1975, Microsofts mission has been to create software for the personal computer that
empowers and enriches people in the workplace, at school and at home. Microsofts early vision of a
computer on every desk and in every home is coupled with a strong commitment to Internet related
technologies that expand the power and reach of the PC and its users. Microsoft strives to produce
innovative products that meet customer evolving needs. Large corporations used multiple versions of Office
during the deployment phase. Upgrades depend on the time it took to install large numbers of desktops and
end users. The Office 97 service upgrade included Word 97 binary file converter that simplified the sharing
of documents across multiple versions of Word. Shell Oil deployed Office 97 on 10,000 desktops in the
same day. Microsoft has built in market protection because of the diversity of its Windows operating
systems. The products go beyond full functionality to a level of product complexity that delivers enormous
simplicity to users. No competitor can hope to deliver comparable functionality even if the operating system
code is available. Microsoft dominates by virtue of its comprehensiveness. Microsoft has positioned to
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provide a robust, scalable, and global directory service. Active directory is being positioned to be integrated
with new and existing applications. NT is positioned to minimize costs, improve functionality, and increase
the ability to respond to moves and changes. Consolidating directories and implementing a global directory
service represents a feature of NT. Therein lies the vulnerability of Microsoft as well. Some competitors
may implement network computing more efficiently than does Microsoft. Microsoft is tied to a large,
immutable operating system that is not yet stable. Success has pushed out competition in many client
segments but that situation could change. Now, competitors can only hope to provide products that
supplement Microsoft functionality rather than compete directly with it. The 3Com Palm operating system
is more efficient than the Microsoft CE operating system. Linux is emerging as a market force. Real time
operating systems are gaining a market presence. Companies now seek to ally with Microsoft to achieve a
market presence.

Microsoft seeks to harness critical forces in the personal computing and digital

technology revolutions by creating a plethora of partnerships represent the primary strength of Microsoft.
Microsoft has been able to ally with the developers who define PC technologies, and the customers who
use PC technologies.

Competition
Our server operating system products face competition from a wide variety of server operating systems and
applications offered by companies with a range of market approaches. Vertically integrated computer
manufacturers such as Hewlett-Packard, IBM, and Oracle offer their own versions of the Unix operating
system preinstalled on server hardware. Nearly all computer manufacturers offer server hardware for the
Linux operating system and many contribute to Linux operating system development. The competitive
position of Linux has also benefited from the large number of compatible applications now produced by
many commercial and non-commercial software developers. A number of companies, such as Red Hat,
supply versions of Linux.
We compete to provide enterprise-wide computing solutions and point solutions with numerous commercial
software vendors that offer solutions and middleware technology platforms, software applications for
connectivity (both Internet and intranet), security, hosting, database, and e-business servers. IBM and
Oracle lead a group of companies focused on the Java Platform Enterprise Edition that compete with our
enterprise-wide computing solutions. Commercial competitors for our server applications for PC-based
distributed client/server environments include CA Technologies, IBM, and Oracle. Our web application
platform software competes with open source software such as Apache, Linux, MySQL, and PHP. In
middleware, we compete against Java middleware such as Geronimo, Wild-fly, and Spring Framework.
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Our system management solutions compete with server management and server virtualization platform
providers, such as BMC, CA Technologies, Hewlett-Packard, IBM, and VMware. Our database, business
intelligence, and data warehousing solutions offerings compete with products from IBM, Oracle, SAP, and
other companies. Our products for software developers compete against offerings from Adobe, IBM, and
Oracle, other companies, and open-source projects, including Eclipse (sponsored by CA Technologies,
IBM, Oracle, and SAP), PHP, and Ruby on Rails, among others.
Our embedded systems compete in a highly fragmented environment in which key competitors include
IBM, Intel, and versions of embeddable Linux from commercial Linux vendors such as Metrowerks and
Monta Vista Software.
We believe our server products provide customers with advantages in performance, total costs of
ownership, and productivity by delivering superior applications, development tools, compatibility with a
broad base of hardware and software applications, security, and manageability.
Competitors to Windows Commercial are the same as those discussed above for Windows in the D&C
Licensing segment.
Office Commercial revenue growth depends on our ability to add value to the core product set and to
continue to expand our product offerings in other areas such as content management, enterprise search,
collaboration, unified communications, and business intelligence. Competitors to Office Commercial
includes software application vendors such as Adobe Systems, Apple, Cisco Systems, Google, IBM, Oracle,
SAP, and numerous web-based competitors as well as local application developers in Asia and Europe.
Cisco Systems is using its position in enterprise communications equipment to grow its unified
communications business. Google provides a hosted messaging and productivity suite. Web-based
offerings competing with individual applications can also position themselves as alternatives to our
products. We believe our products compete effectively based on our strategy of providing powerful,
flexible, secure, easy to use solutions that work well with technologies our customers already have and are
available on a device or via the cloud.
Skype competes with a variety of instant messaging, voice, and video communication providers, ranging
from start-ups to established enterprises.
Our Microsoft Dynamics products compete with vendors such as Oracle and SAP in the market for large
organizations and divisions of global enterprises. In the market focused on providing solutions for small
and mid-sized businesses, our Microsoft Dynamics products compete with vendors such as Infor, The Sage
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Group, and NetSuite. Salesforce.coms cloud CRM offerings compete directly with Microsoft Dynamics
CRM on-premises offerings.

Commercial
The principal products and services provided by the Commercial Other segment are: Enterprise Services,
including Premier product support services and Microsoft Consulting Services; Commercial Cloud,
comprising Office 365 Commercial, other Microsoft Office online offerings, Dynamics CRM Online, and
Microsoft Azure.
Enterprise Services, including Premier product support services and Microsoft Consulting Services assist
customers in developing, deploying, and managing Microsoft server and desktop solutions and provide
training and certification to developers and information technology professionals on various Microsoft
products.
Office 365 Commercial is an online services offering that includes Microsoft Office, Exchange, SharePoint,
and Lync, and is available across a variety of devices and platforms.
Dynamics CRM Online is designed to provide customer relationship management and supply chain
management for small and mid-size businesses, large organizations, and divisions of global enterprises.
Revenue is largely driven by the number of information workers licensed.
Microsoft Azure is a scalable operating system with computing, storage, database, and management, along
with comprehensive cloud solutions, from which customers can build, deploy, and manage enterprise
workloads and web applications. These services also include a platform that helps developers build and
connect applications and services in the cloud. Our goal is to enable customers to devote more resources to
development and use of applications that benefit their businesses, rather than managing on-premises
hardware and software.

Competition
The Enterprise Services business competes with a wide range of companies that provide strategy and
business planning, application development, and infrastructure services, including multinational consulting
firms and small niche businesses focused on specific technologies.
Competitors to Office 365 Commercial are the same as those discussed above for Office Commercial.

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Microsoft Dynamics CRMs online offerings primarily compete with Salesforce.coms on-demand CRM
offerings. Microsoft Azure faces diverse competition from companies such as Amazon, Google, IBM,
Oracle, Salesforce.com, VMware, and other open source offerings.

