Capstone Integrated Management

Basically, the company is planning to target the small and large organizations equally to provide them with the Cloud ERP facility by which the employee productivity would be increased. The new product expansion in the American market will bring the positive fluctuations in the economy. The company is planning to design the powerful strategy and the strong social media campaign to advertise it in estimated timelines and deadlines. The company vision and mission statement clearly indicate that it always put their customers as the highest priority.

2. Company Summary

a. History of Company

Microsoft is a highly successful American corporation. The company started with Bill Gates and Paul Allen, they both were childhood friends and also they are co-founders of the corporation (INDONESIA, 2014). They started the business in that age when it was hard to access the computer and they have a pair of the computer (Gaskin & Geoghan, 2016). Then they started their own small company by selling computers to the city of Seattle. In 1975, 29 July Bill Gates used the word Micro-Soft and then with the partnership of Paul Allen, the company name was registered as Microsoft. The company started with BASIC coding language development and then it designed a lot of product including the very first product “operating system” (Kvåle, 2016).

The company also produced the first-word processor which named as Multi-Tool Word. The company is highly famous because of its business expansion. The corporate is top rated in the entire world due to its product/services expansion in the global world. The company is operating on a large scale which is the major stimulator of its product expansion. Microsoft planned to expand its product to win the loyalty and hearts of its consumers once again. The company major goal is the technology exploration to facilitate the consumers which ultimately brings large revenue to the company. The new product expansion also has the target to break the record of financial benefits and customer loyalty. It’s not a piece of cake in this highly competitive world but Microsoft has strong hierarchies for product or service expansion. The company is trying to provide the new product for the businesses which is Cloud ERP.

b. Company’s Vision and Mission Statements

The company mission is “We believe in what people make possible, our mission is to empower every person and every organization on the planet to achieve more”. The company mission statement is well defined and proved by its current and previous work domains. The mission clearly depicts the corporation customer value, their significance, and organizational achievements.

Microsoft vision statement is “to help individuals and businesses realize their full potential”. I believe that Microsoft vision statement is based on the company software products and computer technology products value. The vision statement depicts its target market that what their products do and what their customers get from their products.

c. Company’s location and facilities

The company is American based and it is headquartered in Redmond, Washington. They informally knew as corporates Redmond campus. The Microsoft works with perfect facilities and bets equipment to solve the small and large highly severe technical issues. their work is highly comfy and it is not updated with the high-level technology always it is equally relaxing with ample opportunity for learning, fun a work, stay mentally and physically fit. To keep their people healthy, a fit and an active lot of causal facilities are provided for them by which they can take rest of can to enjoy the work in the less rigid environment.

d. Company’s management structure

Microsoft is operating on a large scale, it is providing multi-purpose products from recent past years with sustainable efficiency and innovation (Herrera, 2016). The reason behind this sustainability and effective deployment is its high-level management (Aghion & Jaravel, 2015). Microsoft has well design management under effective leadership styles. The company is focusing on employee motivation, satisfaction, happiness, health and basic needs to ensure that management is very strong there (Sniukas, Lee, & Morasky, 2016). Gates was the best source of motivation for all employees, he marinated the high level of management which is beyond explanation. He believed in communication and problem-solving approach rather than showing rigidity towards employees.

Then Gates resigned in 2000 but remained the board of directors. The major driving force in company management is Satya Nadella who designed the best environment based on promotional techniques and communications. The company is leading because of management strength and these strengths are always turned beneficial in case of new business venture or any product expansion. As there is a plan to expand the company’s product it would bring positive results because of high management skills and strong motivational nature of leaders and higher executives. The plan to expand the product will be good because of top to down hierarchal management.

e. Company’s product/service mix

Microsoft corporations are the global commuter technology manufacturer, its products are very vast and expanded. The company is manufactured may products such as Exchange server, Skype for business, SQL server, SharePoint server, Microsoft office suite, Dynamics ERP and the services are Live connected, Windows Live and MSN. Microsoft is a leading developer of personal-computer software systems and all its apps. The company sells electronic games and input-output devices, portable media players. The company is providing their own line hybrid tablet.

3. Business goals and objectives

a. Three business goals/objectives w.r.t company expansion launch

Three business goals and objective are following

The company is planning to get the competitive advantage in the entire world. The company is leading but in this world, the competitive threat is the basic factor which is necessary to view or update according to this. The company wants to get the unbeatable competitive advantage by this expansion.

