Microsoft Introduction and History: There are very few people in the world today that can honestly say that they do not know who Bill Gates is. This Harvard dropout is quite possibly the most well known, and wealthiest person in the world. Even at the age of fourteen, Gates was on the road for success after he started his own computer programming company. This company, the Lakeside programming group, was credited for writing programs for his schools payroll account. Only after a year of higher learning, Gates and long time friend Paul Allen from the University of Washington, dropped out of college and moved to Albuquerque, New Mexico in 1974.
Upon their arrival in New Mexico, Gates and Allen started Microsoft, which is now a multibillion dollar computer software company. Initially Microsoft was a small company that did programming from a computer company called MITS. One of Gates and Allen’s first big accomplishments working for MITS was to write a programming language called BASIC. When MITS went under, Gates and Allen had to look for other opportunities and relocated their company back to their home town of Seattle, Washington. At the same time the computer giant IBM realized how large the personal computer market was becoming, and decided to jump on the band wagon when they saw that they were considerably behind the competition in developing a PC product. IBM threw together a machine made mostly from other companies parts and tried to out source the software for the operating system. After being rejected twice by programming firms, including Microsoft, Bill Gates realized what a profitable opportunity it would be to move in on IBM’s enormous market share.
Gates borrowed fifty thousand dollars from his father, who was a prominent Seattle lawyer, and bought the rights to an operating system sold by Seattle Computer Products. An operating system is the language that links the keyboard, screen, printer, microprocessor and computer and allows the parts to communicate. Gates then approached IBM to sign agreements to develop the systems for their PC’s. This decision would later become legendary. Gates soon perfected this operating system and called it MS-DOS. MS-DOS promptly became the industry standard because of IBM’s influence in the market. Microsoft became a wealthy company almost overnight, and is widely known as a leader in the software industry.
Shortly after the company’s inception, Microsoft started producing software programs, some of which are today, the most widely used everywhere. The famed software programs include Microsoft Word, Macintosh Word, and Excel. Microsoft forced its way into the market and has gradually added different programs to its team. In 1982 the developed Microsoft Multiplan for the business community, and in 1983 they developed their first word processing program to compete with word perfect. In addition to that, IBM urged Microsoft to make Microsoft Word available for the Macintosh. Then Microsoft decided they needed a to add a multitask operating system, which would allow the user to have word processing, spreadsheets, and several other computer applications working together.
In 1984 Microsoft developed their biggest breakthrough in the operating systems market, a graphics based operating system called Windows. Windows allowed Microsoft to match the user friendliness of Apple Computers operating system, giving them another stronghold in the ever growing personal computer market. This development became extremely important for the company because Windows is now the standard system installed on new computers. In 1992, Microsoft started to dive into the emerging market of networking computers and developed Windows NT. As upgrades continued and the development of Windows 2000 became available, Microsoft became the largest and the strongest computer company in the world.
With Gates at the helm steering his company into the future, by hard work and dedication, it is no wonder that he is the richest man in the world. Strengths and Weaknesses: Not mentioning Bill Gates as an incredible strength for Microsoft would be a great unjust for the company. Gates insight and decisions, has given Microsoft a virtual monopoly in the computer software industry. Microsoft had more than 20 projects in development in 1996, and though Microsoft usually is not the first to come out with a product is always, and undoubtedly proven to be the best. Revenues for 1996 were $8.67 billion and net income was $2.2 billion, with respective increases of 46 and 48 percent from the previous year.
Its employee base has risen from 80 in 1980 to 18,000 in 1996. Some people might object to Bill Gates tactics of taking other peoples ideas and making them better. Gate’s gift of opportunism and timing has made Microsoft a firm to be compared to. As a result of Microsoft’s accomplishments, the company has become incredibly wealthy. Because of the amount of capital Microsoft can work with, they are able to spend tremendous amounts of money on such things as research and development and aggressive marketing of their products. Their immense capital allows them to buy out any emerging competition, which they have been known to do.
One of Microsoft’s strongest assets has been their ability to expand with the industry. They have demonstrated this with their development of MS-DOS and the constant upgrades, and onto graphical operating systems, networking, and presently web browsing systems. A further strength for Microsoft is their team approach to projects. This allows an array of ideas to be tossed around when deciding how a project goal can be reached. Another strength is Microsoft’s ability to move into international markets.
They have accomplished this by creating their operating systems in several different languages. As the markets evolve, Microsoft believes that they can be a forerunner in the industry abroad. For this reason Microsoft has opened several operations throughout the world, making them a truly multinational company. It is a challenge to find a weakness in a company that is so profitable as Microsoft. However, some critic’s say that Microsoft’s immense size is a downfall for the company. The company may find that they are in a rut following old ideas and not being able to see new opportunities.
