STRATEGIC MANAGEMENT

Strategic Management

[Name of the Inst]

Microsoft StrategyIntroduction

In today's rapidly changing business environment, the role of business strategy is vital for the success of any business, especially in technology and software business. Business strategy can be defined as setting up the overall direction of a business that allows the business to develop a long-term plan in order to achieve its particular goals (Baye, 2009). In other words, the business strategy directs the company for how to conduct its business and attain the desired goals. It is important to know that developing a business strategy is a crucial as well as vital management function. In addition, it is also equally important to understand that strategy creation is not enough for the success of any business. This means, it is also essential to ensure proper implementation of the strategy to achieve business goals.

Discussion

In less than 40 years, Microsoft has become a worldwide leader in the field of technology. Today, the company operates on 5 major divisions or segments: Devices Division and Entertainment, Microsoft Business Division, Online Services Division, Server and Tools, and Windows Live Division & Windows.

Past five years result of Microsoft shows that the organization has been profitable (+33% on operating income; +20% on revenue) between the year 2007 and 2011 (Gurau, Ranchhod & Hackney, 2001). Nevertheless financial reports indicate that each segment has not supported profit equally. Therefore, as the management team, which recommendations for Microsoft could be done for 2012 and beyond for each segment?

I. Windows & Windows Live Division

This segment of Microsoft offerings consists of numerous versions of the operating systems of Windows, services and software through hardware products of Microsoft PC and Windows Live. Windows live & Windows division have a very significant impact on Microsoft performance, indeed this segment represent 45% of the total operating income. Even if we can observe a slight decrease on income, between 2010 and 2011, higher expenses in marketing and a decrease on the notebook market explain it (McKay & Marshall, 2004).

Though Windows segment income is mainly linked to the PC marketplace globally, as around 75% of total Windows segment income generates from software of Windows operating system, bought by manufacturers of equipment which they install before selling the equipment. The Operating systems Window 7 and Windows XP have great performance with 87% of the market share.

Like the consulting team, we advice Microsoft to persevere with windows 7 and continue to optimize it for professional market (+11% in 2011), furthermore prepare windows 8 to be effective on utrabooks and tablets. Indeed, ultrabooks and tablets markets are expected to grow fast.

II. Server and Tools

Tools and Server develops and markets solutions, services, software developer instruments, and software of server that are developed to make developers and professionals of information technology and their systems more efficient and productive. This segment also represents a good part of the Microsoft positive performance of 2011. Indeed, 24% of the total operating income comes from the Server and Tools ...