Colorado State University Ethical Implications of Microsoft Situation Discussion
Discussion post(only needs to be a few sentences and does not need on the same document as the case study)
Companies need to understand their ability to compete and the environment in which they must compete. Of the strategy planning tools they have available, the PEST (political, economic, sociocultural, and technology) analysis has been shown to be very effective. Do you believe that companies who have a planning culture and use planning tools, such as the PEST analysis, can perform better in the long run than their industry competitors who may not use similar planning tools? Why, or why not?
Essay required below
Microsoft Case Study
Case studies are an essential learning strategy in business classes as they provide an opportunity for you to critically analyze events that have taken place in real-life businesses. This develops your critical thinking and research skills as you research the competition and industry in which your business resides in order to formulate a recommendation for the challenges faced by the company.
For this unit, review the “Marketing Excellence: Microsoft” case study on pp. 94–95 of your textbook. This assignment will be comprised of two parts; one part will ask you to respond to questions, and the other will require you to complete a case analysis.
Evaluate this case and respond to each of the following questions using both theory and practical managerial thinking.
- Evaluate Microsoft’s product and marketing evolution over the years. What has the company done well, and where did it falter?
- Evaluate Microsoft’s recent expansion into areas such as search engines and smartphones. Do you think these are good areas of growth for Microsoft? Why, or why not?
- Review the potential ethical implications of Microsoft’s situation. How might they revise their strategies to align with good ethical practices?
Your Part 1 response must be at least two pages in length. Follow APA Style when creating citations and references for this assignment. Note that you will submit Part 1 and Part 2 in one document.
Complete a case analysis of Microsoft. This requires that you conduct research on Microsoft beyond the case study material in the textbook. In the case analysis, you will look at the situational analysis, problem, and alternatives, and you will provide a recommendation. Refer to the instructions below as you construct your analysis.
- Situational Analysis
- Discuss the external environment through the compilation of a PEST (political, economic, sociocultural, and technology) analysis.
- Discuss the internal and external environment through the compilation of a SWOT (strengths, weaknesses, opportunities, and threats) analysis.
- Identify at least one organizational problem that Microsoft is currently having or one that you project it will have in the future. Base this on your research and critical thinking.
- Compile three or four potential marketing-related solutions to the problem above. Remember that these are potential alternatives; you will not select all of the alternatives to solve the problem.
- Recommendation (Marketing Strategy)
- Select one or two of the alternatives above to solve the problem that you identified in this case analysis.
- Discuss your rationale for choosing these and not the others. Include supporting research that will increase the depth of your analysis.
In order to successfully complete Part 2 of this case study, you need to review the video and task learning guides (TLGs) below. The following resources will provide you with the skills to research industries/competitors.
Company and Industry Research video (transcript for Company and Industry Research video)
How to Find Company Information in the Business Source Ultimate Database TLG
How to Search for Articles With a Company Focus TLG
Microsoft is the world’s most successful software company. Bill Gates and Paul Allen founded it in 1975 with the original mission of having “a computer on every desk and in every home, running Microsoft software.” Today, Microsoft is the fifth most valuable company in the world and has a brand value of $61.2 billion.
In the early 1980s, Microsoft developed the DOS operating system for IBM computers. The company leveraged this initial success to sell software to other manufacturers, quickly becoming a major player in the industry. Initial advertising efforts communicated the company’s range of products, from DOS to Excel and Windows, and unified them under the Microsoft brand.
Microsoft went public in 1986 and grew tremendously over the next decade as the Windows operating system and Microsoft Office took off. In 1990, Microsoft launched Windows 3.0, a completely revamped version of its operating system, including applications like File Manager and Program Manager that are still used today. It was an instant success; Microsoft sold more than 10 million copies of the software within two years, a phenomenal accomplishment in those days. In addition, Windows 3.0 became the first operating system to be preinstalled on certain PCs, marking another major milestone for the industry and for Microsoft.
