Executive summary

On April 4, 1975, the same year that it was founded, American global computer technology giant Microsoft had its start as a fledgling business project. Microsoft is now a multinational corporation. The development of the Windows operating system is directly responsible for the rise in popularity of the company, which can be directly ascribed to the success of Windows. Microsoft is currently the most successful software corporation in all of the world’s countries and regions combined. Bill Gates, who did not graduate from Harvard College, and Paul Allen, who had been his best friend since they were children, founded the company in 1975. Bill Gates did not finish his schooling at Harvard College. They collaborated on the Business project to establish Microsoft as a successful company.

In the document that can be seen by clicking on the link that is provided below, there is an assessment of the difficulties that are currently being encountered by the organization. The problem of competition from other companies like Google and Apple is currently causing Microsoft to have financial challenges. These difficulties are a direct result of the problem of competition. The issue is directly responsible for the financial losses that have been incurred by the company. Additionally, Apple and Google are major competitors in this particular segment of the market.

The report that is attached to this message and that has been made available for your reading contains an in-depth study of the issue, for which the organization is currently seeking to locate a solution. You can find this analysis in the report that has been made accessible to you. It takes into consideration the impact that the issue has had on the stakeholders, as these people are the ones who are most likely to be impacted in some way by the issue. This is why it is important to take into account the impact that the issue has had on the stakeholders. In light of this, it makes perfect sense to investigate the potential effects that the matter may have on the many parties who are involved. A secondary study of the data that was collected by the organization is carried out to discover replies that are appropriate in the real world. This investigation’s objective is to determine not only the factors that contribute to the company’s challenges in dealing with the problem at hand, but also the many potential solutions to the problem that are currently available to them as a method of achieving their goal of achieving this objective. The examination of possible solutions to the problems that have been covered throughout the essay is brought together in the section of the essay that serves as the conclusion. In addition, the general outcomes of the study as well as the interpretations that were formed from it are discussed in this section as well.

Introduction of Business Project

On April 4, 1975, the company that would go on to become the American multinational computer technology business Microsoft was established (Lucas, 2021). The company gained a lot of notoriety due to the development of the Windows operating system. At the moment, Microsoft is the most successful software corporation in the world. Bill Gates, who did not graduate from Harvard College, and Paul Allen, his best friend since childhood, established the company in 1975. They worked together to establish Microsoft (Arun, 2022).

An analysis of the challenges that the organization is currently facing can be found in the study that can be found below. Microsoft is presently dealing with competition from Google and Apple, which is causing the corporation to lose a significant amount of money as a direct result of the issue. Apple and Google are both major competitors in this industry (ICMR, 2020).

An in-depth analysis of the issue that the organization is now working to find a solution for can be found in the report that is attached hereto and is made available for your perusal. It takes into account the effect that the problem will have on the stakeholders, since they are the ones who are most likely to be impacted by the problem. In light of this, it makes perfect sense to evaluate how the issue would affect the various stakeholders. To locate practical responses, a secondary examination of the data collected by the organization is carried out. The purpose of this research is to ascertain both the reasons why the organization is having difficulty with this matter and the many options for resolving the matter that are now open to them. The discussion of potential solutions to the issues raised throughout the essay is brought together in its conclusion section, along with the overall findings and interpretations drawn from the inquiry (Marcus, 2020).

Challenges and Problems

Accurate forecasting needs practice. This can be attested to by the famed “Silicon Valley guru” who predicted Microsoft would go bankrupt in six quarters a decade ago. Microsoft is no longer alive. He declared Microsoft a laughingstock in the middle of 2011.

Apple and the M1 dilemma

For several decades now, Microsoft and Apple have competed against one another in the market for desktop computers, and the situation hasn’t significantly improved over that span of time. In spite of their more expensive cost, Macs have found widespread adoption in the creative sectors. On the other hand, Windows-based personal computers have become the standard in the business world (Bott, 2021).

The link remained stable so long as both computers utilized central processing units that were compatible with Intel. However, the introduction of Apple’s most recent Macs, which come equipped with the company’s own custom M1 processors, has caused a significant shift in the market.

