Microsoft Critical Analysis First Last Name Section XYZ: TTH 12:30 pm

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NOTE: Please review the comments I have made to provide you guidance. The comments do indicate incorrect content in the analysis.

Background: Personal technology is changing, personal computers (PC) have reached maturity, and people

are beginning to use their tablets and/or phones as alternatives. As a result, despite Microsoft has a control

over operating system market for PC, it has experienced a drop in sales and profit. This decline indicates that

the tech giant must find a way in the post-PC era and must now look to tablets, search engines, and cloud

computer based software and/or operating systems to continue their dominance within the industry. While

Microsot is beginning to make a turnaround with the Surface tablet, BING, and Windows 10, it must create

sustainability in generating revenue going forward.

Strengths: Microsoft is one of the best brands in the industry. The company is skilled in developing hardware

and software to sell them worldwide through its established distribution channel. The company has a

significant amount of dollars to invest in new businesses. Its new operating system, Windows 10, is running

on over 270 million computers and its flagship products, Microsoft Office and previous versions of operating

systems are installed on more than 75% of the PCs. Sales revenue from its new product, Surface tablet, grew

55% last year. In addition to the tablet, Microsoft is beginning to see growth in their search engine BING

which provides an additional source of revenue.

Weaknesses: Microsoft’s biggest weakness is that sales and profit from its flagship products are declining. In

addition, the revenue from business software and Internet-based services, known as cloud computing, are

not growing as much as analysts expected. Another weakness for Microsoft is that although they are in the

market for tablets and mobile phones, the company is not one of the leaders in the market. And finally,

Microsoft is dependent on the sales of their software and products to generate revenue.

Core Competency: Microsoft’s core competency is its skill in developing new technology and commercializing

it in the world using its established distribution channel.

Threats: Demand for PC and associated software, such as MS Office, is shrinking. Competitors, such as Google

and Apple, are introducing innovative products and challenging Microsoft as a dominant technology

Commented [S1]: Background information should be less than 1/3rd page.

Commented [S2]: Strengths are about skills or resources or what the company is good at.

Commented [S3]: Weaknesses are about lack of skills or resources or what the company is not good at.

Commented [S4]: Core competence is what unique skills or resources the company has which customers value and competitors cannot

Microsoft Critical Analysis First Last Name Section XYZ: TTH 12:30 pm

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company. Google is offering free alternatives to Microsoft’s paid software based on a business model that

rely on advertisements to generate revenue. In addition, Apple is a dominant market share leader for both

tablets and mobile phones.

Opportunities: Microsoft has several opportunities. First, customers are adopting subscription based

systems and cloud computing. Second, the demand for tablet computers are growing. Third, search engines

usage is becoming ubiquitous, and consumers as well as businesses are relaying more and more on

technology. Finally, new technology is being invented at a rapid rate.

Problem Statement: Microsoft must focus on the tablet market to overcome its dependent on revenue from

its flagship Windows operating system and double its profit from the tablet business in three years.

Alternative Solutions: One solution is for Microsoft to be a broad differentiator in the tablet market.

Another solution for Microsoft is to be a differentiator with a product lifecycle focus in the tablet market.

Target Segments: Tablet industry comprises of many segments including: high end/high performance

segment, low price segment, slate tablets segments, mini-tablet segments, convertible tablet segments,

gaming table segments, and operating system based segment.

Recommendation: Microsoft should be a Differentiator with Product Lifecycle Focus because new

technologies are invented rapidly, and existing technology is becoming out of date in a short time. Moreover,

developing new hardware and software technologies, as well as commercializing these technology

worldwide, is Microsoft’s core competence. As a result, profit margins are higher in new technology based

products and significant portion of consumers as well as businesses market are demanding and adopting

newer products. Microsoft should introduce the products in high/end/high performance and gaming

segments and eventually move the product to low cost segment.

Implementation: To implement this strategy, Microsoft should develop tablet computers with excellent

design and superior configurations compared to the products sold by its most competitors. For example,

Microsoft tablet should have one of the highest resolution screens, a top of the line processor and other key

Commented [S5]: Threats are changes in the environment, which may hinder company’s ability to create, communicate or deliver products in the market. It is not about lack of skills or resources.

Commented [S6]: Opportunities are about changes in the environment, which may help company create, communicate or deliver products in the market. It is not about what action the company should take. Describe in terms of how the environment is changing.

Commented [S7]: You need to state a financial goal.

Commented [S8]: I recommend you propose strategic alternatives. Capsim decisions you make, such as, Increasing R&D or Advertising are not strategy. They are tactics. Hence, you should not propose such alternatives here.

Commented [S9]: You need to list a few segments, not a complete list. Think about how customers’ needs are different in the industry. You may want to Google “what are the segments in XYZ industry”.

Commented [S10]: You need to justify one of the proposed alternatives and describe how to implement. Please note how the implemented of description of Differentiator with Product Life Cycle is adopted from the description given in Section 12 of Capsim user’s guide.

Microsoft Critical Analysis First Last Name Section XYZ: TTH 12:30 pm

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components that customers’ desire. To achieve this goal, Microsoft should hire individuals who are known to

be industry experts, as well as employees who have advanced degree and education from top ranked

schools, to develop new products. Microsoft should price its tablet computers in the top 25% price range and

target on the road business customers and gaming consumer segments that need higher performance from a

tablet. Microsoft should sell tablets through many retail and online outlets worldwide. Microsoft should also

advertise so that more than 90% of the targeted segment are aware of its tablets. Finally, Microsoft should

keep up with the new development in technology and create new version/model of tablet computers

frequently. Microsoft should also invest in flexible manufacturing facilities to assemble tablets or contract

with several hardware manufacturing companies to ramp up production of new tablets as needed.

Tracking Metrics

Intermediate: Microsoft should conduct survey to verify that its tablets are known around the world and

perceived as one of the most superior tablets available in the market. Microsoft should compare the price of

its tablet computers with those of its competitors and verify that prices of Microsoft tablets are in the top

25% price range. Microsoft should also review delivery records to verify that its new tablets have been sold

worldwide and manufacturing capacity is aligned with the demands. Microsoft should verify that new

technological inventions are adopted in its tables with in few months of availability.

Conclusive: Microsoft should verify that its profit from tablet business has doubled in the last three years.

Take Away

I learned ….

Commented [S11]: Here you need to state how would you verify that the tactics proposed for implementing the strategy are realized. For example, how would you verify that your cost is below (or above) average if you are a cost leader (or a differentiator)?

Commented [S12]: Here you need to state how would you verify that the financial goal(s) stated in the problem statement are met.

Commented [S13]: You need to write a short paragraph