-Prepared by

Ajay Y Rajagoli
 Microsoft Corporation is an American
multinational software corporation headquartered in
Redmond, Washington that develops,
manufactures, licenses, and supports a wide range
of products and services related to computing.

 Started as a version of the BASIC programming language.

 The company was founded by Bill Gates

and Paul Allen on April 4, 1975.

 Microsoft is the world’s largest software

maker measured by revenues. It is also one
of the most valuable company in the world.
 Vision and Mision
Vision

“A computer on every desk and in

every Home”

Mission

“To help business and people throughout world to

realize their full potential”
 Worldwide Co
Stren

110 subsidiaries
$580 partner revenue
90000 employees
191 countries
640000 partners
ECONOMY
 Revenue $89.22 billion (2016)
Operating income $20.182 billion (2016)

Profit $55.689 billions (2016)

Total assets 193.69 billion (2016)

Total equity 71.99 billion (2016)

 HOW IT ALL
STARTED?????

Dream of having PC
 Bill Gates
William Henry Bill Gates(born
On october 28, 1955) is an
American
Business magnate
(industrialist), philanthropist,
author, and is chairman of
Microsoft, the software company
he founded along with Paul Allen.
During his career at Microsoft,
Gates held the positions of CEO
and chief software architect.
Bill Gates is still the Worlds richest Man
(2016)
Paul Gardner Allen
Paul Gardner Allen
(born January 21, 1953) is
an American investor and
philanthropist who co-founded
Microsoft with Bill Gates and
is one of the wealthiest
people in the world with a
personal wealth of
US$22.6 billion
as of 2017.
Founding
1975 – Popular Electronics magazine
featured a cover story for Altair 8800 (first
personal microcomputer).This inspired Gates
and Allen to develop a version of the BASIC
Programming Language for the Altair.

Microsoft (Originally Microsoft) was formed

in , New Mexico, to develop versions of Basic
Programming Language for other
companies.
 HISTORY OF MICROSOFT
1975 Microsoft is founded by Bill Gates and
Paul Allen; they sell BASIC, programming language
Micro Instrumentation and Telemetry
Systems (MITS).
 The MITS ALTAIR 8800 (microcomputer) is
considered to be the first successful personal
computer. 
 MITS Microsoft's first customer.

1981 Microsoft was incorporated;

 IBM(International Business Machines) the largest
computer company in the world, uses Microsoft's 16-
bit operating system for its first personal computer.
1983 Microsoft introduces the Microsoft Mouse
and Word for MS-DOS 1.00.

1985 Microsoft and IBM forge a joint

development agreement. They launch Windows 1.0
( first window based OS) and after that in 1986 Bill
gates become youngest billionaire at the age of just 31.

1990 The company becomes the first PC

software firm to surpass $1 billion of sales in a single
year.
1992 The company introduces Windows 3.1.
Windows now has over 25 million licenced users .
2005  launches MSN (is a collection of Internet
sites and services provided by Microsoft) a new Search
service, available in 25 markets and 10 languages. The
new MSN Search service delivers results of greater
relevance, instant answers to specific questions, and a
collection of tools that give Internet users greater
control in targeting and refining searches.
2008 Bill gates leaves Microsoft to pursue charity work.

2009 In this year Microsoft released windows 7. Beats

all previous records of sales.
2010 For the first time, Apple comes close
to Microsoft and becoming the most valuable
technology company in America.

2012 Microsoft launch windows 8 ( for all

people ), Internet Explorer 10 etc.

2013 Windows 8.1 was released to

consumers along with Office 2013.

