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Strategic Management Course Project Essay

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Section I – Microsoft’s Technology Strategy

“Global Diversity and Inclusion are integral to the vision, strategy, and business success of Microsoft. Microsoft officially formed the Office of Diversity & Inclusion in recognition of the fact that leadership in the global marketplace requires a corporate culture and an inclusive business environment where the best and brightest diverse minds—employees with varied perspectives, skills, and experiences—work together to meet consumer demands.” (Microsoft, Global Diversity and Inclusive) Technology strategy is one of the components that Microsoft embraced to achieve global marketplace leadership. That strategy was sanctioned by some of the dynamics that put Microsoft in advance of its players and these dynamics include (not all): cost saving technology, efficient collaboration, and effective solution. Saving Technology Cost:

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a) Adoption of private cloud
Microsoft wanted to decrease lab space server and bring together a new level of controlling and funding competence. The facility needed to be both competent and flexible adequate to support the inquiry and improvement request of the diverse invention sets, reason why Microsoft put up a high capacity that come across the needs of the inquiry and development to host the private clouds that offer infrastructure as a service (IaaS). This technology strategy diminished the track of on campus lab space, reduced the power consumption, reduce the number of physical systems and the amount of resources required to manage them (this is done by virtualization). The cost saving technology includes: Private cloud virtualization, Hyper-V, Storage area networks (SANs), and Infrastructure as a Service (IaaS)

b) Automation of data quality checks using MS visual studio and MS SQL Server Microsoft has dropped its expansion and testing stages by programing the data value checks and finding data value problems prior in the expansion sequence than before, using a metadata driven, customer configurable device. c) Windows 7 customers experience costs support reduction

The innovation of Windows 8 headed to a better customer support practice, ensuing in cut of Helpdesk costs. New diagnostic structures, better hardware and software compatibility, and the venture in self-service provision content braced an augmented approval rate.

Collaboration efficiency:

a) Microsoft Technology devices service, solution, and partnership satisfaction Microsoft has put in place a core technology data service that regularly listens to “100,000” personnel and “200” internal corporate associates. This service permits the technology tasks to control analytics from the data to enterprise developments and to safeguard solution, service, and partnership satisfaction.

b) SharePoint server2010 site governance and lifecycle administration implementation SharePoint Server 2010 environment rate was increasing exponentially and Microsoft needed formal lifecycle administration procedures to improve its technology strategy. The unchecked advance was exorbitant Microsoft’s technology strategy to manage and was adversely impacting the weight of search outcomes and making it tougher for customers to find content. Microsoft established and implemented “SharePoint governance” and “site lifecycle” administration policies to decrease cost, raise search applicability, and guarantee that information principles are met. By implementing this technology strategy, the information security level went up, search performance was improved and the number of inactive and uncontrolled sites was reduced. The technologies used are: SQL server reporting services and Microsoft SharePoint server 2010

c) Explosion of devices, apps, identities, and social technologies, in the work environment Employees are clouding the lines today, between their private lives and work. Individuals want to use their own devices to work, frequently outside of business periods, but also, they want the flexibility to exploit the same technologies strategies and applications at work that they use on their private time. Additionally, they presume this to be a constant, rich customer experience, without interruption when joining to their business networks. This unification of users and enterprise technologies has headed Microsoft to rethink its corporate models to stimulate agility and suppleness for their workers. At the same moments, this permits Microsoft to endure competitive by expressively increase its employees’ throughput and gratification.

Microsoft’s technology has introduced policies and measures that permit the union between individual’s private life and their work while concurrently safeguarding those valuable intellectual properties belonging to Microsoft are protected. The hybrid model of consumer-standard hardware and business-standard is supported by Microsoft and offers maintenance and data right of entry to workers who want to use their private devices, provided the minimum hardware necessities to those devices and workers to agree to varying stages of device administration. This strategy of bringing employees private device and their enterprise work together is solution by certain factors of security: Sustain severe security constraints while managing employee’s identities, so that employees can have right to access the corporate data and resources from a various array of devices. Allow employees to exploit on the social abilities and simplify collaboration that applications and electronic devices deliver, thus mixing their private lives and work. Request repeatedly what its employees want and need, mainly with respect to given that rich, operational requests for those devices.