Microsoft, in contrast to Apple, has a wealth of experience in the design of SoCs, and its cooperation with Qualcomm is analogous to the long-standing work it has done with Intel (Bott, 2021). It is difficult to imagine Windows PCs catching up to Macs with the M1 processor if there isn’t some form of interaction between the two. Or how they plan to compete with the growing number of iPads that are equipped with the M1 processor, which enables them to perform actions that were hitherto exclusive to PCs.

Google and the new browser war

At the turn of the century, the only game in town was Internet Explorer, which was developed by Microsoft. In the early 2000s, Internet Explorer from Microsoft was the web browser that was considered to be the industry standard for accessing the World Wide Web on personal computers.

The market dominance of Internet Explorer was gradually lost when alternative browsers joined the market. However, the erosion accelerated significantly after Google released Chrome in 2008, which caused the erosion to occur much more quickly. And during that time, Microsoft has not taken any steps to improve the situation (Bott, 2021).

Although Microsoft’s new Edge browser, which was bundled with Windows 10 and set as the default, got off to a strong start, it was unable to compete with Google Chrome’s speed and functionality. At the end of 2019, while I was going through the data regarding browser usage, I noticed the following:

According to the findings of the Digital Analytics Program run by the United States Government, Microsoft Edge is responsible for less than 16% of the traffic generated by computers running Windows 10, whereas Internet Explorer is responsible for a higher percentage of the usage. This is a significant drop from the 20% share of Windows 10 PCs in 2017, which was achieved in 2017. On the other hand, more than sixty percent of Windows 10 users make use of the web browser Chrome (Bott, 2021).

After doing beta tests for quite some time, Microsoft finally released a completely redesigned version of Edge in January of 2020. It was developed with the same open-source Chromium code foundation that Google Chrome uses. To compete with Chrome, Microsoft has developed a new web browser called Edge that is a cross-platform application that can run on mobile devices, personal computers running Windows or macOS, and even Linux-based computers (Bott, 2021).

Purpose of the Report

Microsoft Consulting prepared this report, which may be seen here. The fundamental objective of this report is to carry out a study into the difficulty that the company is now dealing with. The problem at hand, in addition to the impact that it has on the many different people who are engaged, is investigated in minute detail. After investigating the matter, the organization is made aware of the appropriate courses of action to take. They can employ to compete in the landscape of the commercial environment, which is always altering and undergoing change.

Stakeholder Analysis

Customer

Increased competition may lead to improvements in the quality of products and services offered, as well as lower prices and additional choices for customers. On the other side, if there is an excessive amount of competition, customers may feel overloaded and be unable to select the optimal solution for their needs (Marcus, 2020).

Shareholders

It is probable that the company will experience a decline in its bottom line if there is a large degree of competition in the market. If Microsoft is unable to successfully compete with its competitors, this might lead to a decrease in revenues and earnings, which, in turn, could cause the stock price of the firm to decrease (Aina, 2020).

Employees

The existence of enterprises that are in direct competition with one another can act as a motivating factor for innovation, which in turn can result in the production of new items and opportunities for advancement for workers (Dash, 2023). On the other hand, if Microsoft were to come out on the losing end of the competition, it might result in the loss of employment, along with less remuneration and fewer benefits for its employees. Additionally, if Microsoft were to come out on the losing end of the competition, it might result in the loss of jobs. In addition to this, if Microsoft were to come out on the losing end of the battle, it might also result in the loss of consumers (Alya, 2022).

Suppliers

As a result of there being more competition, it is possible that suppliers will be put under more pressure to reduce their prices and produce products of a higher quality (Tong, 2020). The capacity of suppliers to turn a profit could be impacted in any direction by either of these two considerations. Customers may experience a greater sense of pressure to make their purchases from vendors who have a higher reputation. Because of this, merchants may compete with one another for their project management and business management (Yaling, 2020).

