Marketing Strategies of Microsoft

7/23/2019 Marketing Strategies of Microsoft

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MARKETING STRATEGIES OF

MICROSOFT

A Summer Training Project Report Submitted in partial fulfillment of the requirement of GGS Indraprastha University for

the aard of the !egree of

"achelor of "usiness Administration

2013-2016

Submitted By:

Mr MO!IT "AIN

E#r$%me#t N$:

01112&01'13

(#der t)e Su*er+i,i$# $

M, NE!A MANGA

F./u%ty SSR

e%)i S/)$$% $ r$e,,i$#.% Studie, .#d Re,e.r/)

Ai%i.ted t$ Guru G$bi#d Si#4) I#dr.*r.,t). (#i+er,ity Ne5 e%)i I#di.

1



e/%.r.ti$#

This is to certify that the Project *e$ort titled “MARKETING STRATEGIES OF MICROSOFT”

which is submitted by me in $artial fulfillment of the re%uirement for the award of degree 7B./)e%$r $

Bu,i#e,, Admi#i,tr.ti$#8 from 7Guru G$bi#d Si#4) I#dr.*r.,t). (#i+er,ity8 at e%)i S/)$$% $

r$e,,i$#.% Studie, .#d Re,e.r/) e%)i com$rises only my original work and has not been submitted

in $art or full for any other degree or di$loma of any uni&ersity)

N.me .#d Si4#.ture $ C.#did.te

3



ACKNO9EGEMENT

This $roject has been made $ossible through direct and indirect su$$ort of &arious $eo$le

from whom wish to e+$ress my a$$reciation and gratitude)

would like to thank ,-*- ,O.#/ S#,H #/*"P*"STH" -#01*ST2 for gi&ing

me an o$$ortunity to work on a &aluable $roject)

The com$any my sincere and whole hearted thanks to MS) #1H" M"#," and other faculty

members for constantly guiding and assisting me tackling &ariety of hurdles with im$licit

$atience throughout my $roject)

My dee$est thanks go to my Parents for understanding and su$$orting me)

MOHT !"#

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#/13Page no)

4) ntroduction to Microsoft 5

5) History of Microsoft 647859:;< ;

;) History of Microsoft 647:=97=< >

=) History of Microsoft 6477>95??>< 8

>) History of Microsoft 65??@95?4?< 7

@) History of Microsoft 65?4495?4=< 44

8) Some Com$etitors of Microsoft 4=

8)4 "$$le 4>

8)5 Oracle 4:

8); ,oogle 5?

:) Ainancial "nalysis 55

7) SBOT "nalysis

7)4 Strengths 5@

7)5 The com$any weaknesses 58

7); O$$ortunities 5:

7)= Threats 57

4?) Ser&ice $ro&ided by Microsoft ;?

44) Marketing Strategies ;;

44)4 How the Smart$hone market has e&ol&ed o&er the last > years ;=44)5 .rand Positioning ;>

44); Segmentation Strategies ;@

44)= " re&iew of the brand and communication strategies

1+$enditureD media mi+D reach and effecti&eness ;8

45) Strategic Objecti&es for the #e+t Ai&e 2ears ;7

4;) *isk Aactors m$act on Aorecast for #e+t > 2ears =?

4=) Conclusion =5

4>) .ibliogra$hy =;

5



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MC*OSOAT

Microsoft is an "merican multinational cor$oration head%uartered in *edmondD BashingtonD that

de&elo$sD manufacturesD licensesD su$$orts and sells com$uter softwareD consumer electronics and $ersonal com$uters and ser&ices) ts best known software $roducts are the Microsoft

Bindows line of o$erating systemsD Microsoft Office office suiteD and nternet 1+$lorer the com$any

browser) ts flagshi$ hardware $roducts are 3bo+ game console and the Microsoft Surface series of

tablets) t is the worldEs largest software maker measured by re&enues) t is also one of the worldEs most

&aluable com$anies)

Microsoft was founded by .ill ,ates and Paul "llen on "$ril =D 478>D to de&elo$ and

sell ."SC inter$reters for "ltair ::??) t rose to dominate the $ersonal com$uter o$erating

system market with MS9/OS in the mid947:?sD follow The Com$any by Microsoft Bindows) The

com$anyEs 47:@ initial $ublic offeringD and subse%uent rise in its share $riceD created three billionaires

and an estimated 45D??? Millions from Microsoft em$loyees) Since the 477?sD it has increasingly

di&ersified from the o$erating system market and has made a number of cor$orate ac%uisitions) n May

5?44D Microsoft ac%uired Sky$e Technologies for F:)> billion in its largest ac%uisition to date)

"s of 5?4;D Microsoft is market dominant in both the .M PC9com$atible o$erating system and officessoftware suite markets 6the latter with Microsoft Office<) The com$any also $roduces a wide range of

other software for deskto$s and ser&ersD and is acti&e in areas including nternet search 6with .ing<D

the &ideo game industry 6with the 3bo+D 3bo+ ;@? and 3bo+ One consoles<D the digital ser&ices market

6through MS#<D and mobile $hones 6&ia the Bindows Phone OS<) n !une 5?45D Microsoft entered the

$ersonal com$uter $roduction market for the first timeD with the launch of the Microsoft SurfaceD a line

of tablet com$uters)

Bith the ac%uisition of #okiaEs de&ices and ser&ices di&ision to form Microsoft Mobile OyD the com$any

has re9entered the Smart$hone hardware marketD after its $re&ious attem$tD Microsoft GinD which resulted

from their ac%uisition of /anger nc)

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n October 5?4=D it was re$orted in the media that Microsoft which ac%uired #okia to succeed in mobile

de&ice market was incurring losses due to ac%uisitionD which was &isible in its fiscal first %uarter

earnings)

HSTO*2 OA MC*OSOAT

1;'2<=3: F$u#di#4 .#d /$m*.#y be4i##i#4,

Paul "llen and .ill ,atesD childhood friends with a $assion in com$uter $rogrammingD The Com$any

seeking to make a successful business utiliing their shared skills) n 4785 they founded their first

com$any named Traf9O9/ataD which offered a rudimentary com$uter that tracked and analyed

automobile traffic data) "llen the Com$any on to $ursue a degree in com$uter science at the -ni&ersity

of BashingtonD later dro$$ing out of school to work at Honey the Com$any) ,ates began studies at

Har&ard)

8



The !anuary 478> issue of Popular #lectronics featured Micro nstrumentation and Telemetry SystemIs

6MTS<"ltair ::?? microcom$uter) "llen suggested that they could $rogram a ."SC inter$reter for the

de&iceJ after a call from ,ates claiming to ha&e a working inter$reterD MTS re%uested a demonstration)

Since they didnEt actually ha&e oneD "llen worked on a simulator for the "ltair while ,ates de&elo$ed the

inter$reter)

"lthough they de&elo$ed the inter$reter on a simulator and not the actual de&iceD the inter$reter worked

flawlessly when they demonstrated the inter$reter to MTS in "lbu%uer%ueD #ew Me+ico in March 478>J

MTS agreed to distribute it and market it as "ltair ."SC) They officially established Microsoft on

"$ril =D 478>D with ,ates as the C1O) "llen came u$ with the original name of KMicro9SoftDK the

combination of the words micro$rocessor and softwareD as recounted in a 477> Aortune magaine article)

n "ugust 4788 the com$any formed an agreement with "SC Magaine in !a$anD resulting in its first

international officeD K"SC Microsoft” )The Com$any mo&ed to a new home in .elle&ueD Bashington in

!anuary 4787)

Microsoft entered the O$erating System business in 47:? with its own &ersion of -#3D

called 31#3) The com$anyD it was MS9/OS that solidified the com$anyEs dominance) "fter

negotiations with /igital *esearch failedD .M awarded a contract to Microsoft in #o&ember 47:? to

$ro&ide a &ersion of the CP(M OSD which was set to be used in the u$coming .M Personal

Com$uter 6.M PC<) Aollowing the release of the .M PC in "ugust 47:4D Microsoft retained ownershi$of MS9/OS) Since .M co$yrighted the .M PC .OSD other com$anies had to re&erse engineer it in

order for non9.M hardware to run as .M PC com$atiblesD but no such restriction a$$lied to the

o$erating systems) /ue to &arious factorsD such as MS9/OSEs a&ailable software selectionD Microsoft

e&entually became the leading PC o$erating systems &endor) The com$any e+$anded into new markets

with the release of the $icrosoft $ouse in 47:;)

9



1;=><;>: 9i#d$5, .#d Oi/e

10



Bhile jointly de&elo$ing a new O$erating System with .M in 47:=D O$erating System(5D Microsoft

released Microsoft BindowsD a gra$hical e+tension for MS9/OSD on #o&ember 5?D 47:>) Microsoft

mo&ed its head%uarters to *edmond on Aebruary 5@D 47:@D and on March 4; the com$any the

com$any $ublicJ the ensuing rise in the stock would make an estimated four billionaires and 45D???