Section II – Microsoft Core Competencies

“… Going forward, our strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.” (CEO Steve Ballmer, July 2013). To materialize this strategy, Microsoft has put together multiple components to form a strategy that is different from any other organization’s strategy to monopolize the marketplace. These multiple components wer sanctioned by certain number of tests to make sure if an innovation or a service is release, any other company can copy it. Some of those tests include:

Is it a significant source of competitive differentiation?
Does it provide a unique signature to the organization?
Does it make a significant contribution to the value a customer perceives in the end product? Does it transcend a single business?
Does it cover a range of businesses, both current and new? Is it hard for competitors to imitate? (MELISSA A SCHILLING 123-124)

In respond to those questions above, Bill Gates, the founder of Microsoft surrounded his firm with these seven (7) strategies mention below that became his business’s core competency. Concentrate your effort on a market with huge potential but few competitors Get in early and big

Strive to become the industry leader
Set the industry standard to become the industry leader
Make your product the best
Make your product the most useful
Make your product the cheapest
Establish a proprietary position – own what you sell – and protect this position Make your customers and strategic alliances offers they cannot refuse Continually invest in innovation to improve your products and services (100 Advice)

Even though Bill Gates built his kingdom on the products derived from the technology, Bill Gates’ business capability skills are higher than his technical skills and his competitive desire is immense dynamic force. Therefore, Microsoft’s core competency lies on two components (Business skills and Technological skills). The vital approach that aided Microsoft to accomplish outstanding growth in the race of computer business embraces product innovation, brand extension, substantial marketing, competitive robustness, and product enlargement.

Microsoft strives for marketing skills and software engineers. Earlier, Microsoft implemented a very comparable approach to Google’s, excluding its employees by modifying its way of dealing with the employee. Microsoft’s employees accepted less pay to join, Microsoft whose stock value was growing exponentially. When things changed around (stock value decreases), Microsoft changed its strategy direction to rise base and bonus form 45th percentile to 65th percentile of its challengers’ pay. Microsoft still retained its strong weight on stock-related return, but eradicated its ancient, broad-based stock preference plan in favor of stock allowances. Its benefits remain to lead the marketplace.

Microsoft monopolized the marketplace and the advertising industry in 2005 with the introduction of Xbox 360 which is a gaming console used to play various video games. It allows you to connect with others and play together without being in the same house/state. It also has a feature that allows you to play without a wired controller, but instead you are the controller (StudyMode.com).

One of the greatest well-known products would be Microsoft Solutions Framework (MSF) in term of software as one of component of Microsoft’s core competency. MSF is a set of software engineering developments, values, and confirmed practices planned to enable designers to accomplish success in the software development life cycle (SDLC). MSF offers a compliant direction, founded upon skills and best practices within and outside of Microsoft, to raise the chance of effective distribution of an information technology solution to the clients by working fast, reducing the number of workforce on the project team, preventing risks, while permitting excellent resolution.

Microsoft SharePoint is another greatest application (only “10” years old) with attributed features as follow: The value proposition of SharePoint 2010
SharePoint is the business collaboration platform for the enterprise and the Internet SharePoint enables your enterprise to: deliver the best productivity experience, cut costs with a unified infrastructure, and rapidly respond to business needs SharePoint does this by providing
capabilities (sites, communities, content, search, insights, and composites). SharePoint products and technologies

SharePoint Foundation 2010, SharePoint Server 2010 for Intranet Scenarios (standard or enterprise client access license)
Office Web Apps
FAST Search for SharePoint 2010
Developer Tools (Visual Studio 2010, SharePoint Designer 2010) Clients (Office client app, SharePoint workspace 2010, SharePoint Mobile) Servers (Duet Enterprise for Microsoft SharePoint and SAP, Project Server etc…) Sites

Content delivery
Content personalization
Manageability and scalability
Customization and extensibility
Interoperability and platform consolidation
Microsoft has extra solutions which comprising Customer Care, Services, Operations, etc.

Section III – Industry Dynamics

Microsoft finds itself in a new age of technology with customers who want to be always on, and always connected. New devices such as smart-phones and tablets, along with the growth of broadband and the mobile Internet allow people to apply technology to and do more in every part of their lives. Yet, the variation of devices and software used on each has caused technology to become more complex instead of becoming simpler. Microsoft intends to make its products and services operate similarly across all their devices.

To this end, Microsoft CEO Steve Ballmer announced the plan to reorganize the company. The announcement was met with both enthusiasm and skepticism. The goal of the reorganization is to make Microsoft more efficient and more innovative to be better able to compete with rivals like Google (Android) and Apple.