Partners

Microsoft works with a wide variety of partners, including businesses that produce both hardware and software, as well as businesses that provide a variety of services. If Microsoft is successful in its competition, it may be in a position to aid its partners by contributing to the expansion of demand for the goods and services that those partners supply (Jones, 2022). This would allow Microsoft to benefit its partners. This is something that could happen as a result of Microsoft increasing its market share. This would be to the benefit of every person who participated in the activity (ICMR, 2020). On the other hand, if Microsoft is unable to effectively compete in its market, it is possible that there would be a decline in demand for the items that are offered by its partners. This would be negative for both parties. This may cause issues for Microsoft’s partners (Calero, 2019).

Mendelow Matrix

Mendelow’s matrix, also known as a power-interest matrix, is a tool for evaluating a firm’s stakeholders based on their influence and investment in the company. The matrix categorizes stakeholders as having high power and interest, low power and interest, low power and interest, or low power and interest.

A Mendelow matrix analysis reveals the following Microsoft stakeholders:

High power High Interest

This group includes powerful shareholders, prominent clientele, and influential employees. These parties are important to Microsoft because they are invested in the company’s success. Microsoft must maintain open and constructive communication to maintain this group’s support (David, 2021).

High power, Low Interest

Government agencies and regulatory bodies are examples of powerful but disinterested players. They have the authority to limit Microsoft’s activities but are uninterested in the day-to-day operations of the company. Microsoft must maintain positive working relationships with government agencies while adhering to all applicable laws (Julian, 2021).

Low Power High interest

Smaller shareholders, communities, and interest groups all fall into this low-power/high-interest grouping. While they may not have direct influence over Microsoft’s business project, they do have a say in how the public perceives the company. Microsoft must connect with this group and listen to its critiques to maintain its good name (Sean, 2021).

Low power, Low interest

In terms of impact and concern, the general public and competing corporations rank last. Even though they have no power or stake in Microsoft’s business, the corporation should monitor what they say to defend its reputation.

Microsoft can better engage with its different stakeholder groups and manage their expectations by analyzing stakeholder needs using Mendelow’s matrix (Patrik, 2020).

Secondary Data Analysis

VRIO Analysis

The Value, Rarity, Imitability, and Organization (VRIO) analysis is a framework that is used to evaluate the resources and capabilities of an organization. It is named after the four factors: value, rarity, imitability, and organization. The following is a VRIO analysis of Microsoft, which includes them all:

Valuable

The capabilities and methods at one’s Microsoft is a firm that is known for its strong reputation as a brand, as well as its significant research and development capabilities. The company’s products include a wide variety of software and hardware options (Chao, 2019). The organization’s ability to provide cloud-based services, such as Azure and Microsoft 365, leads to the production of additional value because of the organization’s ability to do so (Carlos, 2019).

Rarity

Second, when compared to other companies in the technology industry, Microsoft is in possession of a lot of resources and capabilities that are not available anywhere else in the sector. It is extremely unusual for a single company to manage so many famous software packages like Windows and Office, and it is also quite difficult to recreate this level of success. Microsoft is the only company that comes to mind when thinking of this scenario (Denni, 2019). The amazing connections that this company has with customers in the public as well as the private sector is yet another quality that sets it apart from other organizations (Aviv, 2020).

Imitability

Microsoft’s large patent portfolio, which serves to legally safeguard the company’s intellectual property, is one evidence of the company’s unequaled resources and talents. The portfolio also serves as an example of Microsoft’s unrivaled ability to innovate. This is only one example of the unparalleled resources and expertise that Microsoft possesses. Competitors will have a difficult time replicating the model of the company because of the imaginative culture of the company and the fact that it is successful in attracting and maintaining exceptional personnel (Aontonio, 2020).

Organizational

Microsoft possesses a solid organizational framework, and its resources and competencies are structured and managed in an effective manner across the corporation. Both the management system and the clearly outlined processes that are currently in place at the organization work together to guarantee that the available resources are utilized in an effective manner (Harsh, 2021).

According to the findings of the VRIO study, Microsoft has a competitive advantage in the market for technology because the firm has access to several essential and distinctive resources and capabilities that its competitors would have a difficult time reproducing. This gives Microsoft an advantage over its competitors in the technology market. In addition, the company has done an excellent job of managing both its resources and its competencies, which enables it to maximize the potential that each of these things offers (Zakiya, 2019).