Millions from Microsoft em$loyees) /ue to the $artnershi$ with .MD in 477? the Aederal Trade

Commission set its eye on Microsoft for $ossible collusionJ it marked the beginning of o&er a decade of

legal clashes with the -)S) ,o&ernment)

Microsoft released its &ersion of O$erating System(5 to original e%ui$ment manufacturers 6O1Ms< on

"$ril 5D 47:8J

meanwhileD the com$any was at work on a ;59bit OSD Microsoft Bindows #TD using ideasfrom OS(5J it shi$$ed on !uly 54D 477;D with a new modular kernel and the Bin;5 a$$lication

$rogramming interface 6"P<D making $orting from 4@9bit 6MS9/OS9based< Bindows easier) Once

Microsoft informed .M of #TD the OS(5 $artnershi$ deteriorated)

n 477?D Microsoft introduced its office suiteD Microsoft Office) The software bundled se$arate office

$roducti&ity a$$licationsD such as Microsoft Bord and Microsoft 1+cel) On May 55 Microsoft

launched Bindows ;)? with a streamlined user interface gra$hics and im$ro&ed $rotected

mode ca$ability for the ntel ;:@$rocessor) .oth Office and Bindows became dominant in their

res$ecti&e areas) #o&ellD a Bord com$etitor from 47:=47:@D filed a lawsuit years later claiming that

Microsoft left $art of its "Ps undocumented in order to gain a com$etiti&e ad&antage)

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On !uly 58D 477=D the -)S) /e$artment of !usticeD "ntitrust /i&ision filed a Com$etiti&e m$act

Statement that saidD in $artL K.eginning in 47::D and continuing until !uly 4>D 477=D Microsoft induced

many O1Ms to e+ecute anti9com$etiti&e K$er $rocessorK licenses) -nder a $er $rocessor licenseD an O1M

$ays Microsoft a royalty for each com$uter it sells containing a $articular micro$rocessorD whether the

O1M sells the com$uter with a Microsoft o$erating system or a non9Microsoft o$erating system) neffectD the royalty $ayment to Microsoft when no Microsoft $roduct is being used acts as a $enaltyD or ta+D

on the O1MEs use of a com$eting PC o$erating system) Since 47::D MicrosoftEs use of $er $rocessor

licenses has increased)K

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1995–2005: Internet and the 32-bit

era

Aollowing .ill ,ateIs internal Knternet Tidal Ba&e memoK on May 5@D 477>D Microsoft began to

redefine its offerings and e+$and its $roduct line into com$uter networking and the Borld Bide the

Com$any) The com$any released Bindows 7> on "ugust 5=D 477>D featuring $re9em$ti&e multitaskingD a

com$letely new user interface with a no&el start buttonD and ;59bit com$atibilityJ Millions to #TD it

$ro&ided the Bin;5 "P) Bindows 7> came bundled with the online ser&ice MS#D and for

O1Ms nternet 1+$lorerD a The Com$any browser) nternet 1+$lorer was not bundled with the retail

Bindows 7> bo+es because the bo+es The com$any $rinted before the team finished the Com$any

browserD and instead was included in the Bindows 7> Plus $ack)

13



.ranching out into new markets in 477@D Microsoft and #.C -ni&ersal created a new 5=(8 cable news

stationD MS#.C) Microsoft created Bindows C1 4)?D a new OS designed for de&ices with low memory

and other constraintsD such as $ersonal digital assistants) n October 4778D the !ustice /e$artment filed a

motion in the Aederal /istrict CourtD stating that Microsoft &iolated an agreement signed in 477= and

asked the court to sto$ the bundling of nternet 1+$lorer with Bindows)

.ill ,ates handed o&er the C1O $osition on !anuary 4;D 5???D to Ste&e .allmerD an old college friend of

,ates and em$loyee of the com$any since 47:?D creating a new $osition for himself as Chief Software

"rchitect) 0arious com$anies including Microsoft formed the Trusted Com$uting Platform "lliance in

October 4777 toD among other thingsD increase security and $rotect intellectual $ro$erty through

identifying changes in hardware and software) Critics decry the alliance as a way to enforce

indiscriminate restrictions o&er how consumers use softwareD and o&er how com$uters beha&e a form of

digital rights managementJ for e+am$le the scenario where a com$uter is not only secured for its ownerD

but also secured against its owner as The Com$any)

On "$ril ;D 5???D a judgment was handed down in the case of United States v% $icrosoft D calling the

com$any an Kabusi&e mono$olyKJ it settled with the -)S) /e$artment of !ustice in 5??=) On October 5>D

5??4D Microsoft released Bindows 3PD unifying the mainstream and #T lines under the #T codebase)

The com$any released the 3bo+ later that yearD entering the game console market dominated by

Sony and #intendo) n March 5??= the 1uro$ean -nion brought antitrust legal action against thecom$anyD citing it abused its dominance with the Bindows OSD resulting in a judgment of N=78 Millions

6F@4; Millions< and to $roduce new &ersions of Bindows 3P without Bindows Media PlayerD Bindows

3P Home 1dition # and Bindows 3P Professional #)

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2006–10: Windows Vista, mobie, and

Windows 7

*eleased in !anuary 5??8D the ne+t &ersion of BindowsD Bindows 0istaD focused on featuresD securityD

and a redesigned user interface dubbed "ero) Microsoft Office 5??8D released at the same timeD featured a

K*ibbonK user interface which was a significant de$arture from its $redecessors) *elati&ely strong sales

of both titles hel$ed to $roduce a record $rofit in 5??8)

The 1uro$ean -nion im$osed another fine of N:77 Million 6F4)= billion< for MicrosoftEs lack of

com$liance with the March 5??= judgment on Aebruary 58D 5??:D saying that the com$any charged ri&als

unreasonable $rices for key information about its workgrou$ and .ackOffice ser&ers) Microsoft stated

that it was in com$liance and that Kthese fines are about the $ast issues that ha&e been resol&edK)

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.ill ,ates retired from his role as Chief Software "rchitect on !une 58D 5??:D while retaining other

$ositions related to the com$any in addition to being an ad&isor for the com$any on key $rojects) "ure

Ser&ices PlatformD the com$anyEs entry into the cloud com$uting market for BindowsD launched on

October 58D 5??:) On Aebruary 45D 5??7D Microsoft announced its intent to o$en a chain of Microsoft9

branded retail storesD and on October 55D 5??7D the first retail Microsoft Store o$ened in ScottsdaleD

"rionaJ the same day the first store o$enedD Bindows 8 was officially released to the $ublic) Bindows

8Es focus was on refining 0ista with ease of use features and $erformance enhancementsD rather than alarge reworking of Bindows)

MICROSOFT IN MOBIE IN(STR?