“Simply put, all parts of the company will share and contribute to the success of Microsoft’s core offerings: Windows, Windows Phone, Xbox, Surface, Office 365, Bing, Skype, Dynamics, Azure and Microsoft’s server products, Ballmer wrote. “We will see our product line holistically, not as a set of islands.”

Microsoft’s structure was previously comprised of five divisions. Those divisions were Business Division (which included MS Office), Online Services (Bing), Server & Tools (SQL Server and System Center), and Entertainment and Devices (Xbox).

The new structure consists of four engineering groups. The first is the Operating Systems Engineering Group, which will be run by Terry Myerson. This will include the OS work for mobile devices, PC, Back-end systems, consoles and core cloud services. The consolidation of the operating system for Windows, Windows Phone and the Xbox will improve user interface and be beneficial for application development.

The Devices and Studios Engineering Group is the second of the four groups. Hardware development, component purchasing for all Microsoft devices as well as control of the development of entertainment, music, video, and game development will all be managed by Julie Larson-Green.

The third group is the Applications and Services Engineering Group and is to be run by Qi Lu. Lu was previously the head of the Online Services division (Bing) but will now be responsible for Office, Skype and Bing. Windows 8 and Windows phone apps may also be part of this group’s responsibilities.

Microsoft’s back-end technologies such as enterprise IT technologies as well as the development, construction and operation of Microsoft’s datacenter makes up the fourth group and will be lead by Satya Nadella. These four groups having been organized by function will help the company to operate more cohesively. “The form of delivery of our value will shift to really thinking about devices and services versus packaged software,” Ballmer said, “We need to move forward as one Microsoft, with one strategy and one set of
goals,” he added.

Microsoft’s change in structure could be classified one of several types of innovation. The new company structure could be seen as process innovation because its goals are oriented toward improving the effectiveness or efficiency of the product. It could also be considered a competence enhancing innovation from the perspective that it builds on the firm’s existing knowledge base. Or perhaps as an architectural innovation because of the way it changes the overall design of the system. Regardless, Microsoft’s Global Diversity and Inclusion strategy recognizes that to be a leader in the global market-place it will require a corporate culture and business environment where employees with varied backgrounds, skills, knowledge and experience work together to meet the customer demands.

To determine the strategy Microsoft’s leadership team investigated how it could reorient the structure to continue to use technology to improve and empower people’s lives. The strategy focuses on developing a family of devices and services to empower businesses and individuals around the world whether they are at home, at work, or on the go.

It is Microsoft’s intent to focus on the functionality of their technology and devices. The goal is to not only to allow people their devices for casual things like listening to music or checking up on the news but to enable people to turn to technology for more important tasks creating new and even memorable experiences.

Again the strategy fits their current situation. Microsoft employs people from 135 different countries and regions. Having a multicultural workforce assists Microsoft to attract and keep their best employees, develop new and innovative products and to better understand the needs of a wide range of customers. Understanding the variety of needs and realizing what matters most to those customers will help Microsoft produce devices to satisfy both individuals and businesses.

Section IV – Technology Sourcing and Internal Innovation

Microsoft is company that uses a number of different ways to increase its innovative capabilities. Microsoft uses licensing both as a licensee obtaining the rights to use the proprietary technology of another company, an example of this is when Microsoft needed to get a web browser to market fast, it licensed the software it needed from Spyglass Inc. Microsoft also sometimes grants the rights to use its proprietary technology by other companies. Microsoft has even bought companies outright to acquire other Internet utilities. These have included Vermeer Technologies, Colusa Software and eShop Inc.

Microsoft does not manufacture all of the products that they sell. In 2011 Microsoft teamed up with Nokia and provided the Windows Phone 7 to the Nokia phones. This strategic alliance allows Microsoft to exploit their own capabilities by leveraging them into Nokia’s development efforts. The same can be said about the various PC computer manufacturers who sold new computers preloaded with Microsoft products.

Much of Microsoft’s innovative capabilities are increased through solo internal development. Although solo internal development is often a relatively slow and expensive way of developing a technology because the company bears all risks, costs and could spend considerable time developing the new technology, refining its designs, and developing new production or service processes to put the new technology into service. It works for Microsoft because it allows them to maintain a high level of control, it has potential for leveraging existing competencies, and it has potential for developing new competencies.