Another weakness that is also considered a strength is Microsoft’s team oriented approach to projects. When projects are completed the teams are disbanded and are put into new groups. This is supposedly how information is passed between the divisions. However, some claim that the constant changing of groups causes inefficiency. Opportunities and Threats: The computer industry is full of unlimited opportunities, and seizing opportunities is what Gates and Microsoft does best. Currently the market for web browsers is Microsoft’s current target. Presently Netscape is the market leader of the internet, but knowing Microsoft’s goal of being the best, the tables will soon change.
Another opportunity for Microsoft is the international market. They have bought out the rights to distribute other American Company’s products overseas. Microsoft has seen the opportunity of going abroad, and is currently doing forty percent of their business there. As the international market evolves Microsoft believes it can be a dominate force. Although there are hundreds of other computer companies that exist, none can compete at the same level as Microsoft.
However in the cutthroat industry of computers, it would only take one idea to knock Microsoft of their pedestal. Technology is always changing and Microsoft can not stop for a minute and let their market share slip. The most current and challenging threat to Microsoft is in the arena of web browsers. Netscape Navigator and Microsoft Internet Explorer have been going toe to toe for some time now trying to be the best in the industry. In fact Microsoft has been involved in lengthy battles with Netscape and others that claim that Microsoft had violated anti-trust laws. Not only do they stand to loose in court but the bad publicity has put Microsoft on the front page of the news.
SWOT Analysis: It is easy to see that Microsoft is unequivocally weighted down with strengths. Bill Gates has strategically placed his company in the industry in such a way that it is virtually impossible to compete against. When a smaller more innovative company makes an ingenious product, Microsoft simply buys them out, avoiding competition. Their strategy is to allow a smaller company to create an idea and test market their product to see if the customer wants it; then to simply, buy it, stamp Microsoft on the label and make millions on someone else’s idea. Microsoft’s major external threat will be, and currently is, the United States Government, because of these tactics.
It is highly debatable weather Microsoft has a responsibility to provide opportunities for competition or not. One of Microsoft’s most noteworthy strength is the low annual turnover, which is roughly less than 10 percent. In an industry where loyalty to the company is virtually non existent, Microsoft has been able to beat the statistics. Microsoft’s innovative approach to benefits, are legendary. Microsoft was the first company to pay its employees with stock options instead of large wages.
The stock options plan given by Gates has made Microsoft managers millionaires. This increases the overall productivity of the company. Microsoft’s opportunities are almost as impressive as their strengths. By providing free software to users, for example allowing the University of Montana to have an advanced version of Windows 2000, to give feedback on flaws and errors in the system. This allows Microsoft the opportunity to increase customer satisfaction.
Having a high level of customer satisfaction allows the opportunity to attract new customers. To further their opportunity, Microsoft excels at customer service, which may attract buyers who may be intimidated by computers and new technology. By constantly upgrading the quality of its word processing, and spreadsheet programs as well as its operating systems, Microsoft encourages new and current users to stick with their product. Despite Microsoft’s power and size, one must consider possible threats. There have been numerous complaints about the software and the lack of documentation to support their systems.
This results in high learning costs for users. This leaves the opportunity for smaller companies to steal a share of Microsoft’s dissatisfied customers. Corporate-Level Strategy: Microsoft’s strategy of having the dominate market share in the software industry, is a realistic goal. Most of Microsoft’s acquisitions come from other companies inability to emerge from Microsoft’s shadow. These companies are quickly bought up and the information that these companies hold go right into Microsoft’s vault of information.
Due to this and the fact that any new technology is quickly pursued by Microsoft and Bill Gates, Microsoft is no doubt able to be at the throne of the software industry. Structure and Control Systems: Microsoft’s constant requirements to be ahead of the competition, makes it a necessity to keep a rapid pace of the computer software industry. It is essential for Microsoft to get new products out to the market in a timely manner and to respond quickly to technological change. Recommendation: My recommendation for Microsoft is for them to break the company up into several small companies. In doing this Microsoft can have a company for their operating systems, a company for their word processing and a company for their web browsers. This would enable the smaller companies to focus on one aspect of the software industry. A second recommendation that I can offer would be to have Microsoft intensely conduct surveys and questionnaires with customers nationally and internationally via the Internet.
Bibliography www.microsoft.com Bill Gates, Just a Computer Nerd with billions! Business Essays.