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Synopsis
External Environment
General Environment
Economic Environment: The factors that impact Microsofts operations include personal income, the
Unemployment rate, and interest rates. All of these factors can have influence on the purchasing power of
consumers and firms. Companies using software tend to choose less costly ones to replace Microsoft. Also,
households are likely to spend less on computer products because of the current recession. Global
Environment: Since early 1990s, Microsoft has become the global leader of software services and Internet
technologies for the computing industry. Sales for the global software and service industry stood at $2,330
billion in 2009. Though it experienced decelerating growth in the recent years, it is forecasted that the
industry will experience 50% growth and sales will reach $3,400 billion by 2014. Sociocultural
Environment: With the rapid development of computer technology, people can easily talk and see each
other via the Internet. This new style of communication gives Microsoft an chance to promote MSN and
Skype which offer convenient and cost-saving ways for keeping in touch with families and friends.
Demographic Environment: Globalization and the diffusing of technology drive significant changes in the
demand of IT products. Africa currently has the lowest penetration of Internet use. Asia has the largest
amount of Internet users. However, Internet users only represent 20% of the total Asian population. This
shows a huge potential market for the IT industry to expand in these areas.
Political/Legal Environment: The general environmental factor that highly affects Microsoft is political.
The U.S. Justice Department filed antitrust charges against the company in 1998, claiming that Microsoft
had stifled Internet browser competition and limited consumer choice. In March 2004, the European Union
(EU fined Microsoft and ordered it to take out its media player software from Europeans Window version.
Microsoft already reached the settlement for the first case, but a worst case scenario would be that, these
legal actions can cause Microsoft to be split up. Technological Environment: Microsoft strongly depends
on its technologies. The market requires the most advanced technology to meet the consumers preferences
and competition with other rising companies, such as Google and Apple, is intense. Googles web browser,
Google Chrome, is compatible with all operating systems. Apples main selling point is that its operating
system is not as vulnerable to attack by virus and hackers as Microsofts operating system.

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Industry Environment
Threat of New Entrants: The threat of new entrants for Microsoft is very low. In fact, Microsoft has
practically been a monopoly company. It held over 90% of the market share with their operating system
and browser. Competitors have a hard time accessing the market due to economic, technological or legal
barriers. Bargaining Power of Suppliers: The main suppliers for the industry are hardware device suppliers
and software tool suppliers. Principle hardware components are mainly obtained from a sole supplier (Intel).
The power of suppliers is strong because of high importance of inputs. Bargaining Power of Buyers: The
main buyers in the industry are corporations, individual consumers, as well as government bodies. These
buyers could be divided into two segments: (1) lower end buyers who are small businesses that serve local
or regional firms; (2) upper end buyers that include large corporations and customers for whom a name
reputation carries importance. The buying power of these customers is limited because there are few
alternatives. Microsofts reputation in the industry helps gain a competitive advantage Threat of Substitute
Products: Threat of substitutes always exists. Apple is one of its most important threats. Microsofts
profitability suffered when better Apple software came into the market. Microsoft has always positioned
itself at a lower price than Apple to retain their position in the software market.
Rivalry among Competing Firms: Competition among existing rivals is forcing to new product
development, discounting, advertisement, and service improvements. The dominant players like Microsoft
continue to intensify competition in the high-end market from the diversification and other fields. The low
switching cost and high exit barriers also add to the rivalry. Thus, there is moderate competition in the
industry.

Internal Analysis
Resources
Tangible Resources: For Microsoft these include:
1. Financial Resources: Microsoft has produced not only continuous huge positive net income, but it has
also increased cash flow. Therefore, it owns sufficient cash reserves (Julian, 2010).
2. Physical Resources: Microsoft has placed regional operating centres in strategic geographic locations
that service all aspects of customer interactions including vendor management and logistics. These
operational centres are located throughout the world. These operational centres also serve as data centres.

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Intangible Resources: For Microsoft these include:


1. Human Resources and Innovative Resources: Microsoft is able to retain its current talented employees
and attract new ones. These employees are capable of contributing creative ideas to the company. The
company also acquires new ideas and scientific capabilities by making several strategic acquisitions (Julian,
2010).
2. Reputational Resources: As mentioned before, Microsofts product has a strong brand name among
customers, especially enterprises.

Capabilities
Research and Development: Microsoft is able to do comprehensive and intense Research. The company is
also able to develop new products frequently and continuously.
Marketing: As an upgrade replacement of XP, Microsoft introduced Vista. Nonetheless, this operating
system did not meet the consumers preferences. After that, Microsoft introduced Windows 7, which not
only helped the company revive but also enhanced its image (Julian, 2010).
Core Competencies
Microsoft is one of the dominators in the software market. It is strong financially. Therefore, to keep its
products attractive and ahead of many competitors, the company is able to spend a large amount of capital
on R&D. Also, Microsoft possesses a strong brand name around the world; consumers are familiar with its
products.

Current Situation
Microsoft, whose assets were valued at $41 billion, as compared to only $8.5 billion in unsecured debt
received an AAA rating from financial service companies S&P and Moody's. Consequently, in February
2011 Microsoft released a corporate bond amounting to $2.25 billion with a relatively low borrowing rate
(Sifert & Rigby, 2011). Microsoft is challenged in many areas. For instance, Firefox has blunted Internet
Explorer's dominance. Microsofts Bing has never managed to come close to the kind of usage obtained by
Google, the world's largest search engine. Microsoft's Online Services Division has been continuously
losing money since 2006. Most recently, Online Services lost $726 million in the first quarter of 2011. This
follows a loss of $2.5 billion for the year 2010 (Siegler, 2011). For the first time in 20 years Apple surpassed
Microsoft in Q1 2011 quarterly profits and revenues. This was due to a slowdown in PC sales and
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continuing huge losses in Microsoft's Online Services Division (which contains its search engine Bing).
Microsoft profits were $5.2 billion, while Apple profits were $6 billion, on revenues of $14.5 billion and
$24.7 billion respectively (White, 2012).

Main Strategic Challenges


Leverage Bing to Generate More Profits to be successful online, Microsoft needs to do a better job of
leveraging Bing and increasing its web-advertising revenue. For too long, Microsoft performed poorly in
web-advertising. In contrast to Google's advertising platform, Microsofts service falls behind in almost
every area. The company needs a strategy to fight Google's domination over the Internet and ad based
revenue generation.
Create Solid Marketing Campaigns
Apple's "I'm a Mac, Im a PC" ads have proven extremely successful. Over the past few years, Microsoft
has tried to match their success with marketing campaigns of its own; however, they never worked out. In
order to motivate consumers to use Windows and Bing, Microsoft needs to spend time in the coming years
developing marketing campaigns that appeal to consumers, package its products in a good light, and show
consumers the benefits of using Windows and Bing. Without doubt, the development is challenging. Gain
Market Share for Hardware Devices, According to International Data Corporations data, Windows Phone
has only 2% global market share in the third quarter of 2012Computer World, 2012). The consistency of
the low market share in the recent years may indicate the unpopularity of Windows-based phones.
Recently, Microsoft has also released a new tablet called Surface. The same issue may exist in this new
device as well. In order to compete with other similar products, the company needs to prove that their tablets
compatibility and manageability are as good as they claimed. Solve Security Problems The popularity of
the companys software products makes it a major target for hackers. Its operating system, chatting software
such as Messenger, Skype, and Explorer are victims to hackers and spammers. Mostly, the company patches
its software only after finding out that users are being attacked. The company needs put more effort on
proactively fixing its security holes and improving its response time to security issues to better protects its
users.

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Introduction

Microsofts ambitions have been anything but small since its inception in the early 1980s. Microsofts is
the worlds number one software company and has controlled an overwhelming share of the personal
computer operating system market. Microsofts products do not stop at just an operating system; the
company supplies the world with a number of other products including their Office Software Suite, their
video game console Xbox, CRM Applications, server and storage software, and Zune, their digital music
player. The company has had acquisitions to bulk its presence in markets such as online advertising,
mobile devices, and enterprise software. Microsoft Corporations headquarter is in Redmond, Washington
and started mainly as a software development company creating operating systems for personal
computers (PCs) and office productivity software for PCs. Today this company is developing and
supporting many software products for various computing devices worldwide. MSFT (2006) identified
Seven Major product segments within the Microsoft Corporation:
1) Clients
2) Servers and Tools
3) Information Worker
4) Microsoft Business Solutions
5) MSN
6) Mobile and Embedded Devices
7) Home and Entertainment
The Microsoft technical innovations and its leadership in consumer markets and corporate markets make
them a redoubtable competitor in this information age. Throughout this paper, I will be discussing a little
history Microsoft, their Technological Strategy, the companys core competencies, industry dynamics,
sourcing and innovation, and their strategy to protect their innovations.