Financial Analysis

The revenue generated from the sale of software and services hosted in the cloud by Microsoft Corporation is the primary source of funding for the global operations of the corporation. The following is an overview of Microsoft’s financial situation (Inge, 2019):

To begin, Microsoft’s revenue for the fiscal year 2021 was $168.1 billion, representing a 15% rise over the previous year’s total. Azure and Microsoft 365 are the firm’s two most popular cloud solutions, and they are largely responsible for the significant revenue growth that the company has experienced (Tyler, 2022).

The net income that Microsoft reported for FY2021 was $61.3 billion, which is a year-over-year increase of 38%. The biggest factors in the company’s increased net income were a higher tax rate reduction and an increase in the company’s revenue.

The gross margin for Microsoft’s revenue in the fiscal year 2021 was 68%, which is an improvement over the previous year’s figure of 67%. A transition toward higher-margin cloud-based services was beneficial to the company’s gross margin, in addition to the increased sales that the company saw (Umit, 2023).

The return on equity (ROE) for Microsoft in FY2021 was 47.2%, representing a considerable rise in comparison to the ROE of 36.9% in FY2020. The increased return on equity was driven by the increased net income as well as the decreased equity base that resulted from share repurchases.

In the fiscal year 2021, Microsoft had a debt-to-equity ratio of 0.46, which indicates a very low level of debt compared to equity.

The positive trends in revenue growth, net income growth, and return on equity that Microsoft has been experiencing in recent years are all indications that the company’s overall financial performance is on the rise. In other words, things are going quite well for the corporation. The firm’s shift toward providing cloud-based services, which have higher profit margins, is the key factor contributing to the expansion and profitability of the business project that is currently being carried out by the corporation. Microsoft also has a debt load that is not exceptionally significant, which is another piece of evidence indicating that the company is in a stable financial state. This stability may be attributed to the fact that Microsoft has a low percentage of its total assets that are held in debt (Surajit, 2019).

Non-Financial Analysis

One of the aspects that sets Microsoft apart from its competitors is the company’s dedication to research and development (R&D), as well as its readiness to invest significant resources into the production of innovative technologies and products (Chen, 2019). This is a characteristic that sets the company apart from its competitors. As a result of the organization’s culture of innovation, which contributes to the formation of this environment, the organization develops an atmosphere that recognizes the creative efforts of its employees and encourages them to collaborate. This environment also encourages the employees to work together (David, 2021).

Second, Microsoft is a well-known corporation in the corporate sector, and the business community acknowledges the high quality of the company’s goods as well as the high quality of the services that it offers. The provision of information technology solutions that are both forward-thinking and conscientious toward the environment has been the linchpin of the company’s rise to the top of its industry (David, 2021).

Thirdly, Microsoft has a strong commitment to corporate social responsibility (CSR), which it demonstrates through a variety of projects that focus on areas such as education, sustainability, and community development. These areas include: The Company is committed to reducing its overall carbon footprint, and to that end, it has made significant expenditures in initiatives that encourage the use of renewable energy sources (Fatima, 2023).

Microsoft is a company that places great value on the contributions made by its employees, and as a result, the software giant has developed an all-encompassing plan for the management of its employees’ talents (Lucus, 2020). The company places a significant amount of importance on the ongoing education and development of its staff members, and it offers a wide selection of enticing incentives to attract and retain talented employees on its payroll to achieve its goals (Manan, 2020).

Microsoft places a great value on the satisfaction of its customers, and to that end, the firm has built several policies and programs that are directed toward satisfying the demands of those consumers. This is done to fulfill the high priority that Microsoft places on the satisfaction of its customers (Walter, 2021). This demonstrates that Microsoft places a high importance on the happiness of its clients, as demonstrated by the fact that they have achieved this goal. The company has a customer care department, and it routinely reviews, modifies, and enhances the products and services it offers in response to the feedback and suggestions offered by customers (Milan, 2020).