As stated in section III, Microsoft restructured itself into four engineering divisions. Each division with the same goal of creating a family of devices and services for both individuals and businesses that empower users, and creates an experience that encompasses everything in a person’s life that matters to them.

Microsoft envisions a family of devices that will be useful for work, for
play and feature everything a person needs for a better experience available through the cloud. Microsoft expects their family of devices to include phones, tablets, PCs, TV attached devices and other things yet to be imagined and intends to reinvent the family of devices building upon the Window 8 platform.

In the article Kara Swisher published earlier this year Steve Ballmer (Microsoft CEO) listed four competitive assets that the company will center its efforts on. They are: 1) A business model based on partner and first-party devices with both consumer and enterprise services. 2) Optimization for activities people value most.

3) A family of devices powered by a service-enabled shell.
4) Design for enterprise extensibility and enterprise needs. The restructure of Microsoft to the four engineering divisions is the best way to manage the company’s innovation capabilities. At stated in chapter 10 f Shilling’s book, the structure of an organization and the degree to which it uses formalized and standardized procedures and controls can significantly influence its likelihood of innovating the effectiveness of its innovation projects, and the speed of its new product development process. Microsoft may be one of the few companies that can live up to their idea. Their previous experience in various markets and in the technologies involved has given them valuable insight to what is necessary to reach their goal.

Section V – Product Development Strategy

The product development strategy that Microsoft has decided to explore was the incorporation of the new HTML 5 with Silverlight. It was back in 2010 during a professional developers conference that the company’s executives had addressed the idea of utilizing both programs together. The reasoning for this was that Microsoft wanted to keep with the tradition of creating products that were not only compatible with the Windows OS but also with Apple’s OS. Since HTML is a cross compatible solution for both operating systems, it made the most sense to try to develop the new form of HTML with Microsoft’s Silverlight. The idea that Microsoft has for Silverlight is to
use it as the development platform for the line of mobile cellular devices they produce: the Windows phone. Now on the other side HTML 5 was seen as the answer for many of technologies major compatible issues. Before the release of this new programming language, servers, desktops and mobile devices were limited to one specific operating system, but the this new version HTML5 is being seen as the key to fixing all of those compatibility issues. But HTML5’s success and the future of cross platform solutions will depend on one major factor, the user demand. As we have seen over the last few years, the Mac has steadily gained the upper hand in the market. This is in huge part to Apple’s popularity amongst the younger generation and has allowed them to exceed approximately 10 percent of the market share. The biggest issue however for Microsoft does not come from the Macs themselves, it comes from the demand that is generated by those that purchase other Apple products. To be more specific, the demand stems from the IPhones. This is because while the phones at first were being sold at a very high price, Apple pushed most of its budget it to advertising to ensure that they could great enough buzz about the product. Then by the time the release date came, people were already lining up outside the door waiting to buy their first Apple smartphone. By the time the 4th generation was released, customers were casually spending their free time in the Apple store because it became less of a store and more of a hang out place. When users of a product have an enjoyable experience, they tend to stick with the brand rather than switching to another source. And since Apple was a purveyor of many different technology products such as the Mac desktop, IPad, IPods and AppleTV, consumers chose to keep buying those products, as they were already comfortable with the setup of the OS. There are two other companies that have benefitted from the idea of popularity demand: Android and Google, which now give consumers the more options to choose from in terms of mobile devices and cellular plans. However there was a drawback with the operating systems for these two and it is the same and it was with Microsoft, compatibility. The main compatibility issue lies with the fact that both utilize web based application and depending on the type of phone you are using, the app may run a bit slower than normal because it takes longer to process the data through the web browser. To combat this web app developers are creating new updates that will allow for compatibility with any OS,
whether it is Microsoft, Apple or Linux based. In order to reduce many of the issues that are present, the first move would be is to embrace the web standards. And speaking of these standards, the web industry is actively seeking to move into the future by upgrading the entire formal web programming language to HTML5, the traditional JavaScript and the next installment of Cascading Style Sheets, CSS3. One of the reasons that Microsoft has taken to wanting to make the change over to HTML5 in their platform is because they view it as the future of the web development technology. Which is why they have already begun looking into incorporating it into Internet Explorer 9 and possibly if IE9 is a success, Windows 8. Now with the when it came to their mobile devices, HTML5 is becoming the odds on favorite to become the norm because of the fact that the companies such as Apple, Microsoft and Android all operate on different platforms. This new programming language is seen as the method that will help bridge the gap between disparate and incompatible OS’s for these devices. Since right now the applications that have been developed all are not compatible with one another, web developers are hoping to create mobile solutions that will generate one form of app rather than three platform specific apps, each with its own programming language. By doing so users of the applications will have access to them regardless of the operating system that their smartphone runs on. This would be a wise decision for Microsoft and the goals that they currently have for Silverlight and would pave the way for future web based products. When Microsoft first decided to develop Windows 8, it was to make life simpler for the user and try and create an operating system that rivaled something similar to the operating system that Apple has. The decision that Microsoft made to make such a drastic change to the design of the operating system hasn’t happened since the company first released Windows 95. The goal was to give improve the user experience in how they use applications and how they will run on the new operating system. Through the use of common web programming such as HTML5 and JavaScript, developers will be able to create new applications, which will allow for easier integration and adoption. In a method to aid in the building of these applications, Microsoft conducted a new developer conference in California entitled BUILD during 2011. Microsoft is doing its due diligence in order to keep up with technology and innovation by actively seeking to embrace the
rise of new technologies that they might be able to implement into their existing platforms. They do this in an effort to ensure that the Microsoft brand continues to grow bigger and be better than their competitors.