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Bill gates Microsoft has been an iconic brand of our era. There are 100s of lessons which business
graduates can learn from Microsoft. However, here we present 8 marketing strategy lessons from
Microsoft.
1) Network Marketing The first and most known strategy of Microsoft is Network marketing. This is
because each windows product is compatible with another windows products. Your office documents can
be opened on most computers because of the number of people using Microsoft. Thus it has established
the concept of Network marketing perfectly.
2) Regular Product Launches Microsoft is present almost everywhere, be it the music market with its
Zune, the computer peripherals market, it is the market leader in operating systems, it has its own tablets,
it has revolutionized gaming with XBOX 360, it is now involved in Cloud computing and it generally
comes out and gives tough competition to the current players in the market. This expansion helps build up
the deep pockets of Microsoft.
3) Follower Strategy One problem in the strategy of Microsoft has been that it has had a follower
strategy in the past decade or more. It has rarely come out with an innovation. Check Microsoft office
from 2003 to 2010. You will see that except for graphics, they have been almost the same products over
and over again. In hardware too, there has hardly been an innovation in Microsoft. I-pod launched in 2001
and Zune launched in 2006. Need we say more?
4) Learning and Adapting If you look at Windows, you will find that XP had the most security holes,
Windows Vista had several too, Windows 7 has quite less security problems and Windows 8 too is
expected to be even better in security. Thus Microsoft is learning fast and adapting to the environment.
Microsoft knows that nowadays people need security and it is providing the same to them.
5) Build a Cash Cow Even though I am repeating this point, but this is important. Microsoft has a cash
cow operating systems as its backup. And its whole empire is built on the basis of this cash cow.
6) Be Customer Focused There are a lot of jokes about the customer service of Microsoft but if you
really look at it, then the reason why Microsoft is actually working is because help is available offline as
well as online. Your computer might crash for any reason, but generally you are able to specify the reason
for the crash and if you are a techie you will be able to rejuvenate it. Even a 10 year old nowadays knows
how to correct windows.

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7) Ease Of Use Make products which can be used by the youngest to the oldest in the easiest manner.
Like Nokia in mobile phones, Microsoft OS is known for its ease of access. The start button has been
revolutionary.
8) Build Brand Equity Today, Microsoft is amongst the top 10 companies in terms of its brand equity
due to many different consumer and business to business products that it has. Building such a high brand
equity has paid off for Microsoft with it becoming a highly trusted household name.

Microsoft is a largest software company in the world and founded by Bill Gates and Paul Allen in 1975
(Microsoft Corporation 2004). Microsoft is incorporated as limited company in United Kingdom
(Microsoft Corporation 2004). Nowadays, Microsoft becomes a monopoly company in the market (Lewis
1999). Mission and value of Microsoft state that are "to assist public and company in business during the
world realize their full potential" (Microsoft Corporation 2010d). For software companies as large as
Microsoft, the responsibility is most important on the social and people. The President for Latin America,
Hernan Rincon (2007) claimed that how Microsoft initiatives are real differences for individuals,
communities, business, and entities countries in Latin America and Caribbean that is, the responsibility of
Microsoft Company. Thus, as a global company would make sure the information technology's
contribution goes well away from the business that includes Microsoft's social and economic impact on
society (Rincon 2007).

At Microsoft as largest as software company would have impact society and stakeholder. Typical of
stakeholder are divided internal and external that including employees, customers, suppliers, government,
civil society and shareholders. As an international company, more or less has improved and impacted
their decision-making in business by stakeholder engagement that is also helping Microsoft address the
changing expectations of society and community (Microsoft Corporation 2010e). Besides, most important
for a company is customers and partner experience(CPE), so that Microsoft in order to satisfy their
customers and partners and make approach as well as to focus on improving the experiences of customers
and partners that including listen to customer and partners, feedback and customer and partner ready
(Microsoft Corporation 2010e). Employees, government and community engagement with
nongovernmental organizations (NOGs) are also the stakeholder among (Microsoft Corporation 2010).
Porter and Kramer (2007) state that while facing an importance of an issue, the stakeholder of company
does not obligatory indicate to its. Hence stakeholder may no authority manage the company as well.

25

In addition, technology skills training, strengthening NOGs through technology, and engaging employees
are provided to support for communities by Microsoft (Microsoft Corporation 2010). These three ways
are under the Unlimited Potential (UP) of Microsoft that helps to improve or develop the underserved
communities around the world. Main of UP is focus on enabling jobs and opportunities, fostering local
innovation and transforming education to economic and social development, which programs such as
workforce development, strengthening NOGs through information, disaster and humanitarian response
and so on (Microsoft Corporation 2010), it helps to take relevant, reachable, and affordable technology
for people who lack to its in the world (Gates 2007).
Besides, from environmental and infrastructure barriers, in this particular, have to find out technologies
fitted to specific needs and languages (Gates 2007). The Chairman of Microsoft Corporation (Gates 2007)
claimed that "All human beings deserve a chance to achieve their full potential and bringing the benefits
of technology". Therefore, Microsoft is giving more chance for people around the world to develop
technology as well as good.
Furthermore, technology skills training such as for workforce development, with partner to create relevant
training opportunities that would be believed that to help foster social and economic opportunities for
change lives of people and communities (Microsoft Corporation 2010). Besides, the purpose of workforce
development is affording the organizations that job to make sure that individuals have information
technology (IT) skills (Microsoft Corporation 2010). For instant, Microsoft has supplied more than US$
350 million and software grants to more than 1,000 community partners that through Community
Technology Skills Program Recipients of UP (Microsoft Corporation 2010). As large as Software
Company of Microsoft would afford more programs or centres to community to help people develop
technology skills such as Community Technology Centres, Digital Literacy Curriculum, Unlimited
Potential Community Learning Curriculum, Expanded Job Skills Training Programs, and others
(Microsoft Corporation 2010). In case, Microsoft never have appears in the world, today's people and
social may underdevelopment. Hence, workforce development is an important key for economy's growth
and technology improvement.
Likewise, Microsoft is attaches great importance to the strengthening NOGs through technology. The
objective of Microsoft is helping NOGs set free technology to move forward to social and economic
development. Microsoft also provides a all-inclusive set of services, products or goods, relevant tools to
NOGs and communities that are the approach by using Microsoft's strategy to ensure NOGs admission to
access to secure IT, optimizing the delivery of IT solutions and transform through innovative technology
(Microsoft Corporation 2010f). In brief, NOGs made productivity and overall effectiveness increasing,
and enlarge goods and services to communities in need (Microsoft Corporation 2010f).
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Similarly, nowadays, number of Microsoft employees is more than 56,104 in the world (Microsoft
Corporation 2004). Microsoft is providing Microsoft Poll (MS Poll) for feedback, suggestions that is
presented to their employees who in an unbiased manner (Microsoft Corporation 2010). Cusumano and
Selby (1995,21) discuss that Microsoft should find smart and knowledgeable employees, people who like
to become Microsoft's employees that should be experience in work, skills and passions (Microsoft
Careers Australia 2010). Thus, employment opportunities had increased as Microsoft provides job
opportunity to society as well. Specially, Microsoft's employees make an extraordinary impact by
engaging with their communities, and also provided several programs to support their worker done well
and balance work with their working such as giving programs, volunteering program, united way loaned
executive program and work with Microsoft volunteers (Microsoft Corporation 2010). Most of these
programs are relating strategic community and connecting to local communities. For an example,
Microsoft in Canada promotes a productive work environment by supporting the diversity of its
workforce, and dedicated to affording equal employment opportunity to their employees and applicants
(Microsoft Careers Canada 2010). Therefore, Microsoft should provide training to employees to improve
skills as soon as possible.