"s the Smart$hone industry boomed beginning in 5??8D Microsoft struggled to kee$ u$ with its

ri&als "$$le and ,oogle in $ro&iding a modern Smart$hone o$erating system) "s a resultD in 5?4?D

Microsoft re&am$ed their aging flagshi$ mobile o$erating systemD Bindows MobileD re$lacing it with the

new Bindows Phone OSJ along with a new strategy in the Smart$hone industry that has Microsoftworking more closely with Smart$hone manufacturersD such as #okiaD and to $ro&ide a consistent user

e+$erience across all smart $hones using MicrosoftEs Bindows Phone OS) t used a new user interface

design languageD code named KMetroKD which $rominently used sim$le sha$esD ty$ogra$hy and

iconogra$hyD and the conce$t of minimalism)

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Microsoft is a founding member of the O$en #etworking Aoundation started on March 5;D 5?44) Other

founding com$anies include ,oogleD HP #etworkingD 2ahooD 0erionD /eutsche Telekom and 48 other

com$anies) The non$rofit organiation is focused on $ro&iding su$$ort for a new cloud

com$uting initiati&e called Software9/efined #etworking) The initiati&e is meant to s$eed inno&ation

through sim$le software changes in telecommunications networksD wireless networksD data centers and

other networking areas)

2011<2013: Rebr.#di#4 9i#d$5, = Sur./e

Aollowing the release of Bindows PhoneD Microsoft under The Com$any a gradual rebranding of its $roduct range throughout 5?44 and 5?45the cor$orationEs logosD $roductsD ser&icesD and the com$any

sites ado$ted the $rinci$les and conce$ts of the Metro design language) Microsoft $re&iew the

com$any Bindows :D an o$erating system designed to the com$any both $ersonal com$uters and tablet

com$utersD in Tai$ei in !une 5?44) " de&elo$er $re&iew was released on Se$tember 4;D and was re$laced

by a consumer $re&iew on Aebruary 57D 5?45) On May ;4D 5?45D the $re&iew &ersion was released)

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On !une 4:D 5?45D Microsoft un&eiled the SurfaceD the first com$uter in the com$anyEs history to ha&e its

hardware made by Microsoft) On !une 5>D Microsoft $aid -SF4)5 billion to buy the social

network 2ammer) On !uly ;4D 5?45D Microsoft launched the Outlook)com The com$any mail ser&ice to

com$ete with ,mail) On Se$tember =D 5?45D Microsoft released Bindows Ser&er 5?45) On October 4D

Microsoft announced its intention to launch a news o$erationD $art of a new9look MS#D at the time of theBindows : launch that was later in the month) On October 5@D 5?45D Microsoft launched Bindows : and

the Microsoft Surface)

Three days laterD Bindows Phone : was launched) To co$e with the $otential for an increase in demand

for $roducts and ser&icesD Microsoft o$ened a number of Kholiday storesK across the -)S) to com$lement

the increasing number of Kbricks9and9mortarK Microsoft Stores that o$ened in 5?45)

On March 57D 5?4;D Microsoft launched a Patent Tracker) The Ginect sensor de&ice was u$graded for the

5?4; release of the eighth9generation 3bo+ One and its ca$abilities The Com$any re&ealed in May 5?4;)

The new Ginect uses an ultra9wide 4?:?$ cameraD it can function in the dark due to an infrared sensorD it

em$loys higher9end $rocessing The com$any and new softwareD it can distinguish bet The com$any fine

mo&ements 6such as a thumb mo&ements<D and the de&ice can determine a userEs heart rate by looking at

his(her face) Microsoft filed a $atent a$$lication in 5?44 that suggests that the cor$oration may use theGinect camera system to monitor the beha&ior of tele&ision &ie The com$any as $art of a $lan to make

the &iewing e+$erience more acti&e)

On !uly 47D 5?4;D Microsoft stocks suffered its biggest one9day $ercentage sell9off since the year 5???

after its fourth9%uarter re$ort raised concerns among the in&estors on the $oor showings of both Bindows

: and the Surface tabletJ with more than 44 $ercentage $oints declining Microsoft suffered a loss of more

than -S/ ;5billion) Aor the 5?4? fiscal yearD Microsoft had fi&e $roduct di&isionsL Bindows /i&isionD

Ser&er and ToolsD Online Ser&ices /i&isionD Microsoft .usiness /i&isionD and 1ntertainment and /e&ices

/i&ision)

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N$@i. de+i/e,

On Se$tember ;D 5?4;D Microsoft agreed to buy #okiaEs mobile unit for F8 billion) "lso in 5?4;D "my

Hood became the CAO of Microsoft) The "lliance for "ffordable nternet 6"="< was launched in

October 5?4; and Microsoft is $art of the coalition of $ublic and $ri&ate organiations that also

includes AacebookD ntel and ,oogle) ed by Tim .erners9eeD the "=" seeks to make nternet access

19



more affordable so that access is broadened in the de&elo$ing worldD where only ;4Q of $eo$le are

online) ,oogle will hel$ to decrease internet access $rices so that they fall below the -# .roadband

CommissionEs worldwide target of >Q of monthly income)

n line with the maturing PC businessD in !uly 5?4; Microsoft announced that it would reorganie the

business into = new business di&isions by functionL O$erating SystemD "$$sD Cloud and /e&ices) "ll

$re&ious di&isions will be diluted into new di&isions without any workforce cut) On Aebruary =D

5?4=D Ste&e .allmer ste$$ed down as C1O of Microsoft and was succeeded by Satya #adellaD who

$re&iously led MicrosoftEs Cloud and 1nter$rise di&ision) On the same dayD !ohn B) Thom$son took on

the role of chairmanD with .ill ,ates ste$$ing down from the $osition to become more acti&e within the

com$any as Technology "d&isor) On "$ril 5>D 5?4=D Microsoft ac%uired #okia /e&ices and Ser&ices and

formed a new subsidiaryD Microsoft Mobile Oy)

On Se$tember 4>D 5?4=D Microsoft ac%uired the &ideogame de&elo$ment com$any Mojang for F5)>

billionD best known for its wildly $o$ular flagshi$ game $inecraft )

SOM1 COMP1TTO*S OA MC*OSOAT

ist of Com$etitors of Microsoft are as followsL9

4) "$$le

5) Oracle

;) ,oogle

A**%e: - "$$le has an KiK for re&olutionary technology) Since its releaseD the com$anyEs iPhone

has s$urred a re&olution in cell $hones and mobile com$uting) t also continues to inno&ate its core Mac

deskto$ and la$to$ com$utersD all of which feature its OS 3 o$erating systemD including the iMac all9in9

one deskto$ for the consumer and education marketsD the Mac .ook "ir ultra9$ortable la$to$D and the

high9end Mac Pro and Mac .ook Pro for consumers and $rofessionals)

20



Or./%e: - Oracle wants to $roclaim it far and wideL it knows all about su$$orting business o$erations)

The leader in enter$rise software 6almost 8>Q of its sales<D it also $ro&ides hardware and ser&ices to hel$

com$anies im$ro&e their $rocesses) .est known for its focus on databasesD it offers aid in areas such

as managing business dataD collaboration and a$$lication de&elo$mentD customer relationshi$

managementD and su$$ly chain management)

G$$4%e: - The firm generates re&enue through ad sales) "d&ertisers deli&er rele&ant ads targeted to

search %ueries or Beb content) The ,oogle #etwork is a network of third9$arty customers that use

,oogleEs ad $rograms to deli&er rele&ant ads to their own sites) Aounders Sergey .rin and arry Page

each ha&e nearly ;?Q &oting control)

A**%e

21



"$$le nc) is an "merican multinational cor$oration head%uartered in Cu$ertinoD CaliforniaD that designsD

de&elo$sD and sells consumer electronicsD com$uter softwareD online ser&icesD and $ersonal com$uters) ts

best9known hardware $roducts are the Mac line of com$utersD the iPod media $layerD the iPhoneD

Smart$hone and the iPad tablet com$uter) ts online ser&ices include iCloudD iTunes StoreD and "$$Store) "$$leEs consumer software includes the OS 3 and iOS o$erating systemsD the iTunes media

browserD the Safari The Com$any browserD and the iife and iBork creati&ity and $roducti&ity suites)

"$$le was founded by Ste&e !obsD Ste&e BoniakD and *onald Bayne on "$ril 4D 478@D to de&elo$ and

sell $ersonal com$uters) t was incor$orated as "$$le Com$uterD nc) on !anuary ;D 4788D and was

renamed as "$$le nc) on !anuary 7D 5??8D to reflect its shifted focus towards consumer electronics)

"$$le is the worldEs second9largest information technology com$any by re&enue after Samsung

1lectronics and the worldEs second9largest mobile $hone maker after Samsung) Aortune magaine named

"$$le the most admired com$any in the -nited States in 5??: and in the world from 5??: to 5?45)

On Se$tember ;?D 5?4;D "$$le sur$assed Coca9Cola to become the worldEs most &aluable brand in

the Omnicom ,rou$Es K.est ,lobal .randsK re$ort) The com$anyD the com$any has recei&ed criticism for

its contractorsE labor $racticesD as the com$any as for its own en&ironmental and business $ractices)

"s of !une 5?4=D "$$le maintains =5> retail stores in fourteen countriesD as The Com$any as the

online "$$le Store and iTunes StoreD the latter of which is the worldEs largest music retailer) "$$le is

the largest $ublicly traded cor$oration in the world by market ca$italiationD with an estimated market

22



ca$italiation of F==@ billion by !anuary 5?4=) "s of Se$tember 57D 5?45D the com$any had 85D:??

