RUNNING HEAD: MICROSOFT BUSINESS ANALYSIS Adventure Works Marketing Plan

Microsoft Business Analysis1

Executive Summary

Computers are one of the most effective way of communicating. The software industry is fairly new and has extreme potential for growth. It has long been a dream of many upcoming companies to be part of this quickly progressing market. Gladly Microsoft has been one of the companies that have made this dream a reality. Today over 2.8 billion of customers are using a computer or portable device to browse the World Wide Web from all over the world. Microsoft is working on becoming the top software and hardware providers. Currently about 92% of computer users are somehow connecting with Microsoft. This can be by browsing with Internet Explorer, working with Windows, or gaming with Xbox. The idea of combining all technological programs and devices under one company was a particularly unique idea at the beginning of the business and the goal for similar companies in the industry. In 1994 Microsoft became an official threat to all competitors in the computer and software industry At that point Microsoft was just in the beginning stages of its innovative strategies. Starting with a dream of having a personal computer in each home, then merging into providing accessibility to internet and access at any location; Microsoft has contributed to a big portion of the worlds advancements in technology. However, it is still heavily involved in personal computers and software rather than advancing into portable and mobile devices. Microsoft has encountered many challenges and has numerous competitors. Most computers are equipped with Microsoft operating systems and word processing program, plus a majority of the browsing being done is with the use of Internet Explorer. The brand recognition is definitely strong and the company has the opportunity to take advantage of this momentum to enter a new market. Currently, Apple seems to be one of the biggest competitors when it comes to mobile hardware and operating systems. Microsoft has HTC under its belt and it is working on a good release strategy to enter that market with full force. The mission and vision of Microsoft is very much still very much alive. It wants to provide easy and accessible information for its users but also provide new, fresh, and innovative products to the public. This company has been one of the firsts in the industry and has remained one of the tops in its market ever since. There is still a lot of room for growth and with the proper marketing and strategies it can become number again.

Table of Contents

Executive Summary.1Table of Contents.3Section 1Company History... 4Company Mission.. 5 Company Vision and Values..... 5Section 2P.E.S.T.E.L. 7S.W.O.T. 10 Five Competitive Forces.13 Section 3Value Chain.. 15Corporate Strategies . 16Competitive Strategies ..............................................16Offensive and Defensive... 17Section 4Microsoft's Competitors ... 17Financial Becnchmarking.. 18Key Strategic Issues .. 22Alternatives ... 23Recommendations ..24Conclusion .25