More importantly, Work Life balance play on important role in employee's management as the idea of
Microsoft from employees are most valued asset (Microsoft Corporation 2010). Hence, Microsoft affords
more flexible programs, tools and resource to help their workers in order to balance between job and
personal life (Microsoft Corporation 2010). In the same way, Microsoft also has provided more programs
for their employees that including flexible work arrangements, financial planning, employees
development, long term care for extended family members, and so on (Microsoft Corporation 2010).
These programs will been helping Microsoft's employees to engage in a challenging career and balance
their Work Life needs, so that Microsoft Company has to create a healthy, flexible and productive work
environment (Microsoft Corporation 2010). As employees of Microsoft Company have to work well, thus
able to deliver the best goods and services for society. CEO of Microsoft said that employee's
responsibility is an important for understanding and complying with the Standard of Business Conduct,
applicable government regulations and Microsoft policies as well (Ballmer 2009).
In addition, safety and security is compulsory needed for Microsoft. As software company of Microsoft is
promoting a safe online experience and protecting personal and business data of users that is in order to
make more users safety and raise online trust (Microsoft Corporation 2008). Particularly, safety and
security is not an easy problem for Microsoft, its must attain these approach including developing
innovative technology solutions, enforcement, effective legislation and so on (Microsoft Corporation
27

2008). Similarly, security for virus hinder the development of Microsoft, so that, Microsoft founded in
experience as the purpose of Microsoft Security Response Alliance (MSRA) is developing a strong,
valuable alliances that allowed secure response for improvement Microsoft security and
products.(Microsoft Corporation 2010). Besides, as a global company, Microsoft has been produce more
products in the society for consumers such as business software, developer tools, entertainment,
hardware, home and education software, and more. Today's most of people are using products of
Microsoft to complete their job as well as good. On the other hand, the report of Financial data since year
2005 until year 2009, all of data are increasing for each year except the year 2009 that the revenue,
operating, net income and undiluted earnings per share was decreasing (Microsoft Corporation 2009).
Besides, inventory are no inventory carried by Microsoft, because its product sold out efficiently, and also
the debt of Microsoft is free, there is no long and short term debt in this case (Kennon). It is an impossible
Microsoft that encountered the issue of bankruptcy (Kennon)
As a global company, CEO of Microsoft, Steve Ballmer said that "Addressing global warming is a
responsibility we take very seriously at Microsoft (Microsoft Corporation 2009)". Software and
technology would help business and people around the world to improve the environment (Microsoft
Corporation 2009). The purpose of Microsoft is to decrease the impact of their operations and products,
and to drive responsible environmental leadership (Microsoft Corporation 2009). Today's Microsoft is the
challenges of IT business, data centre manager and industry, Microsoft was practicing for several years
that in order to protect the environment and helps teams aligned with ten core strategies and goals such as
focus on effective resource utilization drive quality up through compliance, embrace change management
and another seven core strategies and goals (Microsoft Corporation 2009). For instant case, the objective
of Microsoft's meeting is to know whether the new management skills are developed and professional
relationship are strengthened, as Microsoft can analysis on professional development and culture to make
decision (Microsoft Case Study 2008). On May 2008, Microsoft Australia Changed the format in order to
satisfied competing needs that achievement such as maximizing customer-facing time to increase the
productivity sales, support and market teams, reduce travel and entertainment expenses and reduce their
carbon footprint, and also support from information technology during the meeting (Microsoft Case Study
2008).

28

Definition Of Marketing Strategies

Definition:- Marketing is the management process responsible for identifying,


anticipating and satisfying customer requirements profitably

A marketing strategy is a process that can allow an organization to concentrate its limited resources on the
greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing
strategy should be cantered around the key concept that customer satisfaction is the main goal.
A marketing strategy is most effective when it is an integral component of corporate strategy, defining
how the organization will successfully engage customers, prospects, and competitors in the market arena.
Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a
company's revenue, marketing strategy is closely linked with sales. A key component of marketing
strategy is often to keep marketing in line with a company's overarching mission statement.
A marketing strategy can serve as the foundation of a marketing plan. A marketing plan contains a set of
specific actions required to successfully implement a marketing strategy. For example: "Use a low cost
product to attract consumers. Once our organization, via our low cost product, has established a
relationship with consumers, our organization will sell additional, higher-margin products and services
that enhance the consumer's interaction with the low-cost product or service."
A strategy consists of a well thought out series of tactics to make a marketing plan more effective.
Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market
needs and reach marketing objectives. Plans and objectives are generally tested for measurable results.
A marketing strategy often integrates an organization's marketing goals, policies, and action sequences
(tactics) into a cohesive whole. Similarly, the various strands of the strategy, which might include
advertising, channel marketing, internet marketing, promotion and public relations can be orchestrated.
Many companies cascade a strategy throughout an organization, by creating strategy tactics that then
become strategy goals for the next level or group. Each one group is expected to take that strategy goal
and develop a set of tactics to achieve that goal. This is why it is important to make each strategy goal
measurable.

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Description of Marketing Strategies

The definition of marketing rightly emphasizes the focus of marketing on the customer, while at the same
time implying a need to link to other business operations to achieve profitability. This definition
highlights four questions which need to be included within marketing plans:

Identifying how can we define groups of customers as market segments and personas?

Anticipating How can we use market research to identify changing and future customers
needs and wants?

Satisfying how can we assess the drivers of customer satisfaction which encourage customer
loyalty and recommendations?

Profitably how do we select the right mix of services and marketing communications using
different channels to maximise our return-on-investment?

Types of Marketing:-

1. Social Marketing- It refers to the design, implementation and control of programs to increase the
acceptability of a social cause or practice among people e.g. No Smoking campaign in Delhi University,
publicity campaign for casting vote.

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2. Augmented Marketing:-It refers to providing additional services by way of innovative offerings and
benefits to the customers to increase his level of satisfaction e.g. free home delivery service by
Supermarkets.

3. Direct Marketing:-Marketing through various advertising media that interact directly with consumers,
generally calling for the consumer to make a direct response, e.g. Catalogue Selling, Mail-order, Telecalling and TV shopping.

4. Relationship Marketing: - Marketing through creating, maintaining and enhancing strong long-term
relationships with customers in order to win his loyalty e.g. a restaurant can build relationships with
customers by sending him wishes and discount offers on his birthdays.

5. Services Marketing: - It is applying the concepts, tools and techniques of marketing to services like
banking, insurance, retailing, educational etc.

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6. Person Marketing: - It consists of activities undertaken to create, maintain or change attitudes or


behaviour towards particular people like politicians, sports stars, film stars, professionals to promote their
careers and income.

7. Organisation Marketing: - It consists of activities undertaken to create, maintain or change attitudes


and behaviour of target audiences towards an organisation.

8. Place Marketing:-Place marketing involves activities undertaken to create, maintain, or change


attitudes and behaviour towards particular places e.g. tourism marketing.

9. Differential Marketing:-A market-coverage strategy in which a firm decides to target different markets
through different strategies or offers e.g. Hindustan Unilever offers different types and qualities soaps for
different markets and customers.

10. Synchro Marketing: - It refers to balancing the fluctuations in irregular demand for a product due to
seasons, timings etc, through flexible pricing, promotion and other incentives e.g. heavy off-season
discount on woollens may increase its demand to some extent.

11. Concentrated Marketing: - A market-coverage strategy in which a firm focuses on only one or few
markets.

12. De-marketing:- Marketing strategies to reduce demand temporarily or permanently, not to destroy
demand but only to shift it e.g. Super stores may offer no discounts on Saturdays, Sundays and holidays
to reduce overcrowd.

