Running head: WEEK 8 ASSIGNMENT 3 1
WEEK 8 ASSIGMENT 3 2
Week 8 Assignment 3
BUS499 Business Administration Capstone
Dr. Brian C. Grizzell
August 26, 2018
Week 8 Assignment 3
Microsoft is the chosen company because it operates in the same industry as Google especially with respect to cloud computing, email, search engine, web browsing, and document management among others. This paper will be discussing the strategies that Microsoft utilizes in comparison to Google. Specifically, business level and corporate level strategies will be reviewed. The paper will also provide a detailed analysis of the competitive environment of Microsoft in relation to other competitors.
A business-level strategy refers to an action that a service provider text to make sure that they add value to the customer and gain a competitive advantage (Campbell & Edgar, 2011). In a business environment, whether or not an organization will be successful depends on its ability to satisfy customers and be competitive. For this to be achieved, it is necessary to take specific actions for the benefit of the company and its customers. The business-level strategies are at the center of this achievement.
Microsoft considers various business level strategies and they include the following cost leadership, differentiation, and the focus strategy. Cost leadership is a business level strategy that focuses on increasing profits. The differentiation strategy involves creativity and innovation of unique products. Microsoft uses the focus strategy to pay attention to market niches and provide them with the product they need.
The best long-term business-level strategy for Microsoft is differentiation. This is the best choice because it will enable the company to come up with unique products that will attract the attention of the consumers in the market. Through differentiation, the company will develop products that will add value to the customers. This will come along with the increased demand which implies that the company will be more competitive. Considering that the industry is competitive, Microsoft should consider coming up with innovative products that are not very similar to what the market already offers.
The corporate-level strategy is an action that a business organization takes to change its overall strategy for increasing its competitiveness in the industry (Thompson, 2001). The business environment is dynamic, and this implies that it changes from time to time. For this reason, it is necessary for businesses to adjust the strategies to adapt to the changes in the environment. As opposed to business level strategies that might just target one department, corporate-level strategies affect all the departments and the organization in general.
Given the industry that Microsoft operates in, the management team utilizes various corporate-level strategies to increase the competitiveness of the company. The strategies include growth, renewal, and stability. A growth strategy focuses on expanding the market by increasing the number of units offered. Renewal strategies basically focus on restoring the former competitive condition of an organization. Lastly, stability is a corporate-level strategy that Microsoft takes to keep doing what is currently being done to maintain its competitiveness.
The most important corporate-level strategy for the long-term success of Microsoft is the growth strategy. As the name suggests, the growth strategy will enable the company to diversify its products into new markets. This implies that it will have to increase the number of units that it provides. The result will be an increase in production as well as an expansion of the market share. Through the growth strategy, a business can secure its long-term success it would have created a platform that provides enough demand for its products and services over a long time. To a very large extent, the corporate level strategies that a business implements determines whether it will be successful in the long term.
The business sector is one of the most competitive areas. Regardless of the industry in which an organization operates, in some way or another, it faces competition (Crouch, 2008). The competitive environment makes it necessary for businesses to utilize the most effective strategies for the interest of staying ahead of the competitors. The degree of the competitiveness of the market significantly determines the degree of the effectiveness of the strategies that businesses intend to utilize. To make sure that competitiveness is maintained, businesses need to understand their environment and the specific strategies that their competitors utilize. This will enable them to come up with competitive strategies.
One of the competitors of Microsoft is Apple. This is considered a competitor because to some extent, it serves the same market as Microsoft. Example, cloud computing, and operating systems. From this perspective, the two target the same market because they provide products and services that are intended to serve the same purpose. Below is a comparison of the strategies between Microsoft and Apple.
1. Market commonality
Market commonality basically is concerned with the markets that different firms or competitors jointly operate. One of the major common markets in which Microsoft and Apple involved themselves in is the cloud computing market. Both companies enable their customers to store the files in the cloud. To deal with market commonality, Microsoft uses in the strategy of growth. This enables as many subscribers as possible to use the service. On the other hand, Apple pays attention to boosting the security of the documents of the cloud.
2. Resource similarity
Given the fact that both Microsoft and Apple operate in the same industry, their resources are highly similar. To make sure that it stands out in such a scenario, Microsoft concentrates on quantity. This is to ensure that it has sufficient resources that can handle its huge market. Apple, on the other hand, has limited resources but it focuses on ensuring that they are of the best quality. In this case, as much as the sauces are similar, the companies use different strategies to stand out (Crouch, 2008).
3. Competitive behavior
The chances of a business being successful in the long-term depend on its competitive behavior. As stated earlier, the major competitive behavior of Microsoft is growth. This enables the company to provide a wide range of products that will enable it to meet the demand in the market. On the other hand, Apple focuses on customer satisfaction by ensuring that its products meet and surpass customer expectations. The competitive behavior is critical to the success of a business.
4. Competitive dynamics
Competitive dynamics are basically their actions for responses that a business takes as a reaction to the competitive environment. Both Microsoft and Apple have a similar strategy when it comes to competitive dynamics. Due to the nature of the competitiveness of the environment that the businesses operate in, they usually conduct extensive research to understand the various factors that affect the market which could be fundamental for competitiveness. When businesses operate in a very competitive industry it is important for them to be swift in terms of competitive dynamics as this could be the difference between success and failure, especially in the long term.
In the long-term, Microsoft is likely to be more successful as compared to Apple. The major reason for the success of Microsoft is market growth. The company provides its cloud computing services in virtually to anybody provided they create an account. Giving the rise of cloud computing, many business organizations are engaging in the same industry and this implies that there will be stiff competition especially in terms of getting a market share (Thompson, 2001). By focusing on growth, Microsoft is creating a platform that will enable it to expand its market share and be a giant in the future. Once the market has been effectively established, Microsoft will concentrate on other issues such as maintaining the security as well as the overall quality of its services.
As much as a majority of the consumers are more interested in quantity than in quality, it is important for businesses to focus on quality as this is the strategy that will enable them to expand its market share.
There are two major types of market cycles, the slow cycle market, and their fast cycle market. A slow cycle market is a market in which the competitive advantages of a company are shielded from imitation for a considerably long period of time (Blowfield, 2013). In the case that any competitor tries to imitate such strategies, it would be very costly, therefore, almost impossible. In other words, in a slow cycle market, the competitive advantages of a company are sustainable because the competition is highly limited.
In a fast cycle market, the competitive advantages of a given company are not shielded from imitation. It is also cheap and easy to imitate such competitive advantages. Competitors can quickly copy from each other. In other words, in a fast cycle market, the competitive advantages of a business organization are not sustainable because they can easily be imitated by others.
The selection made in question 3 will be the same in slow cycle markets but it will differ in the fast cycle markets. Microsoft will survive in a slow cycle market because it has already put down measures that have enabled it to gain a huge share of the market. It would be unreasonable to think that any competitor will find it easy to compete against Microsoft especially in terms of market share as far as the operating system sector is concerned. Microsoft controls more than 35% of the operating systems market share with the closest competitor Apple, coming in at 12%. The choice is not applicable in the fast cycle market because, in such markets, it is easy to copy from competitors.
Blowfield, M. (2013). Business Sustainability. Oxford: Oxford University Press.
Campbell, D. & Edgar, D. (2011). Business Strategy: An Introduction. Basingstoke: Palgrave Macmillan.
Crouch, A. (2008). The Competitive Mind: Strategy for Winning in Business. Hoboken: Wiley.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic management: Concepts and cases: Competiveness and globalization(10th ed.).
Thompson, J. (2001). Understanding Corporate Strategy. London: Cengage Brain.