$ermanent full9time em$loyees and ;D;?? tem$orary full9time em$loyees worldwide)

ts worldwide annual re&enue in 5?4; totaled F48? billion) "s of R4 5?4=D "$$leEs fi&e9year growth

a&erage is ;7Q for to$ line growth and =>Q for bottom line growth)

n May 5?4;D "$$le entered the to$ ten of the Aortune >?? list of com$anies for the first timeD rising 44

$laces abo&e its 5?45 ranking to take the si+th $osition)

"ccording to the 5?4= edition of the nter brand .est ,lobal .rands re$ortD "$$le is the worldEs most

&aluable brandD with a &aluation of -SF44:)7 billion) "ccording to the .oston Consulting ,rou$ K&'

$ost Innovative (ompaniesK rankingD "$$le is also the worldEs most inno&ati&e brand in 5?4=) "$$le

occu$ies this rank since 5??>)

23



S$ur/e: - .**%e /$r*

The "$$le Cor$oration ,et its most income from i$hone followed by iPad and mac which makes "$$le

highest re&enue generating com$any in smart$hones)

24



""P9 "$$le MSAT9 Microsoft

S$ur/e: G.rt#er I#/

The market share of a$$le is much high than Microsoft till the year of 5?4= but as $redicted the

Microsoft has take o&er on nokia this might increase the share of Microsoft in Smart$hones)

"$$le had a commanding :8)=Q share of the worldwide tablet market last yearD according to

/C) ,artner $redicts "$$le will kee$ a @7Q share this year and will still ha&e =8Q by 5?4>) Bindows

doesnEt show u$ in that forecast)

Or./%e

Oracle Cor$oration is an "merican multinational com$uter technology cor$oration head%uartered

in *edwood CityD CaliforniaD -nited States) The com$any s$ecialies in de&elo$ing and

marketing com$uter hardware systems and enter$rise software $roducts $articularly its own brands of

database management systems) "s of 5?44D Oracle is the second9largest software maker by re&enueD

after Microsoft)

25



The com$any also builds tools for database de&elo$ment and systems of middle9tier softwareD enter$rise

resource $lanning 61*P< softwareD customer relationshi$ management 6C*M< software and su$$ly chain

management 6SCM< software)

arry 1llisonD a co9founder of OracleD had ser&ed as OracleEs C1O throughout its history) On Se$tember

4:D 5?4=D it was announced that he would be ste$$ing down 6with Mark Hurd and Safra Cat to become

co9C1Os<)

1llison will become e+ecuti&e chairman and CTO) He also ser&ed as the Chairman of the .oard until his

re$lacement by !effrey O) Henley in 5??=) On "ugust 55D 5??:D the "ssociated Press ranked 1llison as

the to$9$aid chief e+ecuti&e in the world)

1llison co9founded Oracle Cor$oration in 4788 with .ob Miner and 1d Oates under the name Software

/e&elo$ment aboratories 6S/<) 1llison took ins$iration from the 478? $a$er written by 1dgar A)

Codd on relational database management systems 6*/.MS< named K" *elational Model of /ata for

arge Shared /ata .anks)K He heard about the .M System * database from an article in the I"$

Research )ournal $ro&ided by Oates)

"lso deri&ed from CoddEs theoriesD 1llison wanted to make OracleEs $roduct com$atible with System *D

but failed to do so as .M ke$t the error codes for their /.MS a secret) S/ changed its name

to *elational SoftwareD nc 6*S< in 4787D then again to Oracle Systems Cor$oration in 47:5D to align

itself more closely with its flagshi$ $roduct Oracle /atabase)

"t this stage .ob Miner ser&ed as the com$anyEs senior $rogrammer) n 477>D Oracle Systems

Cor$oration changed its name to Oracle Cor$orationD officially named OracleD but sometimes referred to

as Oracle Cor$orationD the name of the holding com$any)

Part of Oracle Cor$orationEs early success arose from using the C $rogramming language to im$lement

its $roducts) This eased $orting to different o$erating systems 6most of which su$$ort C<)

26



S$ur/e: - F$rbe,/$m

The "bo&e chart shows about the Software 0endors worldwide which shows that Oracle has lowest share

in software industry whereas Microsoft is 5 largest Software sellers in this world)

G$$4%e

27



,oogle is an "merican multinational cor$oration s$ecialiing in nternet9related ser&ices and $roducts)

These include online ad&ertising technologiesD searchD cloud com$utingD and software) Most of its $rofits

are deri&ed from "dBords)

,oogle was founded by arry Page and Sergey .rin while they the com$any Ph)/) students at Stanford

-ni&ersity) Together they own about 4= $ercent of its shares but control >@ of the stockholder &oting the

com$any through su$er&oting stock) They incor$orated ,oogle as a $ri&ately held com$any on

Se$tember =D 477:) "n initial $ublic offering follows The Com$any on "ugust 47D 5??=) ts mission

statement from the outset was Kto organie the worldEs information and make it uni&ersally accessible and

usefulDK and its unofficial slogan was K/onEt be e&il)Kn 5??=D ,oogle mo&ed to its new head%uartersin Mountain 0iewD CaliforniaD nicknamed the ,oogle $le+)

*a$id growth since incor$oration has triggered a chain of $roductsD ac%uisitions and $artnershi$s beyond

,oogleEs core search engine) t offers online $roducti&ity software including email 6,mail<D a cloud

storage ser&ice 6,oogle /ri&e<D an office suite 6,oogle /ocs< and a social networking

ser&ice 6,oogle<)

/eskto$ $roducts include a$$lications for The com$any browsingD organiing and editing $hotosD

and instant messaging) The com$any leads the de&elo$ment of the "ndroid mobile o$erating system and

the browser9only Chrome OS for a netbook known as a Chrome book) ,oogle has mo&ed increasingly

into communications hardwareL it $artners with major electronics manufacturers in the $roduction of its

28



Khigh9%uality low9costK #e+us de&ices and ac%uired Motorola Mobility in May 5?45) n 5?45D a fiber9

o$tic infrastructure was installed in Gansas City to facilitate a ,oogle Aiber broadband ser&ice)

The cor$oration has been estimated to run more than one Million ser&ers in data centers on the world 6as

of 5??8< and to $rocess o&er one billion search re%uests and about 5= terabytes of user9generated data

each day 6as of 5??7<) n /ecember 5?4; "le+a listed google)com as the most &isited the com$any site in

the world)

#umerous ,oogle sites in other languages figure in the to$ one hundredD as do se&eral other ,oogle9

owned sites such as 2ouTube and .logger) ts market dominance has led to $rominent media co&erageD

including criticism of the com$any o&er issues such as co$yrightD censorshi$D and $ri&acy)

