Microsoft is an American public multinational conglomerate founded by Bill Gates and Paul Allen in 1975 in Albuquerque, New Mexico, USA. At that time, the founders were students and they wanted to sell their first translator software Altair 8800.
Today, the company is headquartered in Redmond, Washington. Its global annual revenue in 2005 was $39.8 billion and it employs over 60,000 people in 139 countries. Since September 2005, Microsoft has organized itself in three core business groups: Microsoft Platform Products & Services Division, Microsoft Business Division and the Microsoft Entertainment and Devices Division. Microsoft develops, manufactures, licenses and supports a wide range of products and services predominantly related to computing devices. It also provides online communication services and information services through its MSN portals . Thus, the main products of the company are software even if since the beginning it has had a hardware development branch. Thanks to a near monopoly of the market, Microsoft Windows is the leader in the OS industry.
How have those two students built a global company? What was the expansion strategy of the founders of Microsoft?
In order to understand the international policy of the global brand, we will initially focus on the international facts of the company, and in the second part we will study the industry. In the third part, we will analyze the international strategy of the company and, finally, we will focus on the Marketing Mix of Microsoft.
[...] IV) Analysis of the marketing strategy and the marketing mix developed by Microsoft in the overseas markets. In this part, we will define Microsoft's marketing strategy in the foreign markets. Microsoft in undoubtedly an international firm and we will see if Microsoft complies with local demands or not. In this fourth part, we will analyze the marketing strategy, thanks to the study of each aspect of its marketing mix. The elements of the marketing mix are the following: - Product: Having the right product for your market - Price: The price chosen according to many aspects such as your target - Promotion: Different ways of promoting your product - Place: It is often referred as the distribution channel As we mentioned previously, Microsoft is an international group with a ‘glocal' approach of the market. [...]
[...] The strategy of this international company is to global and think local', especially for its marketing strategy. That is why Microsoft is organized according to a matrix organization. The Business Division is divided by type of products whereas in the Sales Operations, people are divided by regions. Today, some international institutions denounce the monopoly of the software giant. The company doesn't respect the fundamental principle of the autonomy of the market (free competition, lack of barriers for entering the market, transparency of the information). [...]
[...] At the beginning of 2006, Microsoft launched its communication strategy named ‘People Ready'. It meant that Microsoft is considering people's jobs and needs to build its products. Microsoft has two aims regarding promotion. The promotion of its products is the first one and the second one is to reinforce its brand image. Microsoft uses TV and print advertisements to reinforce its brand image and new products. Microsoft would like to change its image because it is only well known in the business environment and not in everyday life. [...]
[...] In the third part, we will analyze the international strategy of the company and, finally, we will focus on the Marketing Mix of Microsoft. International Activity of the company In this part of our study of Microsoft as a global company, we will present the international activities of the company. How is Microsoft's structure adapted to its international operations? In order to answer this question, we will first analyze its turnover and its worldwide subsidiaries. Then we will focus on its international significance, its organizational chart and finally, we will present the international characteristics of the firm. [...]
[...] This strategy has been developed by Microsoft in order to impose itself on the minds of customers. Legal constraints According to the Fair Trade Commission[27], the anti-trust law requires a certain level of competition inside the sector. It seeks to prevent business practices that restrain competition such as monopolistic practices. Microsoft has been in a monopolistic position for years. Thus, it does not seem to respect this law which aims to protect consumers, prices and innovation. Consequently, Microsoft has many law suits due to its dominating behavior and its high prices[28]. [...]
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