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Review of Literature
In 2014 Microsoft increased its marketing budget to 10% compared to the previous year to reach $1.4
billion reflecting advertising of Windows 8 and Surface.Since the appointment of Satya Nadella as CEO
Microsoft marketing strategy has changed to become less hostile abandoning kinds of advertising that
attacked competitors in a direct manner. For example, a marketing campaign known as Scroogled!
launched in 2012 informed about Googles decision to display paid advertisements to search results
related to shopping. Scroogled was launched to ensure the shift of some Google users to use
Microsofts Bing search engine, but Nadella stopped this and some other similar campaigns as an attempt
to improve the image of the company. Viral marketing represents another technique effectively integrated
within Microsoft marketing strategy. Most notably, viral marketing video for Xbox featuring Liverpool
midfielder Steven Gerrard and Spock actor Zach Quinto has proved to be highly successful. It has been
estimated that one out of 34 people who watched this video shared it, further contributing to its growing
success. Another noteworthy example of Microsofts use of viral marketing relates to Skype Opera, where
animated characters illustrate its functions and capabilities in an entertaining manner.

Advertising
Print and media advertising is placed at the core of Microsoft marketing strategy. As illustrated in Figure
2 below, Microsofts print and media advertising campaigns make an appeal to needs, wishes and
aspirations of target customer segment and positions Microsoft products and services as efficient tools to
be used to satisfy them. Some of Microsofts TV advertisements such as the apps you want 30-second
commercial that promotes unified Windows Store within Windows Phone and Windows 8 have become
viral videos in social networking sites mainly due to engaging presentation of information. Moreover, as
an unprecedented move the company has placed a Wi-Fi-Enabled print advertising promotion in a special
edition of Forbes magazine targeting a selected group of subscribers. Ultra-thin router and battery placed
within pages of magazine granted the possibility of free internet browsing for about 3 hours.

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Sales Promotion
Sales promotion is used by Microsoft in a frequent manner in both store formats physical and online.
Sales promotions are facilitated via temporary price reductions, coupons and trade-ins of other products.
Depending on the impact of a wide range of internal and external factors and according to its marketing
strategy, Microsoft introduces sales promotions in relation to all products categories in general during
festive or any other special periods or the company may introduce sales promotions in relation to selected
product categories only.

Range of the most notable sales promotion techniques previously employed by Microsoft include
securing $650 price reduction for a brand-new Surface Pro 3 tablet if customers trade in a MacBook Air
laptop sales productivity campaign offering combined price of $65 monthly for Office 365 Enterprise E3,
Power BI and CRM Online Professional business solutions. Microsofts online sales promotions are
announced within DEALS part of Microsoft online store.

Microsoft Corporation Report contains more detailed analysis of Microsoft marketing strategy
covering issues of Microsofts public relations, events and experiences and direct selling. The
report also comprises application of SWOT, PESTEL, Porters Five Forces and Value-Chain
Analyses on Microsoft, along with analysis of companys approach towards Corporate Social
Responsibility (CSR).

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Company Profile (Microsoft)

Microsoft Corporation-

Leading developer of personal-computer software systems and applications. The company also publishes
books and multimedia titles, offers e-mail services, and sells electronic game systems, computer
peripherals (input/output devices), and portable media players. It has sales offices throughout the world.
In addition to its main research and development center at its corporate headquarters in Redmond,
Washington, U.S., Microsoft has opened research labs in Cambridge, England (1997) Beijing, China
(1998) Aachen, Germany (2003) Sadashivnagar, Bangalore, India (2005) Cairo, Egypt (2006) Cambridge,
Massachusetts (2008) Herzliyya, Israel (2011) and New York, New York (2012).

35

Founding and Early Growth:In 1975 Bill Gates and Paul G. Allen, two boyhood friends from Seattle, converted BASIC, a popular
mainframe computer programming language, for use on an early personal computer (PC), the Altair.
Shortly afterward, Gates and Allen founded Microsoft, deriving the name from the
words microcomputer and software. During the next few years, they refined BASIC and developed other
programming languages. In 1980International Business Machines Corporation (IBM) asked Microsoft to
produce the essential software, or operating system, for its first personal computer, the IBM PC.
Microsoft purchased an operating system from another company, modified it, and renamed it MSDOS (Microsoft Disk Operating System).MS-DOS was released with the IBM PC in 1981. Thereafter,
most manufacturers of personal computers licensed MS-DOS as their operating system, generating vast
revenues for Microsoft; by the early 1990s it had sold more than 100 million copies of the program and
defeated rival operating systems such as CP/M, which it displaced in the early 1980s, and later IBM
OS/2. Microsoft deepened its position in operating systems with Windows, a graphical user
interface whose third version, released in 1990, gained a wide following. By 1993, Windows 3.0 and its
subsequent versions were selling at a rate of one million copies per month, and nearly 90 percent of the
worlds PCs ran on a Microsoft operating system. In 1995 the company released Windows 95, which for
the first time fully integrated MS-DOS with Windows and effectively matched in ease of use Apple
Computers Mac OS. It also became the leader in productivity software such as wordprocessing and spreadsheet programs, outdistancing long-time rivals Lotus and WordPerfect in the
process.
Microsoft dramatically expanded its electronic publishing division, created in 1985 and already notable
for the success of its multimedia encyclopaedia, Encarta. It also entered the information services and
entertainment industries with a wide range of products and services, most notably the Microsoft Network
and MSNBC (a joint venture with the National Broadcasting Company, a major American television
network).
As a result, by the mid-1990s Microsoft, which became a publicly owned corporation in 1986, had
become one of the most powerful and profitable companies in American history. It consistently earned
profits of 25 cents on every sales dollar, an astonishing record. In the companys 1996 fiscal year, it
topped $2 billion in net income for the first time, and its unbroken string of profits continued, even during
the Great Recession of 200809 (its net income had grown to more than $14 billion by fiscal year 2009).
However, its rapid growth in a fiercely competitive and fast-changing industry spawned resentment and
jealousy among rivals, some of whom complained that the companys practices violated U.S. laws against
unfair competition. Microsoft and its defenders countered that, far from stifling competition and technical
36

innovation, its rise had encouraged both and that its software had consistently become less expensive and
more useful. A U.S. Justice Department investigation concluded in 1994 with a settlement in which
Microsoft changed some sales practices that the government contended enabled the company to unfairly
discourage OS customers from trying alternative programs. The following year the Justice Department
successfully challenged Microsofts proposed purchase of Intuit Inc., the leading maker of financial
software for the PC.

Chasing The Internet:Partly because of its stunning success in PC software, Microsoft was slow to realize the commercial
possibilities of network systems and the Internet. In 1993 it released Windows NT, a landmark program
that tied disparate PCs together and offered improved reliability and network security. Sales were initially
disappointing, but by 1996 Windows NT was being hailed as the likely standard for PC networking,
quickly surpassing Novells NetWare in market share. Microsoft did not move into Internet software until
a new venture, Netscape Communications Corp., had introduced Navigator, a Web browser program that
simplified the once-arcane process of navigating the World Wide Web. In a violent change of course,
Microsoft quickly developed its own browser, Internet Explorer, made it free, and moved aggressively to
persuade computer makers and Internet service providers to distribute it exclusively. By 1996 Microsoft
was bundling Explorer with Windows OS and had begun the process of integrating Explorer directly into
Windows. In response, Netscape accused Microsoft of violating its 1995 consent decree and sued; those
efforts helped to persuade the U.S. Department of Justice to reopen a broad investigation of Microsoft.
In 1999, following a trial that lasted 30 months, a judge found Microsoft in violation of the Sherman
Antitrust Act and ordered the breakup of the company. In 2001 an appeals court overturned the breakup
order but still found the company guilty of illegally trying to maintain a monopoly. The companys legal
woes continued in 2004: the European Union (EU) levied the largest fine in the organizations history,
497.2 million ($611 million), in retaliation for what were described as Microsofts near-monopoly
practices. In February 2008 the EU imposed an even higher fine, 899 million ($1.35 billion), on the
company for having defied the EUs 2004 antitrust decision against Microsoft for illegally bundling
multimedia software with its Windows operating system to the exclusion of competitors.