History In 1975 Bill Gates and Paul Allen created a partnership called Microsoft with a huge vision that would have a desktop computer in every home. In 1980 IBM partners with Microsoft to create an operating system and MS-DOS was developed as the software that manages the current hardware. By the early 1990s it had sold more than 100 million copies but it was still difficult to operate. Around the same time, the next upgrade was released called Windows 3.0 with a new graphical interface and word processing. Microsoft became public mid 1990s and it had become the most powerful and profitably companies in American history. Even during the Great Recession of 2008-09 its net income had grown to more than $14 billion by the end of the fiscal year. (Microsoft, 2013) However, this rapid growth was not taken well by competitors and they began complaining about unfair competition. The U.S. Justice Department concluded with a settlement for Microsoft to change some of its sales practices. Microsoft moved into internet software and created a program called Internet Explorer to surf the World Wide Web. This product was introduced for free and Microsoft was aggressively pursuing any computer maker and internet providers for distribution. Microsoft continued to prevail regardless of the fierce competition. Competitors again became overwhelmed with the companys continued success and accused them of violation the previous decree from 1995. Microsoft was found in violation of the Sherman Antitrust act for attempting to maintain a monopoly. In 2001 Microsoft entered the gaming world by introducing Xbox an electronic game console which was followed by Xbox live a broadband gaming network. By 2010 Xbox was the most-used game console in the American home. Although the gaming world was overtaken by Microsoft, competitors with alternate operating systems were becoming more of a threat. Google had taken the lead on the search engine market. As a defensive move, Microsoft offered to buy Yahoo for $44.6 billion, but this proposal was rejected and a separate agreement was achieved for Yahoo to handle premium advertisements for Microsofts site. On another end, Microsoft moved into cloud computing where application software and data storage are provided by centralized internet services. Microsofts fist move was with its Windows Azure platform. In 2011 Microsoft bought the internet voice communication company Skype for $8.5 billion, which at that time was the largest acquisition in Microsofts history. The company has been going through ups and downs with Bill Gates assigning a new CEO Ozzie Ballmer and now Satya Nadella has become the new CEO in 2014. The company retained its top spot in both business and consumer segments, including operating systems, productivity software, and online gaming services.MissionTo enable people and businesses throughout the world to realize their full potential. (Microsoft, 2013) The mission statement is considered a commitment to its customers. They deliver on that commitment by striving to create technology that is accessible to everyoneof all ages and abilities. Microsoft is one of the industry leaders in accessibility innovation and in building products that are safer and easier to use. Vision Statement To build a customer service oriented professional services company that specializes in IT consulting. Specifically managed services and sales force automation. The focus will remain on a successful strategy, education its users, and customer satisfaction. Create slow consistent growth that will build long-term relationships with both the clients and team members. Accessible technologyEnables individuals to personalize their technology to make it easier to see, hear, and use. Accessibility and accessible technology are helpful for individuals who experience visual difficulties; pain in the hands or arms, hearing loss, speech or cognitive challenges; and individuals seeking to customize their computing experience to meet their situational needs and preferences. StrategyAccessibility, as part of overall usability, is a fundamental consideration for Microsoft during product design, development, evaluation, and release. Microsoft endeavors to integrate accessibility into planning, design, research, development, testing, and documentation (Microsoft, 2013). The idea is to create an open and transparent communication to engage with stakeholders and resolve accessibility issues. It creates an international accessibility professional society to produce more accessible devices, application, and content for people of all abilities. Microsoft believes that accessibility must mature to form a more internationally recognized profession. Promoting innovation by reducing complexity of accessible development, engaging in research development, people-centric design, collaborations, and supporting the industry (Microsoft, 2013).

(Forbes)