PESTLE Analysis

Political

Microsoft is well aware of the political difficulties that can be found in the nations in which it operates its businesses. These obstacles consist of, among other things, constraints on data privacy, laws regarding intellectual property, and antitrust legislation. Because of this, regulatory agencies could potentially sanction Microsoft with a fine or other form of disciplinary action (Milan, 2020). These rules and regulations have the potential to have a big impact on Microsoft in a variety of different ways, which might be beneficial or detrimental depending on the circumstances. In the past, antitrust investigations have been conducted into Microsoft; the ongoing scrutiny it receives from regulators may hinder the company’s capacity to develop its business or buy other companies (Vipul, 2021).

Economic

The condition of the global economy has the potential to affect the total quantity of money that Microsoft makes, as well as how profitable the company is. When the economy is doing well, there is often a great demand for software and services. This is in contrast to times when the economy is doing poorly (Wang, 2019). On the other hand, demand is likely to fall when the economy is performing poorly because of the correlation between the two. When the economy is doing well, there is often a great demand for software and services. This is in contrast to times when the economy is doing poorly (Rubi, 2020). The rates of exchange between the various currencies may affect Microsoft’s overall financial performance. This possibility exists because of the company’s international operations. This is because the vast majority of Microsoft’s revenue originates from markets that are located in nations other than the United States of America. In other words, the United States of America is not Microsoft’s primary market (Roberto, 2019).

Sociocultural

As a result of the fact that Microsoft does business in a diverse range of cultures and markets, the company is required to make adjustments to the products and services that it offers in order to cater to the requirements and preferences of the many different kinds of customers that it serves. These adjustments can be made to ensure that Microsoft is successful in achieving its business project goals (Marchel, 2020). Alterations in society, such as the expanding usage of mobile computing and cloud storage, have the potential to have a range of consequences for the commercial operations of Microsoft. These repercussions have the ability to affect a variety of Microsoft products and services. These repercussions could manifest themselves in a variety of different ways (Molly, 2022).

Technology

A source of information, Microsoft, a company whose primary concern is technological advancement, has been profoundly influenced by the numerous technological advancements and innovations that have been developed in recent times as a direct result of the company’s unwavering commitment to technological advancement (Munro, 2020). This takes into account developments in a diverse range of fields, including, amongst others, artificial intelligence, virtual and augmented reality, and the internet of things, amongst others. If Microsoft wants to keep its position as the leader of the industry, the business must continue to be on the cutting edge of new ideas and make investments in the research and development of emerging technologies. Only then can Microsoft hope to keep its current position (Molly, 2022).

Legal

Microsoft is expected to comply with a wide number of rules and regulations, some of which pertain to the security of customer data, intellectual property, and the company’s intellectual property. Microsoft is also required to protect its intellectual property (Simon, 2021). Microsoft is obligated to comply with a wide variety of laws and regulations, including those that are designed to protect intellectual property. In the past, Microsoft has been the target of legal challenges stemming from alleged infringements of intellectual property rights as well as debates around patents. These disagreements may go back further in the company’s history than that. In addition to this, it has been suggested that Microsoft stole trade secrets from its rivals (Topin, 2020).

Environment

To live up to its obligation to maintain the natural environment, Microsoft has committed to reducing its “carbon footprint” and to increasing the amount of money it invests in the research and development of renewable energy sources by an equal and opposite amount. The company has pledged to achieve carbon neutrality by the year 2030 and has made significant financial investments in the research and development of technology that encourages energy efficiency and the use of renewable energy sources (Satish, 2021).

Recommendations and Conclusion

Spending more of your company’s resources on the diverse product range offered by Microsoft will help you reduce the dependence that your business project has on a particular product or service. Experimenting with cutting-edge technologies or breaking into new market segments are two examples of what this may involve (Calero, 2019).

For Microsoft to realize its long-term goal of remaining a dominant player in its industry, the corporation must continue its long-standing commitment to innovation and its openness to exploring new avenues of business. The provision of financial resources for research and development, as well as the encouragement of staff employees to work together as a group, are two possible examples.

Third, in order to produce cutting-edge new products and services, Microsoft should consider forming partnerships with other businesses operating in the same sector. The businesses in question may be hardware makers, software creators, or even some other kind of information technology firm. As a result of this, it will be able to appeal to a wider variety of audiences, and as a result, it will bring in a greater amount of money (Walter, 2021).