2015 Windows 10 was released.

TIME LINE OF MICROSOFT
LOGOS
 Microsoft's organisation
structure in the beginning years

Like most businesses Microsoft started

out with a flat organization structure and
gradually expands to a tall organization
structure because implementing and managing
flat structures is challenging, narrow span of
control, job complexity and greater
coordination. At the beginning, Bill gates
wanted to create a family work environment as
Microsoft had only 3 original employees.
Flat organisation structure
 Microsoft's organisation
structure in the beginning
years
Microsoft organisation
structure in 2017

As of 2010 under Steve Ballmer,

Microsoft has adopted the divisional
organizational structure each division
focuses on a specific line of goods and
services with their every own research and
development, Sales and Customer Service
Staff.  
Divisional Structure
Microsoft organisation structure in
2017
 Advantages and Disadvantages of
Divisional Structure
Advantages:
Divisions
 work well because they allow a team to focus
upon a single product or service, with a leadership
structure that supports its major strategic objectives .

Having
 its own president or vice president makes it more
likely the division will receive the resources it needs from
the company.

Also,
 a division's focus allows it to build a common culture
that contributes both to higher morale and a better
knowledge of the division's portfolio. This is far preferable
to having its product or service dispersed among multiple
departments through the organization .
Disadvantages:
1) Conflicts between Divisional Heads:
Every divisional head wants to establish his
supremacy. To satisfy ego each demands maximum
resources for his division. This situation leads to conflicts
among the various divisional heads.
(2) Duplicity of Functions:
The entire set of functions (e.g., production,
marketing, financial, personnel, etc.) is required for all
divisions. It gives rise to duplicity of efforts among
divisions. Hence, resources are misused and cost of
operations is unnecessarily increased.
(3) Selfish Attitude:
Every division tries to display better performance
sometimes even at the cost of other divisions. This shows
their selfish attitude. Consequently, it hits the interest of
the concern as a whole.
 Environmental Analysis (SWOT
Strengt
analysis) Weaknesses
h loyalty & reputation
 Brand  Poor acquisitions and investments
 Easy to use software  Dependence on hardware makers
 Tie-ups with hardware industry  PC markets have matured
 Robust financial performance  Slow to innovate
 Acquisition of Skype

Opportunities Threats

• Cloud based services • Intense competition

• Mobile advertising • Changing consumer behavior
• Mobile device industry • Open source projects
• Growth through acquisitions • Potential lawsuits
 Strengths
Brand loyalty & reputation: Over the years,
Microsoft has been the leading OS and software
provider, which resulted in more than 90% market share
for PC OS. Microsoft’s brand is the 5th most valuable
brand in the world, valued at $ 57.8 billion. Brand
reputation leads to higher sales and greater market
share.
Tie ups with Hardware manufacturers: The
company works with all the major computer hardware
producers like Dell and Samsung and major computer
retailers to make sure computers would be sold with
already pre-installed Windows software. The company
also invested in Dell and Nokia to tighten its
relationships with these companies.
Easy to use software: Microsoft products like
Windows operating system are popular among the
masses because of great quality and many decades of
experience that Microsoft has put into its development.

Strong Financial surplus: Microsoft holds more

than $63 billion of cash and cash equivalents that can
be used for acquisitions and substantial investments
into R&D.