PESTEL AnalysisPolitical FactorsMicrosoft is a politically active company. It sponsors the Microsoft Political Action Committee (MSPAC), a bipartisan organization that contributes to campaigns of federal, state, and local candidates. MSPAC supports those candidates who share Microsofts view on public policy. MSPAC allows Microsoft employees and shareholders to participate more effectively in the U.S. political process by keeping its members informed about important issues and government decisions that can affect Microsofts business. MSPAC members also have opportunities to support public policy positions that are important to Microsoft (Corporate Citizenship).MSPAC also supports candidates who serve as congressional or legislative leaders or represent districts where Microsoft has a major business presence. Microsoft claims its participation in the political process is transparent. For reasons that are clear and justifiable to its shareholders and the public, Microsoft regularly files and publishes reports that detail its advocacy activities. The disclosures include consultant fees, lobbying expenses, and trade association dues spent on advocacy (Corporate Citizenship).Economic conditionsThe market for Microsofts products and services is highly competitive. Because technology advances rapidly, Microsoft must evolve and adapt with an ever-changing environment to remain competitive. In July 2014, Microsoft announced a restructuring plan that would enable it to streamline its engineering processes, move faster and more efficiently and simplify its organization. With these changes, Microsoft has some concern that the investments it makes in devices and infrastructure will increase its operating costs and decrease its operating margins (2014 Annual Report).Microsoft is exposed to economic risk from foreign currency exchange rates, interest rates, credit risk, equity prices, and commodity prices. A portion of these risks is monitored daily and typically hedged to maximize economic effectiveness of its foreign currency positions (2014 Annual Report).Sociocultural forcesMicrosoft has been named one of the 100 Best Companies to Work For seventeen years in a row by Fortune magazine (Best Companies 2014). Employees confirm that supportive benefits and a welcoming culture remain consistent across the company. Microsoft continues to attract professionals seeking the opportunities in a global organization at the forefront of technology. One employee proclaims, "The benefits are outstanding, and the ability to impact the world in a positive way cannot be beat by any other company" (Corporate Citizenship).Microsoft also has an enduring commitment to fulfill its public responsibilities and to serve the needs of people in communities worldwide. Organizations around the world consistently recognize Microsoft as one of the leading global corporate citizens. In just the past few years, Microsoft has been recognized for the following citizenship awards: 2014 CRs 100 Best Corporate Citizens, Corporate Responsibility Magazine (Microsoft named among top 5) 2014 Human Rights Campaign's (HRC) Corporate Equality Index 100% rating for 9th consecutive year 2013 Worlds Best Multinational Workplaces by the Great Place to Work Institute 2013 Worlds Most Ethical Companies, The Ethisphere Institute, New York 2013 NYSE Euronext Vigeo US 50 Index (50 most advanced U.S. companies on Environmental, Social, and Governance performance) 2013 NASDAQ OMX CRD Global Sustainability Index (QCRD) (Corporate Citizenship).Technological factorsMicrosoft conducts research and develops advanced technologies for software, devices, and services. Its success is based on its ability to create new and compelling products, services, and experiences for its users. Microsoft is an innovator with a goal of bringing products and services into new geographic markets. It invests in a range of emerging technology trends and breakthroughs that offer significant opportunities to deliver value to its customers and growth for the company. Microsoft maintains its long-term commitment to research and development across a wide spectrum of technologies, tools, and platforms spanning communication and collaboration, information access and organization, entertainment, business and e-commerce, advertising, and devices.In addition to Microsofts main research and development operations, it also operates Microsoft Research which is one of the worlds largest computer science research organizations. Microsoft Research assesses key technology trends which lead it to significant opportunities to drive future growth in productivity, platforms, cloud computing, search engine, communications, and smart connected devices. Microsoft Research also works in close collaboration with top universities around the world to advance the state-of-the-art in the computer science sector (2014 Annual Report).

Environmental forces In May 2012, Microsoft made several commitments to reduce its carbon footprint (Corporate Citizenship). Microsoft follows strict policies to ensure that the company remains in full compliance with international environmental regulations and the specific environmental requirements of each country/region where it does business. When it is feasible, Microsoft conserves natural resources by using recycled materials and supplies, efficiently using energy, and participating in recycling programs for Microsoft products after they have served their useful life. Microsoft encourages and supports the sustainable use of renewable natural resources. By recycling at company facilities, all waste is safely and responsibly handled and disposed of (Corporate Citizenship). Microsofts environmental policies protect, conserve, and sustain the world's natural resources.Legal and Regulatory FactorsMicrosoft adheres to applicable national and local laws and regulations. Its internal policies and practices ensure adherence to a wide range of applicable requirements to keep it accountable and transparent. Microsofts Regulatory and Public Policy Committee assists its Board of Directors in overseeing the Company's policies and programs that relate to certain legal, regulatory and compliance matters, business risks related to privacy and cybersecurity, and public policy and corporate citizenship. The Regulatory and Public Policy Committee are responsible for reviewing and providing guidance to the company with respect to legal, regulatory, and compliance matters concerning antitrust, privacy, security, and employment and immigration laws. The Committee also reviews the companys policies and programs related to corporate citizenship, environmental sustainability, corporate social responsibility, supply chain management, charitable giving, and political activities and expenditures (Corporate Citizenship).

