The facts about Microsoft´s cooperate structure may be found at Microsoft (2020). Microsoft cooperation is a multibillion-dollar software and hardware organization.
We believe Microsoft diversification is related-linked. Though Microsoft revenue is mostly generated by Microsoft office, server products, and windows OS (productivity and business processes), Microsoft has diversified to other businesses, including video gaming and phone business. None of Microsoft´s business activities, however, generates over 70% of its revenues. In an aim to compete in other markets, Microsoft used a related-linked diversification to extend to the hardware and game components of the computer industry. For it to qualify as linked-related diversification, the company´s new businesses must be considerably different from the main business. The company then creates resources for new businesses (Sekerli & Akçetin, 2018). This related-linked approach thereby aims to offer Microsoft a robust industrial presence by entering in different business ventures in electronics-related domains.
In the Microsoft diversification model, cloud and computing are the dominant business domains (Visnji, Smith, & Rogerson, 2019). According to Microsoft (2019), the productivity and business processes business returned revenue streams of $41.2 billion, placing it second after the more personal computing business, which returned $45.7 billion in revenue (Reiff, 2020). The intelligent cloud business was, however, observed to be the fastest rising business domain. The diversification by Microsoft is both unique and highly effective (Reiff, 2020). While the purpose of the diversification is to penetrate newer markets and maintain a competitive advantage, it is an encouraging sight to note that the diverse business domains Microsoft is venturing in are performing as good as the dominant businesses. Intelligent cloud´s fast rise as a revenue earner provides exciting opportunities for Microsoft´s research and development.
Microsoft. (2019). Microsoft Annual Report 2019. https://www.microsoft.com/investor/reports/ar19/index.html.
Microsoft. (2020). Facts About Microsoft. https://news.microsoft.com/facts-about-microsoft/.
Reiff, N. (2020, March 5). How Microsoft Makes Money: Cloud Services Are Growing Fast. https://www.investopedia.com/how-microsoft-makes-money-4798809.
Visnji, M., Smith, Z., & Rogerson, D. (2019, April 24). How Microsoft Makes Money? Understanding Microsoft Business Model. https://revenuesandprofits.com/how-microsoft-makes-money-understanding-microsoft-business-model/.
Sekerli, E. B., & Akçetin, E. (2018). Internet Sektöründe Satin Alma Çesitlendirme Stratejisi: Google Inc. Örnegi. Afyon Kocatepe Üniversitesi Sosyal Bilimler Dergisi, 271–289. https://doi.org/10.32709/akusosbil.407405
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