For a long time, Microsoft had tried to establish a consumer-centered advertising platform. Despite Microsoft's management working very hard to create a consumer-centered advertising platform on Bing, It did not achieve the desired success. Microsoft also tried to look for the advertising center on Facebook, but that would require that it buys one of the 2nd tier social media plays and try to compete directly. This too would not work. LinkedIn proved to be the better alternative for what Microsoft was looking for. LinkedIn provides a better advertising platform which is mainly consumer-centered and most importantly, it is also work oriented. This was an added advantage for the acquisition and fits neatly with the Microsoft brand and its enormous strength in B2B software and services. LinkedIn has a lot of quite precious information as an advertising platform which explains why Microsoft settled for it. Considering the fact that Microsoft has some brilliant staff in predictive analytics and machine learning, the company stated that there is a lot they will do to make LinkedIn more appealing and relevant to the general public as well as its users and ad buyers, a step which could oversee a lot of expansion and improvising of LinkedIn.
This acquisition was one of the wisest major business decision made by a Multinational company in the last few years. This is because the acquisition will fulfill the dream by Microsoft to conquer the Enterprise Network. Apart from Windows, which is Microsoft's major product, the latter has plans to capture the enterprise market. Acquiring LinkedIn, therefore, will greatly help Microsoft to attain its freak on the Enterprise Network. The other reason why the acquisition was a wise decision is because Microsoft needs to acquire insights of their customer's reaction towards Microsoft products. This is because Unlike Facebook and Google, Microsoft does not have a network chain that can help them to evaluate feedback from their customers. This was one of the loops that the acquisition of LinkedIn is trying to seal. Microsoft hopes that LinkedIn will be a major platform for it to learn more from its consumers.
The other major reason as to why the acquisition of LinkedIn by Microsoft was a wise decision is because it will be of great help in pulling out competitors from the crowd (Jagadish, 2014). This means that because now the enterprise market will be under the sole control of Microsoft, aspiring entrants into the enterprise market will be a target by Microsoft as they will be aware of it. Deductively, this acquisition by Microsoft is a well-calculated move and if it succeeds, it will be a great step towards acquiring a monopoly of the internet by Microsoft.
Forces of Competition and how they Impact on Microsoft
Microsoft Company experiences external factors of competition mostly from firms that are in the Hardware and Software production industry (Sekaran, 2016). For Microsoft to successfully remain rooted in its position, there is a need to address these factors of competition strategically. These factors include:
Competitive Rivalry; This aspect of competition means that for Microsoft to remain successful, it will have to keep on moderating costs for their products to make them more affordable to their consumers, maintain high aggressiveness towards competitor firms as well as device strategies to deal with a high diversity of firms in the Internet Industry.
Bargaining Power of Microsoft's Customers; Microsoft will need to continue upholding customer satisfaction which is one of the factors that will determine its performance. To respond to the issue of bargaining power by its customers, Microsoft needs to introduce low substitute products, keep on switching costs for their products especially the hardware products and also keep on providing information which will empower their customers with enough information to help them differentiate between Microsoft's products and those of other manufacturers.
Bargaining Power of Microsoft's Suppliers; just like any other business, Microsoft business depends on suppliers and the conditions of their business. This factor means that Microsoft will have to moderate the size of their suppliers to create a significant but limited force of suppliers.
The threat of New entrants into the Hardware and Software market
In this aspect, Microsoft will need to deal with the threat of new entrants into the market because the Hardware and software market is an open one. New entrants into the market could cause high cost of brand development for Microsoft and also increase the cost of doing business which would mean reduced profits for Microsoft.
Microsoft Corporation's International business-level and Corporate-level Strategies
Microsoft Corporation's International business-level strategy
A business-level strategy is a model that enables a business to provide perfect and proactive services to the customers in a bid to make better profits or financial returns. These strategies focus on maximizing profits for the firm in question. Microsoft Corporation applies several International business-level strategies such as; Cost Leadership, focused low cost, and the integrated low-cost strategy.
In cost leadership, which means offering best price possible for products, Microsoft Corporation offers some of the best prices for both hardware and software worldwide. Products made by Microsoft are affordable to most Internet users anywhere on the globe. In middle and low-income countries, Microsoft products sell at considerable and well affordable prices. This helps to keep Microsoft products in the market due to their affordability.