SWOT ANALYSISStrengthsWeaknesses

Brand loyaltyUser-friendly softwareStrong research and development capabilitiesStrong financial performanceLawsuitsProblems with releases over the yearsLimitations on browsersMobile phones and tablets

OpportunitiesThreats

Growing cloud computing marketDesktop marketDemand for smart phonesAcquiring other companies

CompetitionLawsuitsChange in consumer needs/wants

StrengthsConsumers are brand savvy. Fortunately, for Microsoft, with brand loyalty comes pricing power. Microsofts brand loyalty has allowed it to gain a competitive advantage which has paid off as it controls 92% of the desktop operating system market share (2014 Annual Report). Microsoft has a strong research and development department which includes key research areas such as algorithms and theory, hardware development, human-computer interaction, machine learning, adaptation and intelligence, multimedia and graphics, systems, architecture, mobility, networking, security, cryptography, smart connected devices and cloud computing among others. The companys innovation investments focus on the emerging technology trends and breakthroughs across a wide spectrum of technologies, tools, and platforms. WeaknessesVarious legal proceedings have cost Microsoft a lot of money. Lawsuits relating to product design, manufacture and performance liability, employment issues and intellectual property rights, have resulted in significant legal costs. Huge penalties could adversely affect its profitability. Microsoft has received brutal criticism for some of its releases over the years, including problems with stability, security and compatibility. Windows ME and Windows Vista both made bad first impressions. Though Microsoft released patches to address many of those problems, many people had already decided to avoid them. Fortunately for Microsoft, it's retained some respect with releases that have left a more positive impression, like Windows XP and Windows 7 (Strickland and Crawford). At one time, Microsoft's Internet Explorer had over a 90% market share, but its share reduced dramatically when Google and Netscape entered the market. As of August 2013, Internet explorers market share reduced to 25.51%, as compared to that of Google Chrome, which enjoyed the leading market position with 42.85% market share (Financial and Strategic Analysis Review). The declining market share could be attributed to the application of Internet Explorer which is limited to only Windows operating system, while Google's Chrome and Mozilla's Firefox also run on Mac and Linux. Such limitations could affect the usage of browser across several consumer lines and further mitigate its market share.OpportunitiesMicrosoft has the advantage if consumers prefer to buy the latest and greatest computer hardware. Its products tend to have more features because it relies on the computer's native processing power to run. Beside the Windows OS, Microsoft produces the Office suite of productivity software, software for computer servers and the Web browser Internet Explorer. Another important Microsoft product is its line of Xbox consoles and games. The video game market is one area of strength for Microsoft that Google has yet to touch.Microsoft could also capitalize on the growing demand for smartphones. According to in-house research, global smartphones sales reached over 718 million in 2012, and are expected to reach 1.9 billion by 2018 (Financial and Strategic Analysis Review). Considerable demand for smartphones is expected from developing countries, particularly in the Asia-Pacific region. Other emerging economies expected to contribute to a considerable increase in smartphone usage are China, India and Brazil.ThreatsThe software market is highly competitive, which may impact a companys performance. Microsoft faces competition in all its segments which may make it susceptible to market pressures, which leads to a loss in the market share and decline in revenue. Its key competitors in Windows Live software and services include Apple, Google and Yahoo. Its Internet Explorer product competes with browsers developed by Google (Chrome), Apple (Safari), and Mozilla (Firefox) (Financial and Strategic Analysis Review). Some of Microsofts key competitors for its Microsoft Office products include Adobe, IBM, Google, Apple and Oracle. In the entertainment devices business, it competes with Nintendo and Sony. The technology market is subject to rapid changes, and companies must continuously introduce new products to the market. In order to remain competitive and increase its sales, Microsoft will need to continue to adapt to a rapidly changing business environment.

The Five Forces Model of CompetitionThe most powerful and widely used tool for diagnosing the principal competitive pressures in a market is the five forces model of competition. This model holds that competitive pressures on companies within an industry come from five sources: (1) competition from rival sellers, (2) competition from potential new entrants to the industry, (3) competition from producers of substitute products, (4) supplier bargaining power, and (5) customer bargaining power (Thompson, et al., 2014, p. 49). Competition from rival sellersMicrosoft is a diversified corporation with many products and services in the technology sector. Its primary competitors include well-known brands such as Apple, Google and IBM, among others. Microsoft produces hardware and software. Its produces tablets designed to compete with similar devices made by other companies, such as Apple. Microsoft produces a variety of computer accessories which compete with other companies specializing in this area, such as Logitech. Microsoft also competes with Google with its Bing search engine.