S$ur/e: - ei/$##e/t/$u@

29



2005-06 2006-06 2007-06 2008-06 2009-06 2010-06 2011-06 2012-06 2013-06 2014-06

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Re+e#ue (S Mi%%i$#,

2005-06 2006-06 2007-06 2008-06 2009-06 2010-06 2011-06 2012-06 2013-06 2014-06

0

10

20

30

40

50

60

70

80

90

Gr$,, M.r4i#

31



2005-06 2006-06 2007-06 2008-06 2009-06 2010-06 2011-06 2012-06 2013-06 2014-06

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

9$r@i#4 C.*it.% (S Mi%%i$#,

2005-06 2006-06 2007-06 2008-06 2009-06 2010-06 2011-06 2012-06 2013-06 2014-06

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

O*er.ti#4 C.,) F%$5 (S Mi%%i$#,

32



The nter$retation of the abo&e gra$hs is as followL 9

4) The Airst gra$h shows the re&enue generated by Microsoft as re&enue increased in year 5??> to 5??:

and in 5??7 there is a fall in re&enue and again starts increasing till now)

5) The Second gra$h shows about the ,ross Margin of the Microsoft as it mostly got decreased from theyear 5??> till now)

;) The Third ,ra$hs shows O$erating Cash Alow of Microsoft as it shows increase in O$erating CashAlow from 5??@ with almost double in 5?4=)

=) The ast ,ra$hs shows about the working ca$ital of the com$any which showsI decreasing from year 5??> till 5??: and from 5??7 it is kee$ on increasing)

33



S9OT A#.%y,i,:-

Strengths

Br.#d %$y.%ty O&er the yearsD Microsoft has been the leading OS and software $ro&iderD which resulted

in more than 7?Q market share for PC OS) Most of us grew u$ using its easy to use OSD are Millionswith it and will kee$ using it) Aew other brands are ca$able to com$ete with Microsoft for this reason)

1&en o$en source OSD which are com$letely free and The Com$any suited to use for common userD find it

hard to attract users)

Br.#d re*ut.ti$# "ccording to nter brandD MicrosoftIs brand is the >th most &aluable brand in the

worldD &alued at F >8): billion) Aorbes listed the cor$orate as the 8th most re$utable business in the

world) .rand re$utation leads to higher sales and greater market share)

E.,y t$ u,e ,$t5.re Bindows OS and Office software $roducts are so $o$ular not just because

Microsoft has great mono$olistic the com$anyD strong distribution channels and good brand re$utation

but also because its $roducts are of great %uality and really easy to use)

Str$#4 di,tributi$# /).##e%, The com$any works with all the major com$uter hardware $roducers

such as eno&oD /ellD Toshiba and Samsung and major com$uter retailers to make sure com$uters would

be sold with already $re9installed Bindows software) The com$any also in&ested in /ell and #okia to

tighten its relationshi$s with these com$anies)

R$bu,t i#.#/i.% *er$rm.#/e Microsoft grew its re&enues by 5?Q from 5??: to 5?45 and holds more

than F@; billion of cash and cash e%ui&alents that can be used for ac%uisitions and substantial in&estments

into *'/)

A/ui,iti$# $ S@y*e Bith nearly ;?? Million usersD Sky$e is a significant boost to MicrosoftIs online

$resence and ha&e a lot of $otential in generating income from online ad&ertising)

34



The com$any weaknesses

$$r ./ui,iti$#, .#d i#+e,tme#t, Aew of MicrosoftIs ac%uisitions the com$any successful and

brought not just re&enues and $roducts but new skills and com$etencies to the com$any) Massi&eD ink

1+changeD The com$any T0D /anger are just few e+am$les of multi Millions ac%uisitions made by

Microsoft but soon shut down or di&ested)

e*e#de#/e $# ).rd5.re m.#u./turer, Microsoft is a giant software cor$oration but it does not

$roduce its own hardware and de$ends on com$uter hardware manufacturers to de&elo$ $roducts that run

Bindows OS) f chea$ and $o$ular alternati&e OS would a$$earD hardware manufacturers may sim$le

choose the alternati&e and Microsoft could do little to change the situation)

Criti/i,m $+er ,e/urity %.5, Bindows OSD the main Microsoft $roduct has been hea&ily criticied for

being so the com$any against &arious &irusesI attacks) Com$ared to other OSD Bindows is the least

$rotected against such attacks)

M.ture C m.r@et, Only recently has Microsoft entered the mobile technology sector and still hea&ily

de$ends on its OS and software sales for standalone and la$to$ com$uters) The market for these $roducts

has matured and Microsoft will find it harder to grow re&enues in these sectors)

S%$5 t$ i##$+.te Microsoft has huge *'/ resources and great $osition to enter new markets with

inno&ati&e $roducts but constantly failed to do so) t had an o$$ortunity to be the first $layer in online

ad&ertising but missed the o$$ortunity) ts entrance to mobile OS was also too lateD while ,oogle and"$$le ca$tured the market share)

35



O$$ortunities

C%$ud b.,ed ,er+i/e, Microsoft could e+$and its range of cloud ser&ices and software as the demand

for cloud9based ser&ices is e+$anding)

M$bi%e .d+erti,i#4 Mobile ad&ertising markets are e+$ected to grow in double digits o&er the ne+t fewyears and Microsoft has a great o$$ortunity to ta$ into these markets with its mobile OS)

M$bi%e de+i/e i#du,try Smart $hones and tablets markets will grow steadily o&er the ne+t few years

and Microsoft could e+$loit this o$$ortunity by introducing more of its own tablets and a new com$any

$hone)

Gr$5t) t)r$u4) ./ui,iti$#, Bith a huge reser&e of cash Microsoft could start ac%uiring new startu$s

that would bring new technologyD skills and com$etences to the business)

36



Threats

I#te#,e /$m*etiti$# i# ,$t5.re *r$du/t, Microsoft is more than e&er on the $ressure to introduce

successful OS both in PC and mobile markets as such com$etitors like ,oogle and "$$le ha&e already

established $ositions)

C).#4i#4 /$#,umer #eed, .#d ).bit, Customers shift from buying la$to$s and standalone PCs to

buying Smart$hone and tabletsD the marketsD where Microsoft has only a modest market share and may

ne&er establish itself)

O*e# ,$ur/e *r$De/t, Many new o$en source $rojects are coming to the market and some of them

became %uite successfulD such as new inu+ OS and O$en Source Office) O$en source $rojects are free

and so they can become an alternati&e to e+$ensi&e MicrosoftIs $roducts)

$te#ti.% %.5,uit, Microsoft has already been sued for many times and lost %uite a few large scale

lawsuits) awsuits are e+$ensi&e as they re%uire time and money) "nd as Microsoft continues to o$erate

more or less the same wayD there is high $robability for more e+$ensi&e lawsuits to come)

37



Ser&ices Pro&ided by Microsoft

!oe"t #$ %ri"e be#ore downoad

The sim$lest business model is that we ha&e to $ay the full $rice for our a$$ before they can download it)

*e%uiring a $urchase in order for a customer to download your a$$ may not be the most effecti&e o$tion

unless $otential customers already trust your a$$D or you charge a low $rice) Consider one of the o$tions

listed below to hel$ monetie your a$$)

Be can $romote our a$$ in the Bindows Store by $utting it on sale to tem$orarily the com$any the $rice

6or e&en make it free< for a s$ecified $eriod of time)

N$te f a $erson $ublished the same a$$ to the Bindows Phone Store using the same reser&ed a$$ nameD

a customer who $urchases the a$$ in one Store can also download it from the other Store without ha&ing

to $ay for it again) This a$$lies e&en if the a$$Es $rice isnEt the same in both Stores)

&ree tria 'ersions o# %aid a%%s

1&en if we going to sell our a$$ consider letting customers try it for free) BeIll be able to u$grade from a

trial &ersion to the full &ersion by $urchasing itD either from right within the a$$ or by going to its listing

in the Bindows Store)

One way to enable a trial is to limit the functionality a&ailable in our trial &ersion so that only certain

features are a&ailable until the customer $urchases the a$$) /etermine which features should be limited

before we begin codingD and then make sure that our a$$ only allows them to work when a full license

has been $urchased)

38



Be can also choose to offer a free trial &ersion 6with either limited or full functionality< for a set amount

of time) -nless the customer buys the a$$D it will sto$ working once the time $eriod e+$ires) Be can

select the time $eriod for the trial when submitting your a$$ to the Bindows Store)

In-a%% %rod$"ts

Bhether our a$$ is free or notD we can sell contentD other a$$s or new a$$ functionality 6such as

unlocking the ne+t le&el of a game< from right within the a$$) Be can $lace the o$tions to buy in9a$$