37

Entry into Gaming and Mobile Phone Market:In 2001 Microsoft released the Xbox, an electronic game console that quickly captured second place in
the video gaming market. In 2002 Microsoft launched Xbox Live, a broadband gaming network for its
consoles. A more powerful gaming console, the Xbox 360, was released in 2005. In an intensely
competitive market, where the Xbox faced strong pressure from the Nintendo Wii and Sony PlayStation,
Microsoft struggled through the years to make consistent profits from its console. For example, in 2009
the company cut the price of the Xbox 360 Elite by as much as 25 percent in order to pick up market
share. The move was successful; by 2010 the Xbox 360 was the most-used game console in the American
home. But at the same time, the price cuts also led to a 6 percent drop in revenue in Microsofts
Entertainment and Devices Division (EDD).
Other EDD products also struggled. The Zune family of portable media players introduced in 2006 failed
to challenge the market dominance of Apples iPod. The Windows Mobile OS, used in smartphones made
by a variety of vendors, including HTC, LG, Motorola, and Samsung, trailed in market share in the
United States behind Research in Motions BlackBerry and Apples iPhone. In 2009 Microsoft ceased
publishing online and disc versions of its Encarta encyclopaedia, but its dictionary of the same name was
still available online.

Further Development in Operating System:Microsoft began planning a major replacement for all of its operating systems in 2001. The project, codenamed Longhorn, encountered numerous delays, in part because of efforts to address the publics growing
concern with computer security and consumers desire for PCs to have greater integration with a full
range of entertainment equipment within the modern electronic home. The company started over, and the
new operating system, renamed Vista, was released to other software developers late in 2006 and to the
general public in 2007. Like most new operating systems, Vista met with initial problems involving
incompatibilities with older computer peripherals. More problematic for the new operating system was its
bloated structure, which required a very fast microprocessor and large amounts of dedicated computer
memory for proper functioning. Its high threshold for adequate system resources deterred many
companies and individuals from upgrading systems from earlier, and perfectly serviceable, systems such
as Windows XP (derived from the term Windows Experience). In addition, consumers were baffled by the
numerous Vista optionsHome (Basic or Premium), Ultimate, Business, and otherswhile business
users (Microsofts core market) balked at its major change to the user interface and were unwilling to port
their internal applications to the new system.
38

Microsofts corporate users had other reasons to stick with Windows XP. Though still problematic
compared with other operating systems, XP was significantly more secure than its predecessors. XP was
also faster and much more stable than Windows 95 or 98, and it ran tens of thousands of software
programs written specifically for it, which made business users reluctant to switch operating systems. It
can be argued that customer satisfaction with XP is what killed Vista among business users. PC makers,
who were contractually required by Microsoft to ship products with Vista, were compelled to offer
downgrades from Vista to XP, and user appreciation even compelled Microsoft to extend its official
support of the older OS through 2014, three years beyond its normal support policies.
Adding to Microsofts OS problems was increased competition in the marketplace. Apples Mac OS X,
riding on the huge success of the iPhone and iPod consumer products, grew in popularity. Linux, long an
operating system for the technically adept, began to appear in more user-friendly versions, such as
Ubuntu, and by the end of the first decade of the 21st century, Linux had captured one-third of the
growing low-cost netbook market. Yet, despite its problems in the marketplace, Microsoft remained the
dominant supplier of operating systems. Windows held a worldwide market share of 86 to 92 percent,
depending on the research analysis. With the release in 2009 of Windows 7, the replacement for Vista, to
critical praise by reviewers and analysts, Microsofts lead remained intact.

Following the release of Windows Phone, Microsoft underwent a gradual rebranding of its product range
throughout 2011 and 2012the corporation's logos, products, services, and websites adopted the
principles and concepts of the Metro design language. Microsoft previewed Windows 8, an operating
system designed to power both personal computers and tablet computers, in Taipei in June 2011. A
developer preview was released on September 13, and was replaced by a consumer preview on February
29, 2012. On May 31, 2012, the preview version was released.
On June 18, 2012, Microsoft unveiled the Surface, the first computer in the company's history to have its
hardware made by Microsoft. On June 25, Microsoft paid US $1.2 billion to buy the social
network Yammer. On July 31, 2012, Microsoft launched the Outlook.com webmail service to compete
with Gmail. On September 4, 2012, Microsoft released Windows Server 2012.
In July 2012, Microsoft sold its 50% stake in MSNBC.com, which it had run as a joint venture with NBC
since 1996. On October 1, Microsoft announced its intention to launch a news operation, part of a newlook MSN, at the time of the Windows 8 launch that was later in the month. On October 26, 2012,
Microsoft launched Windows 8 and the Microsoft Surface. Three days later, Windows Phone 8 was
launched. To cope with the potential for an increase in demand for products and services, Microsoft
39

opened a number of "holiday stores" across the U.S. to complement the increasing number of "bricks-andmortar" Microsoft Stores that opened in 2012.On March 29, 2013, Microsoft launched a Patent Tracker.
The Kinect, the motion sensing input devices by Microsoft, which was first introduced in November 2010
was upgraded for the 2013 release of the eighth-generation Xbox One. Its capabilities were revealed in
May 2013. The new Kinect uses an ultra-wide 1080p camera, it can function in the dark due to an infrared
sensor, it employs higher-end processing power and new software, it can distinguish between fine
movements (such as a thumb movements), and the device can determine a user's heart rate by looking at
his/her face. Microsoft filed a patent application in 2011 that suggests that the corporation may use the
Kinect camera system to monitor the behaviour of television viewers as part of a plan to make the
viewing experience more active. On July 19, 2013, Microsoft stocks suffered its biggest one-day
percentage sell-off since the year 2000 after its fourth-quarter report raised concerns among the investors
on the poor showings of both Windows 8 and the Surface tablet; with more than 11 percentage points
declining Microsoft suffered a loss of more than US$32 billion. For the 2010 fiscal year, Microsoft had
five product divisions: Windows Division, Server and Tools, Online Services Division, Microsoft
Business Division, and Entertainment and Devices Division.

On September 3, 2013, Microsoft agreed to buy Nokia's mobile unit for $7 billion. Also in 2013, Amy
Hood became the CFO of Microsoft
The Alliance for Affordable Internet (A4AI) was launched in October 2013 and Microsoft is part of the
coalition of public and private organizations that also includes Facebook, Intel and Google. Led by Tim
Berners-Lee, the A4AI seeks to make Internet access more affordable so that access is broadened in the
developing world, where only 31% of people are online. Google will help to decrease internet access
prices so that they fall below the UN Broadband Commission's worldwide target of 5% of monthly
income.
In line with the maturing PC business, in July 2013, Microsoft announced that it would reorganize the
business into four new business divisions by function: Operating System, Apps, Cloud and Devices. All
previous divisions will be diluted into new divisions without any workforce cut.
On February 4, 2014, Steve Ballmer stepped down as CEO of Microsoft and was succeeded by Satya
Nadella, who previously led Microsoft's Cloud and Enterprise division. On the same day, John W.
Thompson took on the role of chairman, with Bill Gates stepping down from the position to become more
active within the company as Technology Advisor.