Competition from potential new entrants to the industry Microsoft will not have to worry much about the threat of new entrants into the industry. It has held over 90% of the market share with its operating system and browser. Competitors would have a hard time after any accessed the market in catching up to Microsoft. Also, there are many economic, technological and legal barriers which may deter new entrants.Competition from producers of substitute productsMicrosofts Windows operating system is unique in terms of users trying to find a comparable product. Users who were interested in changing their products would have to completely change their computer. Supplier bargaining powerThe main suppliers for the computer industry are hardware device suppliers and software tool suppliers. Principle hardware components are mainly obtained from a sole supplier, like Intel. Microsoft installs Windows in every out-of-the-box PC sold. Since there is not another operating system like Windows for the PC, PC manufacturers have no other options: they cannot switch to another product; there are no substitutes. Customer bargaining powerLuckily, Microsofts reputation in the industry helped it gain a competitive advantage. It has such a monopoly on the PC operating system game that consumers have no choice but to purchase Windows. The buying power of customers is limited because there are few alternatives.

Analysis Section

Microsofts is known for providing operating system and office applications. Software application is the core of their business with their Windows operating system but Microsoft must to adapt to stay competitive in this rapidly changing technology industry. Microsoft needs to find other services and products that will provide a continuous revenue stream. The future of Microsoft is based on how the company evolves to compete in a market similar to Apple providing an integrated product that with their software that allows for control of content and services through mobile devices and home entertainment. The strategy for Microsoft is to deliver a compelling consumer experience to expand into new markets.Todays Microsoft homepage, www.microsoft.com, provides an overview of their products and services available for consumers, including businesses. The website highlights Microsofts value and related product support services, referred below:

Figure 1 - Microsoft value chainEvaluating Microsofts value chain, figure 1, the company is not just a software company. Microsoft is a service and device company similar to Apple and Google. This value chain, figure 1, highlights the potential strategic and tactical plan for senior managers within the company. The implementation of the strategic vision by the management team drives towards achieving performance targets. For Microsoft, the companys strategic vision is to deliver integrated services through their software, content aggregation and devices while creating new innovation to be a leader in the technology industry. Microsoft offers different products and services. The corporate strategy for Microsoft requires analyzing the future trend of technological trends of the consumer and business. This is important to define the strategic objectives and vision for their company. Unfortunately, the technology industry is a rapidly evolving and changing with new inventions that before a product is launched that it may already be obsolete. How does Microsoft strategically plan for the future? It will require strategic planning with an efficient coordination when making a corporate decision around the each different products business unit strategy. Microsoft has an array of product and devices operationally supported by different business units. These business units are the building blocks that can assist with the strategic plan using new innovation or products. The strategic plan will require defining the competitive strategy. Like other technology companies, Microsoft follows vertical integration. The company has been playing a defensive strategy competing with Apple in the space of mobile and tablet devices. Microsoft offensive response against Apples devices is the introducing the Surface PCs and tables and mobiles to consumer market. Another offensive response is the providing content aggregation of platforms, software and hardware with their products such Xbox, Surface, tables and mobiles. Although Microsoft has a retail store, one area that Microsoft needs to consider an offensive strategy is opening a retail store front similar to Apple store. This offensive strategy is going to be a challenge since Microsoft has business relationships with manufacturers of personal computers and retail stores. Microsoft does not want to appear to be competing with these businesses.Microsofts success with differentiation strategy is to make sure that the competitors are not able to copy their technology easily. Therefore, Microsofts competitive strategy will offer new technology or offer new product to gain advantage over the competitors. Broad differentiation strategy will provide Microsoft competitive edge against their customers. Microsoft can achieve success with the firms existing brand quality reputation paired with the operational and business structure. Microsoft is a leader in research and development. The company employs very highly skilled development team who are also think creatively to provide new innovation. The company has a strong sales department that will support the implementation of the product and services. This team will be responsible to bring the next generation product or service to market. Microsofts CompetitorsDue to Microsofts varying efforts, they experience competition from several different technology sectors, including hardware, software, operating systems, search engines, cloud computing, and cellular. Their big competitors include Apple, Google, Oracle, IBM, SAP, Red Hat, Samsung, LG, Sony, and Nintendo to name a few (Investopedia, n.d.) Since Apple is Microsofts biggest competitor, they will be the main comparative factor.Apple and Microsoft compete in just about every area imaginable. Apple produces hardware, software, and cellular products, in addition to a robust operating system for all of their brands. They are well-loved by their loyal fans. Microsoft has to compete against Apples impressive technology lineup: iOS, Mac, iPad, iPhone, iPod, iTunes, and soon, Watch. Microsofts competing brands include Windows OS, PCs, Surface tablet, Windows phones, and now Band, which is similar to Apples Watch. Microsoft also produces the XBox gaming system, of which Apple does not have any competing products. Additionally, Microsoft produces their popular Office Suite of business and personal software for the Apple platform. Apple also has developed a pay system called Apple Pay, of which Microsoft has developed a similar system that is rarely used or discussed (Hoffman, 2014).Financial Benchmarking Microsoft Microsoft has experienced steady financial growth, while at times experiencing rapid growth, over the last five years. Based on the Microsoft 2014 Annual Report (Microsoft, Financial Highlights, 2014), company revenues (recorded in millions) have steadily increased: $62,484 [2010]; $69,943 [2011]; $73,723 [2012]; $77,849 [2013]; and $86,833 [2014]. Microsofts revenues have improved by $24,349M over the last five years, which is approximately a 28.04% increase overall. Upon further detailed analysis, revenues have increased 10.66% from 2010 to 2011, 5.13% from 2011 to 2012, 5.30% from 2012 to 