This paper defines and exemplifies some of the strategies presented by David (2008) that are currently being used by the Microsoft organization. This work presents different levels of strategy (corporate and functional), some of integration and intensive strategies.Levels of strategyThe corporate level of management consists of the chief executive officer (CEO), other senior executives, and corporate staff. The main role of corporate-level managers is to observe the development of strategies for the whole organization. This role includes defining the goals of the organization, determining what businesses it should be in, allocating resources among the different businesses, formulating and implementing strategies that span individual businesses, and providing leadership for the entire organization.
(Hill & Jones, 2008) The main strategic responsibilities of Microsoft’s CEO, Steve Ballmer, are setting overall strategic goals, implementing the strategic goals and objectives of the organization, giving direction and leadership toward the achievement of the organization’s philosophy, mission, strategy, and its’ annual goals and objectives. According to Hill & Jones (2008), functional-level managers are responsible for the specific business functions or operations (human resources, purchasing, product development, customer service, and so on) that constitute a company or one of its divisions. Thus, a functional manager’s sphere of responsibility is generally confined to one organizational activity, whereas general managers oversee the operation of a whole company or division. Although they are not responsible for the overall performance of the organization, functional managers nevertheless have a major strategic role: to develop functional strategies in their area that help fulfill the strategic objectives set by business- and corporate-level general managers. One of the Bill Gates’ four golden rules working in Microsoft is “Let the engineers rule”. Microsoft employs about 30,000 programmers among its 90,000 people.
In operating groups engineers are involved in every major decision. Not only that, engineers typically get paid more than businesspeople (Kirkpatrick, 2008). In early 1994, Gates received e-mails from two young employees, Jay Allard and Steve Sinofsky, who argued that Microsoft’s current strategy was misguided and ignored the rapidly emerging Web. In companies with a more hierarchical culture, such action might have been ignored, but in Microsoft, which operates as a meritocracy in which good ideas trump hierarchical position, it produced a very different response. Gates convened a meeting of senior executives in April 1994 and then wrote a memo to senior executives arguing that the Internet represented a sea change in computing and that Microsoft had to respond.Integration strategiesMicrosoft is using a forward integration strategy, which usually involves gaining ownership or increased control over distributors or retailers.
(David, 2010) Microsoft’s forward integration includes opening its own retail stores. Microsoft wants to learn firsthand about what consumers want and how they buy.Intensive Strategies A market penetration strategy seeks to increase market share for present products or services in present markets through greater marketing efforts. Market penetration includes increasing the number of salespersons, increasing advertising expenditures, offering extensive sales promotion items, or increasing publicity efforts. (David, 2010) Microsoft’s software products include operating systems, programming languages, application programs, communications programs, and an on-line network.
Microsoft also develops and markets microcomputer-oriented books, hardware, and multimedia CD-ROM products. Software sales by Microsoft count three sources: boxed software on merchant shelves and online stores (CompUSA, Best Buy, etc.), installs on computers before sale (referred to as OEM - Original Equipment Manufacturer), and volume sales through vendors. Microsoft’s Cloud Strategy example: Microsoft's product strategy is to deliver a complete CRM suite with accompanying platform support in a variety of delivery models and at an aggressive price point. For software-as-a-service (SaaS) CRM, Microsoft has raised the bar by lowering subscription pricing and backing on-demand software delivery with solid Service Level Agreements (SLAs) complete with financial guarantees.
Market development involves introducing present products or services into new geographic areas. (David, 2010) Microsoft has a huge variety of offices all over the world including Asia, Europe, Middle East and Africa, North ; Central America, South America, South Pacific.