The second goal and objective of the company are to increase the customer loyalty and satisfaction. With the passage of time, the need of society and the environment is changing. People need highly compatible and innovative products. It’s becoming harder to satisfy the consumer. The company couldn’t believe on rest assured but there is need to do something very carefully to earn the loyalty of consumers and stimulate their buying patterns.

To expand or occupy the target market with the new innovative technological standard is the major goal or triggering force behind this product expansion (Pisano, 2015). Microsoft Corporation product expansion will be done on another third goal which is its capitalization. The company wants to earn more and more to be the strongest in US economy. The company is still the richest and financially well stable but in Gates mind, there is always the struggle to put the success standards higher than before. This product expansion is based on standardization, the standard matters a lot. The company wants to shift its growth and financial standards so high that no one could ever beat this standard.

These are some important goals and objectives which will stimulate this initiative. These initiatives will get promoted through these objectives. The Microsoft is highly stable company and it’s all sort of expansions or extensions are perfectly designed because of its clear description of measurable goals and objectives. The company always work and defined goals to meet all the deadlines and targets. The new initiative will also be launch on these paradigms. Overall objectives are in favor of this expansion.

b. Support expansion mission and vision statement

Mission statement

The mission statement behind this initiative is that “we are focused on business expansion to serve the reliable services and products in the global world to make our environment more competent and trustworthy”

Vision statement: vision statement of the Microsoft new product expansion is that” we are concerned with targeting a new market and building the sustainable environment”.

These two statements are highly beneficial in the context of new imitative. The company would work to achieve the goals and objectives behind this initiative. The new product/service launch is supportive to get the sustainable competition overall competitors like Samsung and Del. In the technology world, the expansion is necessary to get the lead in the market and that’s why Microsoft has also defined the best mission and vision statement for new product expansion. Every company survival requires a fresh and intelligent approach to promote the growth, flexibility, productivity, and collaboration.

For manufacturers, brands, consumer brands, retailers it is complex to keep the change and it is difficult to do with soloed point applications, outdated and monolithic applications. It is the dream of the company to help many more companies to get what they want through a highly intelligent cloud of business apps.

4. Market Analysis

a. Target market

Companies are looking for the cloud which could automate their businesses to higher scale. The companies searching for that sort of cloud which can easily process their business automated with the use of CRM and ERP. The basic need of the target market is to get the best technology to shift their production patterns to the upper level. The cloud will be able to that. With the proper implementation and use of the cloud, the business person could save their precious working hours and time with the higher productivity of employees. Microsoft evaluated the fact from external and internal resources that businesses are finding difficulty to scale the productivity. According to the APA (American Psychological Association) research, the time lost between switching from task to screen is almost 40% of the employee’s productivity. This lost cost almost $450B per year of the global economy.

The company is evaluated the overall solution with a core understanding of market needs and wants. Today the world is revolving around business. People are associated with their benefits and they want to get more and more with new technological advancements. The business person is worried about its employee’s productivity and financial loss. Microsoft is targeting that type of business persons who are stressed to scale their productivity. The company product expansion through cloud ERP will target the global world with new paradigms and domains of facilitating small and large businesses. This would also serve to the economy of regions.

The target market involved those employees who are worried due to the screen and task switches. They are searching for such type of ease in which they couldn’t switch their working windows for another task. The Microsoft is highly flexible to provide the products according to the need of society. The company targeted all class of business. The upper and the mediocre level can also apply this in their business processes. The automated system is targeting all those who want to increase employees productivity so, they should execute their unstructured and structures collaborative and production processes.

From large scale organizations to small-scale organizations, the company is designing the cloud for all (Scarborough, 2016). The target market for Microsoft is the large scale and small scale companies and organizations. The older way of designing or developing the applications for businesses is traditional and there will not go beneficial in future. But, the new approach such as cloud ERP is necessary to shift the business standards higher in the target market.

b. Industry in which the company operates

The company operates basically in the technology industry. Microsoft operates in computer hardware, computer software, consumer electronics and social networking services. The company also operated in cloud computing and video games internet industry. The Microsoft belongs to the corporate venture capital industry also. Microsoft is a Technology Company which is providing the large range of products and services in the global world with perfect quality and reliability standards of services and products. In the technology industry, the company is leading due to all its business ventures and expansions of products.

c. Competitive Analysis

Competition is the biggest need of era, people like to buy from the most competitive seller because of the perception that people like what they feel best (Bryson & Daniels, 2015). To be the best in the market, the competition is the basic things which are necessary to maintain (Baron, Essentials of entrepreneurship: Evidence and practice, 2014). As we now that, the world is evolving day by day. The world is replaced with the name as the global world. People have evolving demands and their natures need changes now (Baron & Hmieleski, 2018). The traditional and the older approaches are not best to get the attraction of people. Overall there is a need to launch something interesting to be leading in the market. The same case is with Microsoft, which is one of the most influential leaders in the market. They like to introduce such types of products which would ultimately bring a higher level of competition for them.