Acquisition of Skype. With nearly 300 million users,

Skype is a significant boost to Microsoft’s online
presence and have a lot of potential in generating
income from online advertising.
 Weaknesses
Bad Investment Decisions . Many of Microsoft’s
acquisitions were not successful. Link Exchange, WebTV,
Danger are just few examples of multimillion acquisitions
made by Microsoft but soon shut down or divested.
Dependence on hardware manufacturers . Microsoft
is a giant software corporation but it does not produce its
own hardware and depends on computer hardware
manufacturers to develop products that run Windows OS. If
cheap and popular alternative OS would appear, hardware
manufacturers may simply choose the alternative and
Microsoft could do little to change the situation.
PC market has matured . Only recently has Microsoft
entered the mobile technology sector and still heavily
depends on its OS and software sales for standalone and
laptop computers. The market for these products has
matured and Microsoft will find it harder to grow revenues in
these sectors.
Slow in Innovation: Microsoft has huge R&D
resources and great position to enter new markets with
innovative products but constantly failed to do so. It had
an opportunity to be the first player in online
advertising but missed the opportunity. Its entrance to
mobile OS was also too late, while Google and Apple
captured the market share.
 Opportunities
Cloud based services: Microsoft could expand its
range of cloud services and software as the demand for
cloud-based services is expanding.
Mobile advertising: Mobile advertising markets are
expected to grow in double digits over the next few
years and Microsoft has a great opportunity to tap into
these markets with its mobile OS.
Mobile device industry : Smartphones and tablets
markets will grow steadily over the next few years and
Microsoft could exploit this opportunity by introducing
more of its own tablets and a new company phone.
Growth through acquisitions : With a huge reserve
of cash Microsoft could start acquiring new startups that
would bring new technology, skills and competences to
the business.
 Threats
Intense competition in software products:
Microsoft is more than ever has the pressure to introduce
successful OS both in PC and mobile markets as such
competitors like Google and Apple have already
established positions.
Changing consumer habits: Customers shift from
buying laptops and standalone PCs to buying smart
phones and tablets, the markets, where Microsoft has
only a modest market share and may never establish
itself.
Open source projects : Many new open source
projects are coming to the market and some of them
became quite successful, such as new Linux OS and
Open Source Office. Open source projects are free and so
they can become an alternative to expensive Microsoft’s
products.
 Capabilities & Core
Competencies
Identifying a firm’s resources and capabilities, and
thus its core competencies, is a vital step to establishing
corporate strategy and to achieving profitability. Resources
and capabilities, in order to be strategically valuable, must
be superior to those of competitors. Resources include
assets specific to the firm and capabilities are the ability to
utilize these resources effectively
Tangible Resources
 Cash Reserves: Microsoft has approximately $67 billion in
cash reserves, giving them a large amount of financial
flexibility.
 Operating Revenue: Microsoft reports revenue in FY 2016
as $86 billion.
 Property and Equipment: Of Microsoft’s net physical
assets, almost half, is related to computer equipment
and software. Additional holdings include land and
buildings.

 Distribution Channels and Customers: Microsoft has

established distribution channels for its products,
including online vendors and retailers. Microsoft also
has an established customer base.

All of these tangible resources indicate that Microsoft

has significant borrowing capacity, resilience,
investment capacity and reserves.
Intangible Resources
Intangible resources include technology,
reputation and corporate culture. Microsoft’s
technological resources include its research capacity
and intellectual property portfolio.

 Research and Development: Microsoft employs

almost 2000 people purely dedicated to long-term
future focused research in lab facilities throughout the
world, and spent more than $13 billion in FY’16 for
these activities.

 Intellectual Property: Microsoft maintains a large

patent portfolio. Microsoft has 40,000 patents and many
other forms of intellectual property
 Human Resources
A company’s human resources can be measured
in terms of its employee’s qualifications, commitment.
Microsoft is able to attract and retain the best talent in
the information technology business. Their employees
are educated, dedicated and committed to their
company, and this loyal and intelligent employee base
is a very strong resource for Microsoft.

Capabilities
Microsoft has many capabilities that enable them
to use their resources effectively by being embedded in
company routines, including:
 Financial control
 Capacity for decision making
 Continuous improvements
 Brand management
 Ability to identify and respond to market trends and
adapt
 Engineering and technical know-how
 Research capability