Microsoft should make use of the data that has been obtained in order to gain a deeper understanding of the wants and needs of consumers and to influence the creation of future products. This would allow Microsoft to better serve its customer base. It’s possible that this will be of use to the organization in terms of the development of products and services that are more targeted and efficient (Topin, 2020).

It’s possible that Microsoft wants to improve the customer experience in a variety of different ways, such as by providing great customer care, actively listening to and addressing the opinions and concerns of consumers, and supplying high-quality products and services. This has the potential to improve the percentage of customers who remain loyal to the company while simultaneously reducing the number of customers who leave to patronize other businesses (Patrik, 2020).

Porter Five Forces

Michael E. Porter’s Five Forces model, which he developed as a hypothesis, is an idea that has the potential to be effective when it comes to coping with competition. This model, which was developed by Michael Porter, explains the five primary forces that determine how the level of competitiveness within an industry is altered. These forces are as follows (Zakiya, 2019):

Threat of New Entrant

The degree to which new companies are able to enter a market with relative ease has the potential to have an effect on the overall level of competitiveness that exists in the market. If it is difficult for new businesses to enter a market that already exists, then the amount of intense competition will be reduced (Vipul, 2021).

Bargaining power of suppliers

It is conceivable that the bargaining power of suppliers has an impact not only on the price of inputs but also on the quality of those inputs, which may, in turn, have an impact on the competitiveness of firms that operate within a certain industry.

Bargaining power of the buyer

The ability of customers to bargain for lower prices on the goods and services they buy from businesses can affect the prices that those businesses can charge for those goods and services (Bott, 2021). The greater the bargaining power of customers, the less wiggle room businesses have to raise prices, which can have an impact on a company’s capacity to turn a profit. Customers’ ability to negotiate can be measured in terms of purchasing power. When customers have more leverage, it allows them to negotiate better pricing for their purchases (Vipul, 2021).

Threat of substitute

The presence of goods or services that are compatible with those offered by other businesses has the potential to have an impact on the amount of competition that is present. Businesses will need to compete with one another in terms of price, quality, or any number of other aspects to differentiate themselves from the market if there are other viable alternatives to choose from (Milan, 2020).

Rivalry among existing competitors

There is a possibility that the level of rivalry that already exists among the companies that are currently operating in a particular industry will affect the overall competitiveness of a particular company. Numerous aspects, such as market share, the degree to which products can be differentiated from one another, and pricing strategies, are just some of the aspects that have the potential to affect the final result of this scenario (Molly, 2022).

A company will have a better understanding of the competitive dynamics at play within its industry and will be able to create plans to compete more successfully if it first undertakes an analysis of each of these elements and then puts that knowledge to use. To accomplish this goal, it may be necessary to take certain steps, such as investing in product innovation, cultivating brand loyalty, bringing down expenses, or developing strategic alliances. In the end, the goal of this attempt is to place the organization in a position where it will be able to flourish in an environment where there is a great deal of competition (Marcus, 2020).

Microsoft is a worldwide technology organization that has exceptional financial performance, a culture that stimulates innovation, and a dedication to practicing responsible corporate citizenship. To summarize, Microsoft is an innovative company that has a strong commitment to responsible corporate citizenship (Patrik, 2020). The company has earned a strong reputation in the market not only for the superiority of its wares but also for the range and depth of the services it provides. It is possible to attribute Microsoft’s success in attracting and maintaining outstanding employees, as well as in building long-lasting connections with customers, to the company’s concentration on providing good customer service and talent management. Microsoft has also been successful in developing long-lasting relationships with customers (Sean, 2021).

Despite this, Microsoft needs to continue to put money into research and development, expand its product line, work more closely with its business project partners, and make better use of the information it collects to stay ahead of the competition in the technology industry. In addition, the company needs to continue to make a primary emphasis on improving the experience of its customers to encourage continuous customer loyalty and reduce the risk that those customers would leave the company for one of its competitors (Aina, 2020).