Microsoft has many more competitive corporations which are working along with it. The biggest competitor of the Microsoft is Apple Inc. Apple is one of the famous technology marketing leaders which are providing highly innovative and successful technology incorporated services and products. There is huge competition among the Microsoft and Apple. Apple is collecting large revenue every year because of its some strength. It also has some weaknesses by which the Microsoft can take the lead. In the previous record, they are working on comparatively same success goals. The company like Apple don’t need any competitor the same is for Microsoft.

Apple company strengths

Apple Company has a lot of strengths which are always creating an edge point for the company. The strengths reveal that how Apple Corporation is becoming a dominant player in the tech industry and trying to create the competitive advantage over all tech industry service providers. The first and foremost strength of the company is the unique ability to develop and design hardware, software, services, and applications. Apple always introducing its unique and innovative products which are always very easy to use. The user-friendly interfaces and the easy to use solutions are the basic strength driven approaches of the company.

The second strength of the company is that it is a powerful brand which is supported by marketing capabilities and strong advertising capabilities. Apple is the name of the brand which is valuable and recognizable in the global world. It is supported by a vast ecosystem and the brand recognition is the major factor by which the company built its reputation with the passage of time. Apple is perfectly built reputation of providing high quality, reliable products and also known as providing well-designed innovative products to its customers and the company also have the sound financial performance. The third strength factor is the most loyal customer base in all major product market where the Apple Company operates.

The company is providing all its products according to the need or customers. Apple always enjoys the highly loyal base of the customer in the absence of a loyalty program. They convey high-status product which itself works as a loyalty program. The customer always tries to buy Apple products even when they available in cheaper options in the market.

Apple Weaknesses:

The weakness of the Apple Corporation is its Veto power over its sold products. The company keeps control of designs inside and up-to standards but it also destroys the hardware wide adaption, it hurts the overall hardware adaption specifically in computers. The company has a very small market share. Another weakness of the company is its freaky control and the demanding nature. The CEO Steve jobs created the environment which is still rigid after his death. The company reputation is become down after the death of CEO Steve Jobs. The Apple Corporation is also not shareholder friendly. The company has a poor relationship with its shareholders despite having the growing and huge cash level.

As compared to Apple the Microsoft has also its strengths and weaknesses. Microsoft has brand loyalty and strong well-built brand reputation. Over the past years, the company is strengthening its brand loyalty through multiple ways and products or venture expansions. Microsoft has the effective way to build the easy to use products and services with strong distribution channels.

Another strength of the company is its robust distribution channels by which the consumers can get Microsoft products and service within short-time. The reliability and the quality of its product is the reason by which people always like to trust in it again and again. The major strength of the company is its acquisitions such as Skype. The company is becoming more powerful with this acquisition. The company has adaptive nature and strong financial performance by which it is getting a strong competitive advantage.

Weaknesses of Microsoft Company

The Microsoft Company has its weakness which is the dependence on hardware manufacturers. The company has another weakness which its security flaws criticism. The company faced the criticism over the flaws of security, the company is slow in terms of innovation. The company also made some poor acquisitions which turned as its weaknesses.

5. Market and Sales Strategy

a. Marketing mix

Marketing mix involves the 4P’s which are price, product, place, and promotion. For any new product expansion, these for marketing are highly important (Londhe, 2014). If these four elements are not well designed then definitely the product expansion would bring the negative results to the company (Huang & Sarigöllü, 2014).

Price

For Microsoft Cloud ERP expansion in products, the pricing matter a lot. The company has its mission to facilitate all type of its customers, then the pricing strategy needed for all type of businesses either large or small (Karadag, 2015). The company for this product has decided to set the lower pricing strategy or moderate pricing strategy. In this, the affordable cloud services will be applied to the buyer of the product. The companies who want to get that product majorly could bear its financial cost (Scholes, 2015). For the company the pricing matters a lot, it is the way to earn the customer loyalty or introduce the product in higher and lower markets to get the strong feedback and triggering the purchase of the product (Buckley, Burton, & Mirza, 2016).