2013, and 10.35% from 2013 to 2014. This is an average increase of 7.86% from year to year. Microsoft made the following note on their annual report, related to revenues (Microsoft, Financial Highlights, 2014): On April 25, 2014, we acquired substantially all of Nokia's Devices and Services business ("NDS"). NDS has been included in our consolidated results of operations starting on the acquisition date.Microsofts total assets have impressively improved by $86,271M over the last five years, as outlined in their 2014 Annual Report (Microsoft, Financial Highlights, 2014), and are recorded in millions: $86,113 [2010]; $108,704 [2011]; $121,271 [2012]; $142,431 [2013]; and $172,384 [2014]. That reflects a 50.05% increase! The average increase from year to year has been 15.85%, with the detailed analysis showing 20.78% from 2010 to 2011, 10.36% from 2011 to 2012, 14.86% from 2012 to 2013, and 17.38% from 2013 to 2014. Microsoft records their liabilities as long-term obligations which have increased by $23,184M, or 62.70%, over the last five years. The Microsoft 2014 Annual Report states how much they have increased, recorded in millions: $13,791 [2010]; $22,847 [2011]; $22,220 [2012]; $26,070 [2013]; $36,975 [2014]. Microsofts long-term obligations have experienced a 39.33% average increase from year to year, while each years actual increases have been: 39.64% [2010 to 2011]; -2.82% [2011 to 2012]; 14.77% [2012 to 2013]; and 29.49% [2013 to 2014]. Note that from 2011 to 2012, their liabilities actually decreased.Microsofts stock prices have risen gradually over the last five years. The current price as of February 13, 2015 is 43.87, while the closing price on February 1, 2010 was 28.41 (Yahoo Finance, 2015). Thats an increase of 15.46 points. Generally, Microsofts stock prices have experienced a regular uptick, with several periodic dips: May-June 2010, August-September 2010, November 2010, January-March 2011, May-June 2011, August 2011, November 2011, March-May 2012, July 2012, September 2012, November 2012, April-June 2013, August 2013, October 2013, December 2013-January 2014, March-April 2014, and September-December 2014 (Yahoo Finance, 2015). The dividends per share paid out by Microsoft in 2014 were consistently 0.28, which was a total of $9,270M, while the dividends per share paid out in 2013 were consistently 0.23, which was a total of $7,695M (Microsoft, Financial Review, 2014). Financial Benchmarking AppleApple records their revenues as net sales, which have more than doubled over the last five years, as outlined in their 2014 Annual Report (Apple, Selected Financial Data, 2014): $65,225 [2010]; $108,249 [2011]; $156,508 [2012]; $170,910 [2013]; and $182,795 [2014]. Their net sales reflect a 64.32% increase over the last five years, with an average increase from year to year of 21.38%. Each year, they have increased net sales by: 39.75% [2010 to 2011]; 30.83% [2011 to 2012]; 8.43% [2012 to 2013]; and 6.50% [2013 to 2014].Like Microsoft, Apples total assets have impressively increased by $156,656M, or 67.57%, over the last five years, and are recorded in millions: $75,183 [2010]; $116,371 [2011]; $176,064 [2012]; $207,000 [2013]; and $231,839 [2014]. The average increase from year to year has been 23.74%, with the detailed analysis showing 35.39% from 2010 to 2011, 33.90% from 2011 to 2012, 14.94% from 2012 to 2013, and 10.71% from 2013 to 2014. As assets have increased dramatically, so have Apples liabilities, $92,900M over the last five years. The liabilities have increased by 77.23% since 2010, and the Apple 2014 Annual Report states how much they have increased, recorded in millions: $27,392 [2010]; $39,756 [2011]; $57,854 [2012]; $83,451 [2013]; $120,292 [2014]. Apple has experienced a steady 30.92% average increase from year to year, while each years actual increases have been: 31.10% [2010 to 2011]; 31.28% [2011 to 2012]; 30.67% [2012 to 2013]; and 30.63% [2013 to 2014].Apples stock prices have also risen gradually over the last five years. The current price as of February 13, 2015 is 127.08, while the closing price on February 1, 2010 was 194.73 (Yahoo Finance, 2015). Thats an increase of 67.65 points. Apples stock prices have experienced a steady increase, with less periodic dips than Microsoft: May-July 2010, October-November 2010, March-June 2011, August 2011, November 2011, March-April 2012, July 2012, October 2012, December 2012-February 2013, June 2013, August-September 2013, November-December 2013, March-April 2014, June-July 2014, September 2014, and December 2014 (Yahoo Finance, 2015). Many of these dips occurred around the same times as Microsoft, which indicates an overall market dip. Comparably, Apples stocks have been more stable and historically fetch higher prices than Microsoft.Apple paid out dividends totaling $11B in 2014 and $10.5B in 2013 (Apple, 2014). The dividends per share paid out by Apple in 2014 were 0.44 during the first and second quarters, while they increased to 0.47 during the third and fourth quarters (Apple, 2014). The dividends per share paid out in 2013 were 0.38 during the first and second quarters, while they increased to 0.44 during the third and fourth quarters.