$roducts where&er itEs con&enient for your customers) Bindows :)4 adds su$$ort for consumable in9a$$

$roductsitems that can be $urchasedD used u$D and then $urchased again if desiredin addition to

durable in9a$$ $roducts 6which cannot be used u$ and re$urchased<)

Aor a durable in9a$$ $roductD we can set a time limit after which the feature will e+$ireD or you can let it

remain acti&e for as long as the customer has a &alid license for their a$$) Be configure the $roduct

lifetime when you describe the in9a$$ offer in your Bindows Store /ashboard)

N$te n9a$$ $roducts cannot be offered from a trial &ersion of an a$$)

Make sure we design our a$$ in such a way that the features we want to sell are se$arate from the core

e+$erience) The a$$ should maintain basic functionalityD e&en if the customer does not make an e+tra

39



$urchase) Aor e+am$leD a note9taking a$$ that asks your customer to $ay e+tra for the ability to sa&e notes

wonEt be $o$ular) Charging for features that are a&ailable at no cost in Millions a$$s can also limit sales

of our a$$) make sure that our features are clearly worth the additional charge relati&e to the com$etition)

.efore we start writing codeD think through your feature model so that we can kee$ the features that we

intend to enable as in9a$$ $roducts as com$artmentalied as $ossible) Be want to make it easy toincor$orate these features into your licensing modelD while $re&enting our a$$ from in&oking them

through other code $aths)

N$te f a $erson has $ublished the same a$$ to the Bindows Phone Store using the same reser&ed a$$

nameD a customer who $urchases a s$ecific durable in9a$$ $roduct will be able to access it from within

the a$$ on any Bindows de&ice) This does not a$$ly to consumable in9a$$ $roducts)

In-a%% ad'ertisin(

ncluding ads in your a$$ is another way to make money) Make sure to follow the Bindows and

Bindows Phone Store Policies when designing where you $lace ads) See "d&ertising guidelines for more

recommendations on how to dis$lay ads in your a$$)

The Microsoft "d&ertising S/G can hel$ you build su$$ort for ads into your a$$)

There are also many $artner com$anies which you can work with to bring ad&ertising re&enue to your

a$$) 2ou can use any ad $latformD as long as the ads com$ly with the Bindows and Bindows Phone

Store Policies) n $articularD the ads $ro&ided by the ad ser&ice must com$ly with the same content

$olicies that a$$ly to a$$s in general)

Consider gi&ing customers the o$tion to remo&e ads) 2ou might offer an in9a$$ $roduct that remo&es adsD

or include ads in the trial &ersion of your a$$ but remo&e them for those who buy the full &ersion)

40



)hird-%art* transa"tions

There are many additional ways for a$$s to make money aside from the o$tions $ro&ided by the

Bindows Store) 2ou can use a third9$arty transaction $ro&iderD or benefit from ties to other lines of

businessD as long as the transactions com$ly with the "$$ /e&elo$er "greement)

Aor e+am$leD if you ha&e a transaction $latform that integrates into a C*M systemD you can use that in

your a$$ to kee$ track of your subscribers)

N$te The Bindows Store does not charge any fee for transactions that take $lace &ia a third9$artytransaction $ro&ider or your own $latform)

41



Marketing Strategies

4< Net5$r@ M.r@eti#4 The first and most known strategy of Microsoft is #etwork marketing)

This is because each windows $roduct is com$atible with another windows $roduct) 2our office

documents can be o$ened on most com$uters because of the number of $eo$le using Microsoft) Thus it

has established the conce$t of #etwork marketing $erfectly)

5< Re4u%.r *r$du/t %.u#/)e, Microsoft is $resent almost e&erywhereD be it the music marketwith its uneD the com$uter $eri$herals marketD it is the market leader in o$erating systemsD it has its own

tabletsD it has re&olutionied gaming with 3.O3 ;@?D it is now in&ol&ed in Cloud com$uting and it

generally comes out and gi&es tough com$etition to the current $layers in the market) This e+$ansion

hel$s build u$ the dee$ $ockets of Microsoft)

;< F$%%$5 t)e /$m*.#y ,tr.te4y One $roblem in the strategy of Microsoft has been that it has

had a follow the com$any strategy in the $ast decade or more) t has rarely come out with an inno&ation)

Check “Microsoft office” from 5??; to 5?4?) 2ou will see that e+ce$t for gra$hicsD they ha&e been

almost the same $roducts o&er and o&er again) n hardware tooD there has hardly been an inno&ation in

Microsoft) Pod launched in 5??4 and une launched in 5??@)

=< e.r#i#4 .#d .d.*ti#4 f you look at BindowsD you will find that 3P had the most security

holesD Bindows 0ista had se&eral tooD Bindows 8 has %uite less security $roblems and Bindows : too is

e+$ected to be e&en better in security) Thus Microsoft is learning fast and ada$ting to the en&ironment)

Microsoft knows that nowadays $eo$le need security and it is $ro&iding the same to them)

>< Bui%d . /.,) /$5 1&en though am re$eating this $ointD but this is im$ortant) Microsoft has a

cash cow o$erating systems as its backu$) "nd its whole em$ire is built on the basis of this cash

@< Be /u,t$mer $/u,ed There are a lot of jokes about the customer ser&ice of Microsoft but if you

really look at itD then the reason why Microsoft is actually working is because hel$ is a&ailable offline as

The com$any as online) 2our com$uter might crash for any reasonD but generally you are able to s$ecify

the reason for the crash and if you are a techie you will be able to reju&enate it) 1&en a 4? year old

nowadays knows how to correct windows)

42



8< E.,e $ u,e Make $roducts which can be used by the youngest to the oldest in the easiest manner)

ike #okia in mobile $honesD Microsoft OS is known for its ease of access) The start button has been

re&olutionary)

:< Bui%d br.#d euity Today Microsoft is amongst the to$ 4? com$anies in terms of its brand

e%uity due to many different consumer and business to business $roducts that it has) .uilding such high

brand e%uity has $aid off for Microsoft with it becoming a highly trusted household name)

!$5 t)e SMART!ONE M.r@et )., e+$%+ed O+er t)e %.,t

& ye.r,

Bhile the Smart$hone conce$t of combining tele$hony with com$uting has been gaining

traction since 5??5D the growth rates currently seen in the industry really only began in 5??8

when "$$le released the first iPhone) "ccording to ,artnerD at that time Bindows mobile held44)>Q of the marketD but as more com$etitors joined the marketD their share dro$$ed continuously until itfell to just 5)@Q by the end of 5?45) The ,lobal market for Smart$hone is

currently e+$ected to grow from F>>)= billion in 5??7 to F4>?); billion by 5?4=)

"$$le re&olutionied Smart$honeIs with the iPhone to an e+tent that $re&ious com$etitors such

as .lackberry and Microsoft struggled to co$e) Sim$ly $utD the $re&ious market leaders failed to

>inno&ate with their $roducts in the manner which the consumer now e+$ected)

"$$le now offered a to$ of the range $roduct at $remium $riceD and by 5??7 they had grown to

command just under 4:Q of the market and showed no signs of slowing) Bhile BindowsD .lackberryDand #okia all still had a strong $resenceD their res$ecti&e market shares were dwindling)

"$$leIs entry to the marketD howe&erD was closely followed in 5??: by another $otential threat

,oogle "ndroid)

,oogle released their first $hone in 5??:) nitiallyD u$take on their $roduct was slowD as they

were considered outsiders to mobile technology) Since releasing their first flagshi$ $honeD

howe&erD they ha&e steadily won more and more of the market with a focus on low to mid9range

$hones) Bhile ,oogle does now offers “,oogle” $honesD they also $ro&ide the android software

free to any manufacturer who wishes to use it) Their business $lan centres not on making $rofit

from their softwareD but from making $rofit from knock9on ,oogle ad&ertisements onSmart$hone which use the "ndroid system) "s a resultD in R5 of this yearD "ndroid accounted

for :?Q of all shi$$ed Smart$honesD highlighting their current dominance 6in &olume at least< in

the market)