Place

For Microsoft Cloud ERP the place is not harder to decide. In the entire world, the business is facing the same type of issues which are happening in the US also. But initially, the Microsoft Company will launch its product in the US. The US population including large and small-scale business owners could easily get that facility and they could save their money and also can provide 40% extra than ever recorded employee productivity

Product

The Cloud ERP is the product which is planned to launch in the US to facilitate the businesses.

Promotion

Promotion is the basic requirement to advertise the new product on the market (Nikabadi, Safui, & Agheshlouei, 2015). It is the way to attract the consumers (Fine, 2017). The company has decided to launch the product through advertisement campaigns. In the yearly exhibition, the company will introduce its product and also the company will use social media to advertise this cloud service in a global world where everyone has the same issue.

b. Sales strategy

Microsoft is not fats in terms of innovation. But in this case, the company is working to provide the best business expansions (Hasan, 2016). The company will use the needs-satisfaction selling strategy (Terho, Eggert, Haas, & Ulaga, 2015). The need selling strategy is the great approach of selling for the company because the company focused on the needs and wants of its customers. The sales strategy goal is to break all the records of Microsoft products sales to achieve the sustainable higher rank in the tech market with sustainability.

c. Sales forecast

It is common that every company before any product expansion or any product venture did some sort of sales forecasting to evaluate the acceptance of the newly launched product or ready to launch a new product. Microsoft is designing Cloud ERP, on the behalf of company reputation, long wait innovation and sustainable and stable financial position of the company. The new product sales can be forecasted under these factors (Ingram, LaForge, Williams, & Schwepker Jr, 2015). The Microsoft can collect the higher sales, especially from large-scale business owners. The market conditions are very stable. Politically, culturally, economically, legally and form all that perspective the US market is stable and the product will get its higher sales because of stable regional conditions. The company will collect its return on investment in a first half year.

6. Implementation Strategy

a. Overall Strategy

For the new product expansion, the effective strategy is defined. The Microsoft will clearly define the target buyer and the target market. The company first starts with the analysis of market needs and wants. Then the price, place, and promotions could be decided to implement the product expansion. The company started form research and analysis then decided its expansion mission, vision statement with all measurable and non-measurable goals. Overall after the goals definition, the company decided to ensure that the product is not highly expansive. The Microsoft major focus is on people not on any other thing. Designing a strategy also involves the interview with random people to do some research.

b. Implementation

The company has decided to fulfill all its product expansion task in given timeline or deadline. The company is always best to deploy the product in the estimated time. The company has its first target to design the powerful product expansion strategy before its launch.

· The company will provide its product expansion strategy for 15days.

· The company has the plan to target market in the first three years of product expansion.

· The company will target the market segment through a social media advertising campaign within three months of launch.

· The company has a target to achieve customer attraction and loyalty within six months.

· The company planned the return on investment in the first six months of product expansion.

c. Control Plan

A control plan is necessary for the successful business. The control plan is the way to evaluate the company success by achieving multiple milestones. The control plan is based on the constant evaluation of each business subsidiaries. The control plan is the based on the company monthly and yearly basis financial analysis. The company will analyze the effectiveness of each process through its outcomes. The evaluation for each activity deadline and project timeframes will be done along with their completions to ensure that all the hierarchies are properly working on it.

d. Risk Management

Risk management is also the vital part to do while doing any product expansion. In Microsoft, the company is designing the new ways to target the new market with the highly innovative approach. The biggest risk the company faced was the selection of an appropriate product to launch. The company could face the loss of investment and the customer loyalty due to the unsuccessful perfect deployment of cloud ERP (Goetsch & Davis, 2014).

The second risk the company could face is the loss of brand reputation. Every new product expansion could create the positive impact on company reputation or also could impact I negative terms. It’s all based on the way of selecting a strategy and impel meting control plan. Microsoft can overcome these risk factors with proper implementation of strategy and control plan for product expansion. The company will analyze the strength of the market and the demand of the market to reduce the risk factors in this expansion.

e. Key performance

Microsoft product expansion business success of failures indicators will be Marketing metrics and PIs and the Sales Metrics and KPIs. These two indicators are highly successful to implement to judge the success and failure of any expansion in business. These indicators can digitally track the market and sales to reach the target month over months.