Section VI – Strategy to protect innovations

While Apple continues to remain ahead of Microsoft in the category of innovations, they were named amongst the top three in terms of patents in 2010. They were ranked third with almost 3,100 patents falling behind only IBM and Samsung. Comparing Microsoft with Apple in terms of patents, Apple came in at 46 with only about 560 patents. However it should be noted that Apple did record the highest increase in patents between the years 2009-10 at 94% increase. Normally Microsoft is not in the business of creating innovative products, however there is one except to this rule: the Xbox Kinect. Most of the time the money that the company uses is spent on research and development and acquisitions, which according to the last decade they spent about sixty nine billion on. Unfortunately the money spent has not yielded the results than many would have thought it would, considering Apple seems to be leaving them in the dust in all other areas. Microsoft has hit quite the dilemma and many investors and business evangelists alike agree, that the company is focusing inward on their own markets when they should be out looking to generate new ones. It has been said that the company should look to what Steve Jobs did and branch out into multi facetted areas in an attempt at gaining new business. However, while they do not seek to venture in to other areas, Microsoft does pride itself on having one of the few remaining pure research and development labs. Now they may not always produce a result or product, much of what these facilities do adds tremendous benefits to the overall success that is Microsoft. There is a major issue that Microsoft has on their hands and that is that while they do spend lots of money in research and development, they don’t spend enough attention towards protecting the innovations that they have already created. The major contributor to this is the company’s current CEO, Steve Ballmar, who is not a visionary, like that of someone say Steve Jobs. Now when we look at Apple, Mr. Jobs is the type of brilliant businessman who is able to realize what it is the public wants even before
the public knows it. A true visionary, he is able to then develop great products that will fit the need of the company’s consumer, which is exactly what has made Apple so successful. The other major issue has to do with the corporate culture. Microsoft spends more time worrying about whether or not someone is going to take over his or her share of the market. Apples corporate culture is to keep producing new and innovative products. In order for Microsoft to maintain its grasp on the market, serious changes to their culture need to be made. Just like with anything you need to be able to adapt, which is what Apple did and has allowed them to hit it rich as it were. While Microsoft should be commended for the amount of research and development that they invest their funds in, it is the researchers that deserve the most credit for obtaining the high number of patents that they do. As I mentioned prior, Microsoft was third in patents in 2010 only to IBM and Samsung. However they need to take a step back and retool their strategy for how to utilize the patents once they have obtained them. It is one thing to get the patent but another to actually use it to develop an innovation or product. One thing is for certain, in order to reap the rewards of all the hard work put in to research and development, you first need to be committed to the idea of producing new products rather than protecting what you already have. So in summation, Microsoft is one of histories most innovative companies and thus has changed allowed for many changes over the decades in all facets of life from business to leisure. This company has definitely made many strides over the years from the days of settling lawsuits to becoming one of todays leading technology giants. When you think about it, technology and innovation come hand in hand and Microsoft has proven that with all of the new products they released over the years. It just goes to show you that Microsoft proven capable of being technologically innovative with its research and development. After looking at Microsoft’s strategies, core competencies, dynamics, and innovative breakthroughs, it makes you think just how far can this company go once they move from being an inward company to an outward, like Apple. The possibilities are endless.

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