Throughout the 1990s, Microsoft’s communication efforts convinced businesses not only that its software was the best choice but also that it should be upgraded frequently. Microsoft spent millions in magazine advertising and received endorsements from the top computer magazines in the industry, making Microsoft Windows and Office the must-have software of its time. The 1998 slogan “Where Do You Want to Go Today?” promoted not individual Microsoft products like Windows 98 but rather the company itself, communicating that Microsoft could help empower companies and consumers alike.
During the mid-1990s, Microsoft entered the notorious “browser wars” as companies struggled to find their place during the Internet boom. Realizing what a good product Netscape had in its 1995 Navigator browser, Microsoft launched its own, Internet Explorer later the same year. By 1997, Explorer had grabbed 18 percent of the market.
Over the next five years, Microsoft took three major steps to overtake Netscape. First, it bundled Internet Explorer with its Office product, which included Excel, Word, and PowerPoint. This meant that consumers who wanted MS Office automatically became Internet Explorer users as well. Second, Microsoft partnered with AOL, which opened the doors to 5 million new consumers almost overnight. Third, Microsoft used its deep pockets to ensure that Internet Explorer was available free, essentially “cutting off Netscape’s air supply.” By 2002, Netscape’s market share had fallen to a meek 4 percent.
Microsoft’s fight to become the browser leader was not without controversy; some perceived that the company was monopolizing the industry. As a result, Microsoft faced antitrust charges in 1998 and numerous lawsuits based on its marketing tactics. Charges aside, the company’s stock took off, peaking in 1999 at $60 per share. Microsoft continued to release new products, including Windows 2000 in 2000 and Windows XP in 2001. It also launched Xbox in 2001, marking its entrance into the multibillion-dollar gaming industry.
Over the next several years, Microsoft’s stock price tumbled by more than $40 a share as consumers waited for the next operating system to be released. During this time, Apple made a strong comeback with consumer-friendly products like Mac computers, iPods, iPhones, and iTunes. Apple also launched a successful marketing campaign titled “Get a Mac” that featured a smart, creative, easygoing Mac character alongside a geeky, virus-prone, uptight PC character. Apple’s campaign successfully converted many consumers and tarnished Microsoft’s brand image.
In 2007, Microsoft launched the Vista operating system to great expectations; however, it was plagued by bugs and problems and the company’s stock and image continued to slide, helped by the worldwide recession of 2008–2009. In response, Microsoft created a campaign titled “Windows. Life Without Walls” to help turn its image around. Its new message—that computers with Microsoft software were more cost-effective than the competition—resonated well in the recession. Microsoft also launched a series of commercials that boasted, “I’m a PC” and featured a wide variety of individuals who prided themselves on being PC owners, hoping to improve employee morale and customer loyalty.
In 2009, Microsoft launched Windows 7, an improved operating system, with the campaign “Windows 7 was my idea.” Four years later, it was operating more than 30 stores like Apple’s across the United States and Canada. Jonathan Adashek, general manager of Communications Strategy, explained, “We’ve welcomed more than 15 million customers and counting so far, and have learned a lot from them. Having this direct connection to our customers has really helped us better understand their tech needs.” Travis Walter, general manager of Microsoft’s International and New Store Formats, agreed, “In person, you get a very different experience and it’s one we’ve been very delighted to provide. When you see our technology in person—when you can touch and feel it—a light goes off.”
After the recession came to an end, Microsoft’s image and stock started to recover, thanks to the success of its retail stores, effective marketing, and a wide range of new product launches. Microsoft went after Google’s dominant position in the search marketplace, for instance, with a search engine called Bing, and it entered the growing mobile industry with its Windows Phone mobile operating system. The company’s 2011 expansion into smart phones surprised many analysts, but Microsoft hoped the smart phone and Windows Phone mobile OS would forge a strong connection with its consumers around the world. It continued its innovation momentum in 2012 with the launch of Windows 8, Windows 8 Phone, and a computer called Surface Tablet. The tablet impressed consumers with a detachable keyboard that also served as its protective cover.
Today, Microsoft offers a wide range of software, mobile, and home entertainment products. Its most profitable products continue to be Microsoft Windows and Microsoft Office, which bring in approximately 80 percent of its $86 billion in annual revenue.