On focused low cost, Microsoft applies a strategy similar to the one in cost leadership as they try to outdo their competitor's market prices. The difference is that here, marketing efforts are more specified to win governments contracts for supplying hardware equipment as well as software. To achieve such fetes, Microsoft offers their products at fairer prices.
About Low cost, Microsoft uses a business-level strategy that is flexible in price and value. Here, Microsoft offers high-quality products to its customers to give them the best value for their money, at an affordable price.
Microsoft Corporation's International corporate-level strategy
An International corporate-level strategy refers to all the strategic decisions that are made by an International Corporation and are likely to affect the whole organization or company and its operations. Most corporations apply only one corporate-level strategy at a time. However, Microsoft Corporation employs several corporate-level strategies in its overseas operations such as the growth strategy, the diversification strategy, and the stability strategy.
In applying the growth strategy, Microsoft looks for methods that can help it to get more revenue from the sale of its products. Here, Microsoft employs both horizontal and vertical growth strategies whereby it aims at maximizing growth by stamping its authority as a monopoly.
In the Diversification Strategy, Microsoft has developed elaborate marketing strategies for its products in line with this strategy. Microsoft products are readily available in many parts of the world. A customer needs to only purchase and use.
The stability strategy is also one of the strategies employed by Microsoft Corporation as an international corporate-level strategy in its operations. Using this strategy, Microsoft has neared optimal market share goals in many parts of the world. Methods applied in this strategy include automation of services, reducing costs whenever possible and negotiating better prices for contracts entered with governments and organizations.
For a Corporation that does not operate internationally
The corporation should apply the cost leadership business-level strategy. This entails offering their products at a consumer-friendly price, a factor which would significantly boost the corporation's sales and therefore enable it to expand to a multinational by opening branches in other countries.
It would also be recommendable that the corporation applies the growth strategy as a corporate-level strategy. This would help the corporation to realize more revenue from the sales of its products, which would translate to an ability to expand beyond the borders of its country of origin.
Corporate Governance Mechanisms Used by Microsoft Corporation
Corporate governance is the policies or the framework of policies implemented by accompany to protect and control the interests of both external and internal stakeholders of that business. Microsoft Corporation applies three corporate governance mechanisms, namely; The Board of Directors, Audits and the Balance of Power.
The Board of Directors' main function at Microsoft is to protect the Interests of the Corporation's stakeholders. Shareholders of the corporation use the board to reach out to company owners, managers, and directors. The board of Directors is also mandated with the role of reviewing Microsoft's management (Wheelen, 2017).
Microsoft Corporation applies audits severally in a financial year. This ensures that the corporation follows the appropriate accounting standards and regulations to avoid losses. Microsoft is known to have a clean and robust track record in its operations.
The Balance of Power as a corporate governance mechanism in Microsoft ensures that officials do not overextend resources. In Microsoft, roles of the management and the directors are well defined which keeps the corporation flexible which ensures any changes within the corporation do not affect the operations.
The effectiveness of leadership in Microsoft Corporation
Microsoft Corporation has soared to the heights of corporate success and achieved a lot of accomplishments in the field of Software and Hardware production courtesy of a highly effective style of leadership. The board of directors has been quite instrumental in ensuring all managers and directors in their respective fields perform as expected. The board has been advocating for and recruiting highly competent individuals into the positions of managers and directors, a factor which has enabled the corporation to have one of the best leadership styles in the corporate world. However, Microsoft should strive to ensure that their employees register in a common union, which will allow them to connect amicably with the corporation's management.
Efforts by Microsoft Corporation to be a responsible corporate citizen
The corporation has always avoided getting into loggerheads with various governments of the countries in which it carries out operations, for ease of doing business. Microsoft corporation conforms to all international regulations such as reduction of pollution while manufacturing hardware, and provision of high-quality goods in line with the consumers' requirements to avoid deception to consumers. Where the corporation has established branches, managers, and workers in those branches required to conduct themselves with due diligence and observe decorum. Also, because Microsoft deals with importing their goods to various countries, it makes sure to follow the rules and guidelines that govern the importation and exportation of goods. The overall effect is that Microsoft Corporation is able to carry out operations in different parts of the world uninterrupted because its operations are legal and authentic.
Jagadish, H. V., Gehrke, J., Labrinidis, A., Papakonstantinou, Y., Patel, J. M., Ramakrishnan, R., & Shahabi, C. (2014). Big data and its technical challenges. Communications of the ACM, 57(7), 86-94.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.
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