management STRATEGY & COMPETITIVE ADVANTAGE

by, William Knowles, Indra Senihardja, Andrew Suen, Luke Aiston, Mengjia Zheng

Microsoft Corporation has been a powerhouse in the technology industry since it’s founding in the spring of 1975. At the dawn of a new technological age, Microsoft arose as one of the first and most dominant champions, and as such, was the first corporation to bring the power of computing into the common household. There was once a time where the word “computer” was accompanied solely by the word “Microsoft.” That time seems like a distant memory now. Today, computing has evolved from something that was once limited to something that is arguably limitless. Although Microsoft continues to outperform others, they lack the dominance they were once known for. In order to regain their spot atop the pedestal, Microsoft must understand the evolution of two things; themselves and computing. Understanding who they once were and what computing once was will allow them to strategically plan where they and computing must go. They must focus on that which made them who they are today, software, and once again become proactive rather than reactive within their market. Comment by William Knowles: Intro

In order for a corporation to be successful, it must have its own identity. Without an understanding of who you once were and who you currently are, you will never be able to end up where you want to be. Since its founding in 1975 up until the year 2000, Microsoft was the most dominant player in both computer software and operating systems. At the height of their dominance one could argue they were the face of technology. Serving as the pioneer and face of the computing world, Microsoft was an integral force responsible for leading society into a new age of technological advancement that had never been seen before. But what exactly is meant by the term “computing”? During the aforementioned time period, “computing” was strictly limited to computers, at a very basic level. Whether for work or personal use, computers were growing more and more popular, but strictly within the desktop domain. Throughout the 2000’s and into modern day, the domain of computing has expanded dramatically. With the addition of laptops, mobile devices, cloud computing, and other computer services, computing has become much more than it was back in 1975. It is a much broader term than it once was. During a time of rapid growth in computing, Microsoft should have been leading the charge of innovation within computer software, but they did just the opposite of that. Microsoft wanted to remain the face of computing, and thus it stayed involved with everything. It began creating hardware and accompanying software that included tablets, mobile phones, and video game consoles. Microsoft wanted to continue to dominate the entire computing world, and that just is not possible. Computing has grown enormously to the point where one specific company cannot dominate and innovate in everything. A firm that specializes within a specific area of computing will have the best chance at innovating and competing in a specific area. Microsoft was first and foremost a company that created operating systems and software, and that is where they need to focus and innovate in. Comment by William Knowles: here i discussed the identity of Microsoft. Who they were, are, and want to be

Current CEO of Microsoft, Satya Nadella, has made his focus very clear, which is domination in market share. In 2000, Microsoft’s market share was at 97%. Today it is at 20% ( http://www.forbes.com/sites/timworstall/2012/12/13/microsofts-market-share-drops-from-97-to-20-in-just-over-a-decade/ ). This dramatic drop is market share over the last fourteen years is not nearly as bad it seems. Back in 2000, mobile phones were not included in this metric. Mobile phones have become a huge part of technology, adding an entirely new dimension to computing. Since the contents that make up Microsoft's market share have changed, it is an inaccurate way of analyzing the company’s status. A better way would be to look to examine each individual component of computing that Microsoft competes in. Looking at a market share metric that only includes desktop operating systems, Microsoft dominates that market share at 92%. If you were to include mobile phones into that metric, that number drops to 38% ( http://www.businessinsider.com/chart-of-the-day-the-competition-for-windows-10-2014-10 ). This specific example shows that Microsoft is still extremely successful in desktop operating systems, but not so much in mobile phones. A look at Mircrosoft’s most recent revenue report will illustrate that 70% of the firms profits come from operating systems, software, and software services ( http://www.zdnet.com/apple-google-microsoft-where-does-the-money-come-from-7000026043/ ). Satya Nadella was partially correct when he stated that market share was the focus of Microsoft. He just needs to be more specific, and focus in on a specific niche within computing. By focusing on market share as a whole, Nadella has stretched the company’s resources too thinly, making both innovation and market share success within Microsoft scarce. If the focus were shifted in on operating systems and software, Microsoft will have the resources and opportunity to innovate again. This will allow them to be proactive and not reactive, and allow them to dominate in specific areas of the computing market share, like they once did. Comment by William Knowles: Here I discussed the Dilemma Microsoft faces, which is Market Share vs innovation

In order to get the market share results Microsoft desires, innovation within the appropriate realm of computing is required. In order for Microsoft to successfully innovate within the appropriate realm of computing, there must be an understanding of the structure of the organization in the past, present and future. All organizational structures fall under one (or a balance of) the following: cooperation, control, and autonomy. By understanding where Microsoft falls within this organizational structure balance, a strategy for obtaining results can be better implemented. Comment by William Knowles: here i begin talking about the organization