"s of R; 5?4=D "ndroid holds 87Q of the market with iPhone maintaining 4=Q) MeanwhileD

Microsoft has grown slightly to a ;);Q market share with .lackberry falling to an all9time low of

43



5)8Q)

BRAN OSITIONING

.rand $ositioning is essential to the success of any firm because it deli&ers a $erce$tion into theconsumerIs minds which differentiates them from their com$etitors) Microsoft began to grow their brando&er 5? years ago with .ill ,ateIs an underlying &ision of “a com$uter on e&ery desk and in e&eryhome”) This resulted in Microsoft de&elo$ing into a huge multinational com$any with $ersonalcom$uting at the forefront of their business) Microsoft dominated this industry for many years which isreflected in the high brand recognition of Microsoft $roducts worldwide)

=

Howe&erD this dominance has slowly e&a$orated and Microsoft has failed to react to new trends such asthe ra$id e+$ansion of the Smart$hone and tablet industries) t a$$ears that MicrosoftIs failure to res$ondto the market trends can be attributed to an o&er confidence by Microsoft in their brand $ositioning whiletheir com$etitors ha&e been de&elo$ing software in new dynamic ways and di&ersifying their $roducts)

Microsoft is now $resented with a $roblem) Their &ision of “a com$uter on e&ery desk and in e&eryhome” has essentially been achie&ed and their consumers are now looking to new technologies to satisfytheir needs) Microsoft needs to restructure their brand $osition in order to facilitate this which the $ublicis beginning to see) The announcement that MicrosoftIs C1O Ste&e .allmer will retire in the ne+t twel&emonths and the recent N>)= billion ac%uisition of #okiaIs $hone business reflects this) The firm is headingin a “new direction” and it is essential that Microsoft de&elo$s their brand $ositioning in line with this as

they attem$t to shift towards a ser&ices and de&ices firm)

Bith the recent ac%uisition Microsoft has inherited the #okia umia range) " Smart$hone range whichfocuses on the con&enience of useD $oking fun at the iPhone and "ndroid counter$arts while em$hasiingthe lightness of the $hone and %uality of the camera) t will be interesting to see how Microsoft de&elo$stheir brand $ositioning in the future) Microsoft released the Microsoft Surface in 5?45)

The tablet failed dramatically with the com$any incurring a loss of F7?? Million worth of stock) Thisfailure could ha&e been easy to $redict as there was no real creati&e &ision associated with the $roduct)The $roduct was ad&ertised as a medium between being used for work and leisure acti&ities) This lack of

creati&ity resulted in there being no $lace for the tablet within the market as $eo$le continued using their

iPads for leisure and their Mac.ook "ir for work) The surface 5 has recently been introduced and it is&ital that Microsoft ensure this time that their brand $ositioning e+$oses a new niche in the market)

44



SEGMENTATION STRATEGIES

Microsoft only recently attem$ted to infiltrate the tablet industry with the Microsoft surface last year) Thecom$anyIs mission statement which states “at MicrosoftD Our mission and &alues are to hel$ $eo$le and businesses throughout the world realise their full $otential” illustrates their segmentation strategy)Microsoft didnIt focus on a $articular segment within the market but rather focused on the entire market)

BhileD this strategy worked for many years for the com$any in terms of $ersonal com$uting due to themono$oly they ac%uired it $ro&ed to be unsuccessful when a$$lied to the tablet industry) Microsoft failed

to ade%uately research the demogra$hicsD $sychogra$hics or the beha&iour of the consumers within theindustry which resulted in a target market which was too broad) ast monthD Microsoft un&eiled theMicrosoft Surface 5)

The $roduct is targeting users who $refer to use their tablet for work $ur$oses o&er leisure with built

in Microsoft softwareD high storage and durable battery) The em$hasis that the Microsoft Surface 5 is a“tool not a toy” $ro&ides a clear idea that Microsoft is targeting $rofessionals who are interested in $roducti&ity) Aor nowD we will just ha&e to wait and see if MicrosoftIs segmentation strategy $ro&es to besuccessful o&er the u$coming year)

;

The recent N>)= billion ac%uisition of #okiaIs $hone business will enable Microsoft to become

more com$etiti&e within the Smart$hone industry as they can segment this area of their

business as a subsidiary section) This $resents Microsoft with a new o$$ortunity to im$lement a

segmentation strategy similar to ,oogle and "$$le who dominate the market with 8>);Q and

4@)7Q of the market share res$ecti&ely according to research undertaken by the /C Borldwide

Phone Tracker)

This $ro&ides an e+citing challenge for Microsoft as more resourcesD e+$ertise and time will be attributedto the sector in the ho$e that Microsoft can increase their market share) n order for this to be achie&edMicrosoft must ensure they can attain #okiaIs feature $hone users as indi&iduals begin to switch o&er toSmart$hones) To achie&e this goal Microsoft has inherited #okiaIs segmentation strategy of $ro&iding

low to mid9le&el $riced $hones such as the #okia umia >5? and 85? instead of only focusing on thehigh9end of the segment)

This will enable Microsoft to ac%uire a market share in regions such as ndia where only about

4?Q of the :8? million mobile $hone users own Smart$hones) This strategy of focusing on the

entry9le&el segment will enable Microsoft to increase their market share as the industry e+$ands) "longwith these low to mid9le&el $riced $hones Microsoft will continue to $roduce $remium $hones such as

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the #okia umia 4?5? in order to com$ete with ,oogle and "$$le in regions where the Smart$honeculture is already in $lace)

A REIE9 OF T!E BRAN AN COMM(NICATION STRATEGIES < EENIT(RE

MEIA MI REAC! AN EFFEC

A REIE9 OF T!E BRAN AN

COMM(NICATION STRATEGIES <

EENIT(RE MEIA MI REAC! AN

EFFECTIENESS

"s a result of the wide s$ectrum of $roducts Microsoft offersD they communicate to a wide customer base) The com$any has im$lemented successful brand and communication strategies throughout their range of $roducts which &ary across softwareD entertainmentD de&ices and gaming etc) The modern mediami+ ty$ically used by Microsoft includes tele&ision cam$aigns and the internet to generate reachD mobileto dri&e engagement and social media to s$ark con&ersations and generate &irility)

Howe&erD in contrast with the other sectors they o$erate in Microsoft holds a smaller market share in theSmart$hone and tablet industries) This means that Microsoft needs to im$lement branding andcommunication strategies that focus on gaining new customers rather than customer retention)

The Microsoft Surface was launched with a tele&ision cam$aign that branded it as a fun de&ice withse&eral dancers on to$ of tables dancing to the tune of the integrated keyboards clicking on to the tabletwhich was similarly followed by the Surface $ro which also featured dancers but in a businessen&ironment) "lthough there was a strong in&estment in this cam$aign and it reached a large audience it $ro&ed to be ineffecti&e with the com$any retracting N7?? million worth of stock)

-nsur$risingly Microsoft shifted to an informati&e tele&ision cam$aign for the u$coming launch of theSurface 5 which has rebranded the $roduct as $roducti&ity focused tablet by focusing on the tabletsfeatures in com$arison with their com$etitors) The Microsoft Surface also has inde$endent $rofiles acrossthe three main social media $latformsJ which are AacebookD twitter and 2ouTube)

The Surface Aacebook $age has =@>D85> likes with 48D5@? $eo$le talking about itD the Twitter $age has5>7D;@4 followers and the 2ouTube $age has 85 $osted &ideos with =>D;8: subscribers as of 4;thOctober) The Surface 2ouTube $age di&ides its &ideos under the headings “Surface commercials” and“ife with Ser&ice”) The commercial &ideos are re$osted tele&ision ad&ertisements which gather e+tra

e+$osure)

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The “ife with Ser&ice” &ideos coincide with the rebranding of the Surface as they10gi&e real lifee+am$les of $eo$le using them in their &arious working fields which range from an ad&enture $hotogra$her to a medical student) n com$arison with their com$etitors) Microsoft is not gathering thesame e+$osure through social media) "$$leIs iPad Aacebook $age has :D=:4D:>5 likes) Microsoft needsto gather more interest in their social media sites in order to utilise social media as effecti&ely as their com$etitors)