40

On April 25, 2014, Microsoft acquired Nokia Devices and Services and formed a new subsidiary,
Microsoft Mobile Os.
On September 15, 2014, Microsoft acquired the video game development company Mojang for $2.5
billion, best known for its wildly popular flagship game Minecraft. On January 21, 2015, Microsoft
announced the release of their first Interactive whiteboard, The Surface Hub. (Part of the Surface family)
In Q1 2015, Microsoft is the third largest maker of mobile phones selling 33 million units (7.2% of all),
while a large majority (at least 75%) of them do not run any version of Windows Phone those other
phones are not categorized as smartphones by Gartner in the same time frame 8 million Windows
smartphones (2.5% of all smartphones) where made by all manufacturers (but mostly by Microsoft)

Microsoft Competitors :The Windows operating system faces competition from various software products and from alternative
platforms and devices, mainly from Apple and Google. We believe Windows competes effectively by
giving customers choice, value, flexibility, security, an easy-to-use interface, compatibility with a broad
range of hardware and software applications, including those that enable productivity, and the largest
support network for any operating system.
Competitors to the versions of Office included in D&C Licensing include global application vendors such
as Apple and Google, numerous web-based competitors, and local application developers in Asia and
Europe. Apple distributes versions of its pre-installed application software, such as email, note taking, and
calendar products, through its PCs, tablets, and phones. Google provides a hosted messaging and
productivity suite and distributes its productivity services through the Android and Chrome operating
systems. Web-based offerings competing with individual applications can also position themselves as
alternatives to our products. We believe our products compete effectively based on our strategy of
providing powerful, flexible, secure, and easy to use solutions that work across a variety of devices.
Windows Phone operating system faces competition from I-OS, Android, and Blackberry operating
systems. Windows Phone competes based on differentiated user interface, personalized applications,
compatibility with Windows PCs and tablets, and other unique capabilities.
Our Xbox Platform competes with console platforms from Sony and Nintendo, both of which have a
large, established base of customers. The lifecycle for gaming and entertainment consoles averages five to
ten years. Nintendo released their latest generation console in November 2012. Sony released their latest
41

generation console in November 2013.

We believe the success of gaming and entertainment consoles is determined by the availability of games
for the console, providing exclusive game content that gamers seek, the computational power and
reliability of the console, and the ability to create new experiences via online services, downloadable
content, and peripherals. In addition to Sony and Nintendo, we compete with other providers of
entertainment services through online marketplaces. We believe the Xbox Platform is effectively
positioned against competitive products and services based on significant innovation in hardware
architecture, user interface, developer tools, online gaming and entertainment services, and continued
strong exclusive content from our own game franchises as well as other digital content offerings.

Surface devices face competition from computer, tablet, and other hardware manufacturers, many of
which are also current or potential partners and customers.
Our phones face competition primarily from Samsung and Apple, as well as many other mobile device
manufacturers. We believe our phones will compete by being tailored for virtually every demographic
and geography worldwide, offering unique industrial design and imaging technologies at high and low
ranges of price points, and by incorporating Microsofts digital work and digital life experiences.
We face competition for our Resale products and services from various online marketplaces, including
those operated by Amazon, Apple, and Google.
Our search and display advertising business competes with Google and a wide array of websites, social
platforms like Facebook, and portals like Yahoo! that provide content and online offerings to end users.
Our success depends on our ability to attract new users, understand intent, and match intent with relevant
content and advertiser offerings. We believe we can attract new users by continuing to offer new and
compelling products and services. We differentiate our offerings by providing a broad selection of content
that helps users make faster, informed decisions, and take action more quickly by providing relevant
search results, expanded search services, and deeply-integrated social recommendations.

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Competitors to Office 365 Consumer are the same as those discussed above for Office Consumer.

Competitors to Studios are the same as those discussed above for our Xbox gaming and entertainment
business, as well as game studios like Electronic Arts and Activision Blizzard.
Our server operating system products face competition from a wide variety of server operating systems
and applications offered by companies with a range of market approaches. Vertically integrated computer
manufacturers such as Hewlett-Packard, IBM, and Oracle offer their own versions of the UNIX operating
system preinstalled on server hardware. Nearly all computer manufacturers offer server hardware for the
Linux operating system and many contribute to Linux operating system development. The competitive
position of Linux has also benefited from the large number of compatible applications now produced by
many commercial and non-commercial software developers. A number of companies, such as Red Hat,
supply versions of Linux.
We compete to provide enterprise-wide computing solutions and point solutions with numerous
commercial software vendors that offer solutions and middleware technology platforms, software
applications for connectivity (both Internet and intranet), security, hosting, database, and e-business
servers. IBM and Oracle lead a group of companies focused on the Java Platform Enterprise Edition that
compete with our enterprise-wide computing solutions. Commercial competitors for our server
applications for PC-based distributed client/server environments include CA Technologies, IBM, and
Oracle. Our web application platform software competes with open source software such as Apache,
Linux, MySQL, and PHP. In middleware, we compete against Java middleware such as Geronimo, Wild
fly, and Spring Framework.
Our system management solutions compete with server management and server virtualization platform
providers, such as BMC, CA Technologies, Hewlett-Packard, IBM, and VMware. Our database, business
intelligence, and data warehousing solutions offerings compete with products from IBM, Oracle, SAP,
and other companies. Our products for software developers compete against offerings from Adobe, IBM,
and Oracle, other companies, and open-source projects, including Eclipse (sponsored by CA
Technologies, IBM, Oracle, and SAP), PHP, and Ruby on Rails, among others.
Our embedded systems compete in a highly fragmented environment in which key competitors include
IBM, Intel, and versions of embeddable Linux from commercial
Linux vendors such as Metrowerks and MontaVista Software.
We believe our server products provide customers with advantages in performance, total costs of
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ownership, and productivity by delivering superior applications, development tools, compatibility with a
broad base of hardware and software applications, security, and manageability.
Competitors to Windows Commercial are the same as those discussed above for Windows in the D&C
Licensing segment.
Office Commercial revenue growth depends on our ability to add value to the core product set and to
continue to expand our product offerings in other areas such as content management, enterprise search,
collaboration, unified communications, and business intelligence. Competitors to Office Commercial
includes software application vendors such as Adobe Systems, Apple, Cisco Systems, Google, IBM,
Oracle, SAP, and numerous web-based competitors as well as local application developers in Asia and
Europe. Cisco Systems is using its position in enterprise communications equipment to grow its unified
communications business. Google provides a hosted messaging and productivity suite. Web-based
offerings competing with individual applications can also position themselves as alternatives to our
products. We believe our products compete effectively based on our strategy of providing powerful,
flexible, secure, easy to use solutions that work well with technologies our customers already have and
are available on a device or via the cloud.
Skype competes with a variety of instant messaging, voice, and video communication providers, ranging
from start-ups to established enterprises.
Our Microsoft Dynamics products compete with vendors such as Oracle and SAP in the market for large
organizations and divisions of global enterprises. In the market focused on providing solutions for small
and mid-sized businesses, our Microsoft Dynamics products compete with vendors such as Infor, The
Sage Group, and NetSuite. Salesforce.coms cloud CRM offerings compete directly with Microsoft
Dynamics CRM on-premises offerings.

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Research Methodology

The Research Methodology Used Is Descriptive Research And Netnography.


Descriptive research is used to describe characteristics of a population or phenomenon being studied. It
does not answer questions about how/when/why the characteristics occurred. Rather it addresses the
"what" question (what are the characteristics of the population or situation being studied) the
characteristics used to describe the situation or population are usually some kind of categorical scheme
also known as descriptive categories. For example, the periodic table categorizes the elements. Scientists
use knowledge about the nature of electrons, protons and neutrons to devise this categorical scheme. We
now take for granted the periodic table, yet it took descriptive research to devise it. Descriptive research
generally precedes explanatory research. For example, over time the periodic tables description of the
elements allowed scientists to explain chemical reaction and make sound prediction when elements were
combined.
Hence, descriptive research cannot describe what caused a situation. Thus, descriptive research cannot be
used to as the basis of a causal relationship, where one variable affects another. In other words,
descriptive research can be said to have a low requirement for internal validity.
The description is used for frequencies, averages and other statistical calculations. Often the best
approach, prior to writing descriptive research, is to conduct a survey investigation. Qualitative
research often has the aim of description and researchers may follow-up with examinations of why the
observations exist and what the implications of the findings are.