Up until 2000 computing, and Microsoft were much more simplistic. There were computers, operating systems, software, and Bill Gates. Bill Gates, founder of Microsoft, was the active CEO of the company up until 2000. The way Microsoft was back in 2000, the organizational structure was very heavily control based. Gates ran the show, making all of the decisions for the company. At this time, Microsoft’s organizational structure could only be described as control. Today, Microsoft’s great innovator and CEO has stopped down. They have also stretched their resources thin, attempting to compete in such a wide range of computing markets. A combination of these two factors has led Microsoft from the control organization they once were, to a cooperation based organization, with many different departments working together. Comment by William Knowles: more about organization. microsoft past and present

(Triangular thinking and organizational pattern)

Microsoft Organization Strategy

In the past, Microsoft corporation was the pioneer in computing when the computer was introduced to the world., Just over a decade ago, they dominated a computing market that was still primarily comprised of desktop operating systems and software. they were dominated the operating system market for over decade ago. Microsoft organization strategy was more in control rather than autonomy or cooperation. It shown by Microsoft had been fairly consistent in developing and developing their products for over a decade ago. Microsoft was more focusing in producing software to operate computer. Their greatest invention are Windows operating system, Microsoft office, and Internet exploer web browser. In the early age, Microsoft’s vision was to help people creating their own personal computer. Microsoft Windows came to dominate the world’s personal computer market with over 90% market share.

The company had realized that to be the best serve in technology market, they must rethink the their corporate strategy. Today, Microsoft’s strategy is more focusing on productivity and our desire to help people “do more. Their strategy was shifted toward interaction than control. Since late 2000, Microsoft has increasingly diversified their product from operating market system market and has made a number of corporate acquitions. In May 2011, Microsoft acquired Skype Technologies for $8.5 billions as the largest acqusition ever for Microsoft. The company also produces a wide range of other software for deskstops and servers, and is actice in areas including internet search with Bing, the video game industry with Xbox, the digital services market through MSN, and mobile phone via Windows Phone OS. Moreover, in june 2012, Microsoft entered the personal computer production market for the first time, with the launchof the Microsoft Surface, a line of tablet computers.

” As the Microsoft Devices Group, our role is to light up this strategy for people. We are the team creating the hardware that showcases the finest of Microsoft’s digital work and digital life experiences, and we will be the confluence of the best of Microsoft’s applications, operating systems and cloud services. The current CEO, Steve Ballmer, joined Microsoft in 1980 and took over from Bill Gates as CEOin 2000. In 2001 Microsoft entered the gaming console market with the release of Xbox.

Windows continued to be the most common OS in the 2000’s in spite of the fact that Windows

Vista released in 2007 was considered a flop by most technology enthusiasts. In the late 2000s

Microsoft’s mai

n competitor Apple took the lead in the smartphone and tablet market gaininghuge market share for its iPhone and iPad. The delay by Microsoft in entering this market wouldend up costing them market share in later years. Windows Phone was released in 2010 butfailed to compete effectively with Apple, Google and Android operating systems.In September 2013 Microsoft announced it was purchasing the devices division of Nokia. Thiswas a bold but necessary move by Microsoft in attempting to achieve success in thesmartphone and tablet industry. This highly competitive market is still dominated by Android andiOS devices and it is clear Microsoft will have a lot of work to do to catch up.

In future, we believe that Microsoft organization strategic should be in the level between control and cooperation. Mr. Nadella said Microsoft needed to "rediscover our soul," and he pointedly defined Microsoft's mission not as delivering long-standing software products such as Windows or Office, but broadly as developing technology to help people live better lives and businesses run more efficiently.

Microsoft Organizational Pattern

How we should compete: Economy and Interaction

How we should grow: Making

How we should we organize: Centralization

some sources

1) http://www.businessinsider.com/chart-of-the-day-the-competition-for-windows-10-2014-10 Today, Mircrosoft dominated desktop operating systems with 92% of market. If you include mobile devices as well, that number drops to 38%. This means that microsoft soft is getting killed in the mobile phone market, something they only recently added.

2) http://www.forbes.com/sites/timworstall/2012/12/13/microsofts-market-share-drops-from-97-to-20-in-just-over-a-decade/ Market share drop from 97% in 2000 to 20% today. The problem with using market share on track microsoft's success is that it is the the contents of what make up the term have changed. Back in 2000, mobile devices were not included in this metric. The addition of them did not do any favors to Microsoft

3) http://online.wsj.com/articles/microsoft-ceo-nadella-hints-at-organizational-changes-1405003356

4)