(Source: Google Search: Microsoft stock history)

(Source: Google Search: Apple stock history)Key Strategic IssuesMicrosofts biggest change and subsequent challenge this past year has been the onboarding of their new CEO Satya Nadella. Nadella started the job last February and his mantra since taking the helm has been mobile first, cloud first (Tu, 2014). In an article for GeekWire, Todd Bishop (2014) outlined a top five listing of hurdles the new CEO would face in his first year, which include integrating newly-acquired Nokia, improving the companys outlook as an innovator, defending its current standing, navigating new internal politics, and deciding which areas to focus. Microsoft strives to do too much and has too many branches of the company in which to concentrate efforts. This lack of focus dilutes Microsofts edge as a technology leader. Their competitor, Apple, also has a lot of projects and branches, but they have much more of a focus and a sense of the technology sectors in which they want to concentrate. Apples basic strategic problem, according to Tim Worstall (2013), is whether they should concentrate on market share or profit margin.AlternativesSince acquiring Nokia, Microsoft has created a mobile division that produces phones that run Windows. However, they could be biting off more than they can handle with having a cellular phone division. Apple and Google control 95% of the mobile phone market share, as of December 31, 2014, according to an analysis by Consumer Intelligence Research Partners (Levin, 2015). That level of domination by Apple and Google leaves very little room for Microsoft to infiltrate, much less succeed.Recommended Course of ActionAs stated previously, Microsoft has too many projects and too little focus. Adding and concentrating efforts in the cellular division seems like wasted, fruitless effort. It seems Microsoft is likely to waste a lot of time and money making their mark in the mobile world, and should just leave it to Apple and Google to continue competing.Conversely, Microsoft should concentrate on what they know best, which is software and complementary hardware. Microsoft has carved a niche for itself in gaming with their XBox brand, including the recent acquisition of Mojang, the company that produces Minecraft. Microsoft has already seen a dramatic uptick in revenues of 79 percent since procuring Mojang near the end of 2014 (Khani, 2015)! The decision to purchase Mojang seemed smart, and the return on investment sounds very promising, therefore Microsoft should consider developing other key partnerships and shift their focus to the gaming sector.The long term future success of Microsoft will be dependent on the companys defensive strategy. The focus for Microsoft should be on their strength to provide technology solutions to business segment and expand the Xbox with new innovation. For example, Microsoft is already partnering with businesses to provide solutions. A most recent example is the retail customer deployment presented at the National Retail Federations Annual Convention & EXPO. Microsoft Corp. and CKE Restaurants Inc. demonstrate the self-order kiosk solution running on Windows 8 devices that enables Hardees (Carls Jr.) customers to place and customize their orders. The self-order kiosk pilot is deployed across 30 restaurants. This kiosk provide point of service (POS) purchasing from viewing the menu, customizing their order, and paying for their transactions. The order is sent directly to the kitchen for order fulfillment for a quicker service. The benefit for this self-service kiosk is the flexibility to have an extra cashier line without assigning an employee to take orders. The kiosk has added features. It is configurable to service other languages based on the stores demographics. It is also a device to assist employee to clock in and out for their shifts and breaks. This new retail self-service kiosks has a strong strategic growth potential to sell across many business segments from restaurants, medical office, pharmacy, bakery, department stores, etc. The ability to integrate the sales data with the Microsoft office suites to create reports and financial dashboards will provide a competitive edge since Apple does not have a strong presence in servicing businesses.On the direct to consumer strategic growth, Microsofts vision for the future of computing is HoloLens (Lisa Eadicicco, 2015). In January 2015, the company showed the headset that allows user to virtually create an environment in 3D. Microsoft has followed in the footsteps of Googles Glass, and likely will take the lead, on wearable computing technology with the HoloLens. This type of technology is unlike anything coming out on the market in the near future. The demo showed the real time creation of holograms where a user can interact by reaching or touching objects. The HoloLens has potential business use, as it could be used for collaboration scenarios in the science, engineering, and technology sectors, to name a few. NASA has been involved with the production and will likely use the HoloLens when it rolls out (Moorhead, 2015). Microsoft should take Patrick Moorheads (2015) advice by having Microsoft demo the HoloLens in their stores, which will drive customers to the stores for more exposure to both the store and the Microsoft products. With thorough demonstrations and education, along with the endorsement of NASA and other big-name companies, Microsoft could be the leader in the virtual visual market. If Microsoft can bring this technology to market together with their Xbox, this will be a fast selling consumer device that will bring Microsoft in the defensive strategy. Both, the self-service kiosk and the HoloLens are two examples on how Microsoft can grow their business in the future. These two devices has strategic growth potential both in US and internationally. Understanding the international culture, their demands, and what attracts them will ensure successful marketing. With new products and fresh ideas, Microsoft will be able to overcome any challenges that it may encountered. It is important to understand how long the company has been in business and how long it has remained on the top of the charts. Working on reducing the threats and enhancing its assets Microsoft is ready for the future. Works Cited

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