Netnography is the branch of ethnography that analyses the free behaviour of individuals on the Internet
that uses online marketing research techniques to provide useful insights. The word netnography comes
from Internet and ethnography and was a process and term coined by Robert Kozinets. As a method,
netnography can be faster, simpler, and less expensive than ethnography, and more naturalistic and
unobtrusive than focus groups or interviews (Kozinets, 2009, del Fresno, 2011, del Fresno 2014).
Netnography is similar to an ethnography in five ways:

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1. It is naturalistic
2. It is immersive
3. It is descriptive
4. It is multi-method
5. It is adaptable

It provides information on the symbolism, meaning, and consumption patterns of online consumer groups
(Kozinets, 2010) or online communities consumption unrelated but online sociability based on the
exchange of information (del Fresno, 2011). Netnography is focused on cultural, symbolic information
insights.

Advantages and Limitations Of Nenotgraphy :- Compared to surveys, experiments, focus groups,


and personal interviews, netnography can be less obtrusive. It is conducted using observations in a
context that is not fabricated by the researcher. Netnography also is less costly and timelier than focus
groups and personal interviews.
The limitations of netnography draw from its more narrow focus on online communities, its inability to
offer the full and rich detail of lived human experience, the need for researcher interpretive skill, and the
lack of informant identifiers present in the online context that leads to difficulty generalizing results to
groups outside the online community sample. However, these limitations can be ameliorated somewhat
by careful use of convergent data collection methods that bridge offline and online research in a
systematic manner (Kozinets 1998, 2002). Researchers wishing to generalize the findings of a
netnography of a particular online group to other groups must apply careful evaluations of similarity and
consider using multiple methods for research triangulation. Netnography is still a relatively new method,
and awaits further development and refinement at the hands of a new generation of Internet-savvy
ethnographic researchers. However, several researchers are developing the techniques in social
networking sites, virtual worlds, mobile communities, and other novel computer-mediated social
domains.

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Result And Discussion / Recommendation

Marketing Strategies: Strategic planning in marketing is concerned about the overall direction of the business. But it also involves
decision-making about production and operations, finance, human resource management and other business
issues. The objective of a strategic plan is to set the direction of a business and create its shape so that the
products and services it provides meet the overall business objectives. Marketing has a key role to play in
strategic planning, because it is the job of marketing management to understand and manage the links
between the business and the environment. The challenge faced by marketing management in a
multinational business, with hundreds of business units located around the globe, producing a wide range
of products. In this situation, management keep control of marketing decision-making in such a complex
organisation. And all of this will need a well-organised marketing planning.

The important of marketing strategy:It provides direction and momentum to the organisation, encouraging new ideas, and also developing a
sustainable competitive advantage. In construction companies, step of strategies use can be different and
they need to analyse the most effective way to achieve objectives. Therefore choice of the strategies
should be choosing correctly and they must be carefully analysed on the cost and the benefits inherent in
the implementation of each.

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Process that need to be taken in choosing strategies

To start a mission and vision the company need to defines a long-term aspiration. It explains why we need
to do it, what are we doing and the ultimate good we want to achieve through our success. Think of own
vision as the picture of where we ultimately want our work to lead us.

The survey of the environment of the company need to be done and determine the exterior parameters
such as the general market attributes, characteristics of competition, and others. Then a survey of various
internal parameters of its activities such as the production process and the related activities and other
identified factor and enumerated factor.

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Next, is establish the grand strategies for the companies, normally SWOT analysis can be effective. It is
a general tool designed to be used in the preliminary stages of decision-making and as a precursor to
strategic planning in various kinds of application. On other hand, a company can establish their grand
strategies by growth strategies:
1. Improve an existing product or service to attract more buyers.
2. Increase its promotion and marketing efforts to try to expand its market share
3. Or expand its operations, as in taking over distribution or manufacturing previously handled by
someone else
4. Expand into new product or services.
5. Acquire similar or complementary businesses.
6. It can merge with another company to form a larger company.
It can either by using stabilities strategies:
1. Non-change strategy
2. Little-change strategies
By using defensive strategy:
1. Reduce costs
2. Sell off assets
3. Gradually phase out lines or services
4. Divest part of its business
5. Declare bankruptcy
6. Attempted a turnaround

What is SWOT analysis


In a study by (Pearce 1992), SWOT analysis is described as a methodology allowing enterprises to
understand and plan to use their strengths to exploit opportunities, to recognize and repair or avoid their
weaknesses, and to defend against or sidestep any known threats. It is commonly accepted that an
enterprises strengths and weaknesses demonstrate the enterprises internal characteristics and are
controllable and that an enterprises opportunities and threats are determined by external factors on which
the enterprise has no direct control but can react to its own advantage. (Porter 1989) introduced a factor
analysis method. By using this method, factors affecting an enterprises SWOT are grouped into proles
of assets, skills relative to competitors, and the competitive environment with its attendant risks and
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potential rewards. This method has been widely quoted in previous studies on business competitiveness
and found to be effective.

Strengths
The Strengths can be considered as anything that is favorable towards the business for example:
1. Currently in a good financial position (few debts, etc)
2. Skilled workforce (little training required)
3. Company name recognized on a National/Regional/Local level
4. Latest machinery installed
5. Own premises (no additional costs for renting)
6. Excellent transport links (ease of access to/from the Company)
7. Little/non-threatening competition

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Weaknesses:Recognizing the Weaknesses will require you being honest and realistic. Dont leave anything out as this
is an important part as to realize what needs to be done to minimize this list in the future. Here are a few
examples:
1. Currently in a poor financial position (large debts, etc)
2. Un-Skilled workforce (training required)
3. Company name not recognized on a National/Regional/Local level
4. Machinery not up to date (Inefficient)
5. Rented premises (Adding to costs)
6. Poor location for business needs (Lack of transport links, etc.)
7. Stock problems (currently holding too much/too little)
8. Too much waste

Opportunities
Keeping in mind what you have listed as your Company Strengths, SWOT Analysis can now influence
the Opportunities for the business. These can be seen as targets to achieve and exploit in the future for
example:
1. Good financial position creating a good reputation for future bank loans and borrowings
2. Skilled workforce means that they can be moved and trained into other areas of the business
3. Competitor going bankrupt (Takeover opportunity?)
4. Broadband technology has been installed in the area (useful for Internet users)
5. Increased spending power in the Local/National economy
6. Moving a product into a new market sector

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Threats
The final part of the analysis will also be seen as the most feared- the Threats. It has to be done and
therefore taking into account what you have listed as your weaknesses, the threats will now all seem too
clear. Examples
1. Large and increasing competition
2. Rising cost of Wages (Basic wage, etc.)
3. Possible relocation costs due to poor location currently held
4. Local authority refusing plans for future building expansion
5. Increasing interest rates (increases borrowing repayments, etc)
6. End of season approaching
7. Existing product becoming unfashionable or unpopular

Establish strategies by forecasting:By (Rob J Hyndman November 8, 2009) Forecasting is a common statistical task in business, where it helps
inform decisions about Scheduling of production, transportation and personnel, and provides a guide to
long-term strategic planning. However, business forecasting is often done poorly and is frequently confused
with planning and goals. They are three different things. Forecasting is about predicting the future as
accurately as possible, given all the information available including historical data and knowledge of any
future events that might impact the forecasts.
There are 2 type of forecasting:
1. Trend analysis a hypothetical extension of a past series of event into the future.
2. Contingency planning also known as scenario planning& scenario analysis is the creation of
alternative hypothetical but equally likely future conditions.

Formulate of strategy planning

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(Porter, 1985) Michael Porter argues that businesses must focus on areas of capability where they have a
distinct advantage relative to their competitors in their target markets. They need to concentrate on one type
of competitive advantage to achieve a distinct position in that market. Trying to be all things to all people
will not generate successes.

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