Microsoft has inherited the #okia Smart$hone range through their recent ac%uisition) This lea&esuncertainty in determining the brand and communication strategies Microsoft will use) The main %uestionis whether or not the com$any will maintain the #okia brand name) This is a sensiti&e area becauserebranding the Smart$hones could result in a loss of loyal #okia users)

t is a feasible o$tion the Microsoft may kee$ the name and maintain brand and communication strategieswhich #okia $re&iously $ut in $lace) Howe&erD Microsoft will need to dro$ the name e&entually to a&oidconfusion among consumers as they attem$t to become serious com$etitors in the future)

-ltimatelyD Microsoft is left with an e+citing challenge in the future and success will largely be de$endenton their branding and communication strategies) The task will not be reaching their target audienceD asthe com$any has a strong communication infrastructure in $laceD rather the $roblem will be connectingwith customers and influencing them to buy MicrosoftIs $roducts)

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STRATEGIC OB"ECTIES FOR T!E NET

FIE ?EARS

GRO9T! IN T!E MOBIE EICES MARKET AIM

OF 1& B? 201=

MicrosoftIs $artnershi$ with #okia will enable it to mo&e forward in the mobile de&ices market) "t thestart of 5?4; the Bindows $hone held ;)5Q of global Smart$hone market shareD although this is a &erylow $ercentageD it still lea&es Microsoft in only third $laceD behind iOS and "ndroid) MicrosoftIs C1O.allmer addressed this issue at this yearIs financial analysis meeting) He described their low market shareas an Uu$side o$$ortunityI which most likely ser&ed as the key reason as to why Microsoft mo&ed tosecure #okiaIs $hone business)

The $artnershi$ means Microsoft is selling #okiaIs brand of Smart$hones including the umia 4?5?Dtheir newest modelD which has the best %uality camera of all Smart$hones) #okia $hones are currently

occu$ying 87Q of Bindows Phone Sales) Ho$efully from the Microsoft9#okia synergy will come with anew Smart$hone technology that will ri&al the iOS and "ndroid $hones)

REORGANISATION OF T!E COMAN?Ste&e .allmer issued a statement this year stating that he would ste$ down as C1O of Microsoft withinthe ne+t twel&e months) His de$arture marks the reorganisation of Microsoft as a whole) The com$anywill shift from a software maker into a de&ices and ser&ices com$any) n the ne+t fi&e years an entirefamily of new $roducts and ser&ices should be e+$ected from MicrosoftJ the smart$honeD 3bo+ and tabletare only the beginning)

TEC!NOOG? INNOATIONn order to kee$ u$ with their ri&als Microsoft ha&e &owed to continuously inno&ateD something whichthey ha&e e+$ressed regret in not doing in the $astL “ regret there was a $eriod in the early 5???s whenwe were so focused on what we had to do around Bindows V0istaW that we werenEt able to rede$loy talentto the new de&ice called the $hone” 6Ste&e .allmer<)

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Microsoft a$$lied for 58 -S Patents in 5?4; in an attem$t to gain ad&antage in inno&ation andincremental ad&ances) "s well as thisD Microsoft are rumoured to be working on a technology that sharesdata between deskto$D mobile and 3bo+ de&ices) Owning this data would curb concerns of digitalinformation being sold o&er the web as well as enabling Microsoft to build a digital $rofile of its users6similar to ,oogle<) The com$any hase +$ressed interest in going “beyond the cookie” and said their $riority is to de&elo$ technology that res$ects the interests of users)

RISK FACTORS IMACT ON FORECAST

FOR NET & ?EARS

FOREIGN C(RRENCIES AN GOBA ECONOMIES

Current forecastsD as seen abo&eD are e+$osed to foreign currency risk) "lthough Microsoft monitor their foreign currency e+$osures daily and hedge a $ortion of their international currency e+$osure 6"nnual

*e$ortD 5?44<D significant fluctuations in e+change rates between the -)S dollar and foreign currenciesmay ha&e a negati&e effect on net sales) 1merging markets are a major focus for MicrosoftEs internationalgrowth strategy 6"nnual *e$ortD 5?4?< and there are a number of risks in&ol&ed in targeting thesemarkets) E/eterioration of socialD $oliticalD labourD or economic conditions in a s$ecific country or regionEmay also ha&e a significant im$act on MicrosoftEs financial results 6"nnual *e$ortD 5?4?<)

E(ROEAN COMMISSION REG(ATION

The 1uro$ean Commission closely scrutinies the design of high9&olume Microsoft $roducts and the

terms on which Microsoft make certain technologies used in these $roductsD such as file formatsD $rogramming interfacesD and $rotocolsD a&ailable to other com$anies 6"nnual *e$ortD 5?4?<) Aor e+am$leD in 5??= the Commission ordered Microsoft to create a new &ersion of Bindows that didnEtcontain certain multimedia technologies and to $ro&ide com$etitors with instructions on how toim$lement certain Bindows communications $rotocols into their own $roducts) The commission limitsMicrosoftEs ability to inno&ate in designing its $roducts and allows com$etitors to co$y the functionalityof their $roducts leading to a $ossible decline in sales)

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INTEECT(A ROERT? RIG!TS AN ATENTS

Piracy outside the -)S is a significant issue as many countries laws are weak in $rotecting intellectual $ro$erty rights) This results in re&enues growing a lot slower outside the -)S market) The situation issimilar with regard to the lack of consistency and corres$ondence in $atent laws Borldwide)

COMETITION

Microsoft faces intense com$etition in the Smart$hone and tablet industry from the likes of "$$le andSamsung who are constantly inno&ating with new $roducts) Microsoft currently hold only ;);Q marketshare in the Smart$hone market and should look to hold 4>Q by 5?4:) n order to achie&e this they mustca$italie on their new synergy with #okia and focus on inno&ation when designing their new $roductrange in order to gain com$etiti&e ad&antage o&er "$$le and Samsung) Aurther im$ro&ements will alsoneed to be made to their Surface tablet range and o$erating systems as they currently hold only 4):Qmarket share in the tablet industry)

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C$#/%u,i$#

n recent timesD Microsoft has lost its dominant market $ositionD but we belie&e that this can be regained by using its $rior resourcesD as well as the new resources gained by the ac%uisition of #okiaD to channelits core com$etencies and regain market strength)

n terms of e+ternal analysisD we found that the e+isting threats and o$$ortunities showed that there wassco$e for market growthD es$ecially in terms of the low9cost smart$hone market) Be found that #okiahad a large following in the emerging economiesD and belie&e this is something that Microsoft shouldlook to e+$loit)

n com$etitor analysisD we highlighted the three main com$etitors to Microsoft in terms of o$eratingsystems) "lthough com$etition e+istsD we belie&e that ga$s still a$$ear in the market in terms of customisation) The recent ac%uisition of #okia also limits the amount of handsets that com$etitors cano$erate on)

"nalysis of current brand $ositioning and segmentation strategies showed us that the brand $ositioningre%uires adjustmentD as certain $ositions of the Microsoft brand ha&e been saturated) " new brand $osition can be achie&ed with a new range of de&ices) n terms of segmentationD the analysis showed aclear aim towards the $rofessional marketD which had to be taken into consideration when $re$aring our marketing strategy)

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.ibliogra$hy

htt$L((www)Microsoft)com

htt$L((www)Oracle)com

htt$L((www)"$$le)com

htt$L((msdn)microsoft)com(en9in(library(windows(a$$s(hh=@>=;;)as$+

htt$L((financials)morningstar)com(ratios(r)htmlXtYMSAT

htt$L((www)microsoft)com(in&estor(Com$anynfo(Strategy(default)as$+

htt$L((www)interbrand)com(en(best9global9brands(5?4=(.est9,lobal9.rands95?4=)as$+

htt$L((www)microsoft)com(in&estor(re$orts(ar4=(inde+)html

htt$L((www)com$uterworld)com(article(5>?8=:>(&ertical9it(a$$le9&s99microsoft9by9the9numbers)html

htt$L((www)le+iconnect)co)uk(

Marketing Strategies of Microsoft

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