7. Organizational Structure

a. Management Team

Each product expansion needed the perfect team to manage all its associated tasks. The company management team is necessary to design because it can ensure the positive and beneficial outcomes for the company (Bolman & Deal, 2017). The management team for the Cloud ERP launch will consist of 20 people (Kerzner & Kerzner, 2017). The project manager and the team manager will be hired to complete this project with all its perfection levels.

b. Employees needed

Overall the company has the strong staffing infrastructure, the company effectively managing its large range of employees with proper satisfactory dealings. The Microsoft company has believed to hire the expert in every launch of the product to make it best ever. For the cloud ERP, the team will be designed and the 20 staff members will be hired. The employees will be a developer, software designers and the experts in cloud computing. The computer science experts with high-level skills and abilities will be hired to manufacture this product.

c. Job descriptions

Microsoft will plan the team and the staff recruiting according to the need of product expansion. The members decided to recruit are 20th. First, the company needs the experts in cloud computing and the computer science postgraduates with the expertise of more than ten years working in the recognized firm.

The company will recruit fifteen project developers and manufacturers. Two people will be recruit as management who will perform the team management and the project management. The company will hire the advertisement or promotional manager to introduce the new product in the market. The timeline manager and the budget manager will also be designed to deploy the well-designed product.

8. Financial Statements and Projections

The company Microsoft has undertaken expansion in its product range as its growth strategy. The new product introduced is Cloud ERP. The projected financial statements for the first year of the Cloud ERP launched is shown below.

a) Capital/Investment Needs:

Estimates of capital and investment needs of the company is about $176,165.This is

Will require about 60% of the capitalization of debt and the remaining 40% will be capitalized by the equity. The company was able to raise equity finance by issuing new shares in the market for investment. Due to high growth prospects attached to the Microsoft after launching the Cloud ERP, the company was able to easily attract new investors. The Microsoft is extending its brand by introducing a new product under the same brand name. The long-term debt is of high portion due to tax advantages on the debt payments.

The other start-up cost will require high research and development cost of $ 6,988 million. The cost is estimated on the technological feasibility. All software cost are capitalized until the product is available for general release to the customer. The feasibility is reached after resolving coding and testing issues.

b) Forecasted Income Statement for 12-months ( Year Ended June 30, 2019 )using the month-by-month approach

Assumptions: The revenue of the Cloud ERP is estimated to be increasing 10% every month, due to high growth potential.

The cost of the Cloud ERP is estimated to increase by 2% every month.

The Research and development cost is estimated to be 85% of the previous month cost, due to high research cost in the first month followed by development cost each month.

The sales and marketing cost for the coming month is 95% of the previous month.

The administration cost is increasing by 10%, as more employees are needed, as production is increased and sales are increased.

The interest cost is 6% of the long-term loan.

The income tax cost is 30% of the profit before interest and tax.

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

a) Forecasted Balance sheet for 12-months using the month-by-month approach

Assumptions: The company assets such as cash, account receivable, inventory is either showing the trend of increasing, decreasing or remaining constant by 20%.

The goodwill is also increasing with the same trend.

The intangible assets are growing as the level of spending is increasing on research and development.

The account payable is also following the same trend as current assets.

The long-term and current portion of liability are divided into months.

The equity is increasing as soon as capital is paid up.

The retained earnings are increasing with profit reserved for the coming year.

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

(All values are in Million)

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9. Recommendation and Justification

As far as my recommendation is concerned, I believe that the company should focus on its innovative promotional techniques to get the highly competitive edge over the technology market. The company needs to focus on building strong innovation techniques to get the sustainable financial revenue in the future.

10. Conclusion

Microsoft is a US based corporation which is leading in the global market because of its strong reputation and sustainable growth. The company is well-recognized because of its ventures and the continuous introduction of new products. It could be easy to say that the company has the advantage to expand its products and build the strong customer and brand loyalty. The company has the best strategy to expand the new product.

Currently, the company planned to introduce the new product or trying to expand the product in a business market where the business persons are seeing the high technological advanced cloud to shift their working standards higher. They also want to scale their productivity which is being considered impossible for them. This is the expansion by which the small and large business organizations would equally get the benefits in terms of increase in employee productivity. Cloud ERP is the product which is manufacturing to launch in American technology market and the company is estimating higher customer attraction towards it. This is based on the needs and wants of the current environment.

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