Microsoft’s core capabilities allow the company to

dominate the market and to shape the direction of the
technological future.
 Enterprise Software
Alliances
In the enterprise software arena, Microsoft maintains
significant alliances with Dell, HP and IBM. Each provides co-
specialization benefits for both Microsoft and the partner.
HP: The HP and Microsoft global strategic alliance is one of
the longest standing alliances of its kind in the industry,
with more than 25 years of combined marketplace
leadership focused on helping customers and channel
partners around the world improve productivity through the
use of innovative technologies. HP and Microsoft are working
together and combining their respective strengths to
deliver innovative technologies to help advance businesses.
Together they take familiar platforms from mobile devices
and desktops to data centre and cloud - and build integrated
solutions; Microsoft won PartnerOne Alliance Partner of the
Year – Americas from HP in FY 2013
IBM: The alliance with IBM allows Microsoft enterprise
applications to run on IBM servers. For customers, the
benefit of the alliance is that all parts of your solution
hardware, software, and middleware will install quickly,
start up easily, and run reliably.
Dell: Additionally, Microsoft maintains an alliance with
Dell which is designed to help business reduce the
complexity and cost of deploying a server based
environment and to create a comprehensive and
integrated set of distributed computing services using
both Dell and Microsoft technologies.
Facebook: Under the strategic alliance, Microsoft is
the exclusive third-party advertising platform partner for
Facebook, and sells advertising for Facebook
internationally in addition to the United States.
 Microsoft Organizational Culture

The origins of Microsoft organizational culture

have been laid by founders Bill Gates and Paul Allen as
an innovative, but performance obsessed. From its
founding in 1972, the technology company became a
market leader in a range of segments because of its
corporate culture associated with efficiency and
creativity. However, this changed during Steve Ballmer
leadership era during 2000-2014 with negative
implications on company’s market share and stock
prices. After assuming the top job in 2014, rebooting
Microsoft organizational culture was one of the key tasks
for the new CEO Satya Nadella. Currently, the global
technology company is actively placing One Microsoft
concept at the core of its organizational culture. 
Microsoft organizational culture combines the following
three key features.
Microsoft Business Strategy and
Competitive Advantage

1) Cloud-first, mobile-first”. Intelligent cloud represents

one of the solid sources of Microsoft competitive advantage
and Microsoft business strategy places a great emphasis on
cloud segment of the business. The company aims to
achieve USD 20 billion in commercial cloud annualized
revenue run rate in fiscal year 2018.

2) Growing through mergers and acquisitions.

Mergers and acquisitions play an important role in Microsoft
business strategy and the multinational technology company
engages in mergers and acquisitions to increase its
capabilities, product range and value offering. The list of the
most notable recent acquisitions include Nokia Corporation’s
Devices and Services business for USD 9.4 billion in 2014.
 1.Openness. CEO Satya Nadella told in an interview
that anyone should be able to tell him anything and that’s
the culture they strive for. Moreover, industry analysts also
note that “since chief executive Satya Nadella was
appointed in February 2014, Microsoft has become a far
more open place”
2. Value for innovation. Under the leadership of
former CEO Steve Ballmer, the global technology company
was often criticized for the lack of innovations in its
product portfolio. Satya Nadella has announced his
commitment to change this perception by integrating the
values of innovation and creativity into Microsoft
organizational culture.
3. Diversity and inclusion. The company attempts
to promote the culture of diversity . Microsoft declares “we
strive to create an environment that helps Microsoft
capitalize on the diversity of our people and the inclusion
of ideas and solutions to meet the needs of our
increasingly global and diverse customer base”
Microsofts Corporate Social
Responsibility
“Our customers and society expect us to
maximize the value of technology while also
preserving the values that are timeless.
Microsoft’s commitments to corporate
citizenship help us meet these expectations.“

-Satya Nadella
Future Recommendations
Microsoft has been a technology industry leader and has
strong capabilities and resources to make anything possible. We
recommend it to make improvements in the following areas:

 Product Innovation and Invention

Microsoft has been the industry leader because of the
constant research and innovation and the wide range of products
and services it provides. Trend suggests that in house developed
products have been Microsoft’s strength: Windows OS, Office
Suite, Windows Server, etc. Instead of focusing on acquiring new
companies it should invest more internally to come up with new
products.
 Reduce Poor Investments
Microsoft has been making too many blunders while acquiring
new companies. It should improve its investment research and try
to cut down on the rate of poor acquisitions. More often than not,
Microsoft has been bad at making the acquired companies
profitable. It should be more investigative before acquiring any
company in the future.
Strengthen Strategic alliances
One of the few ways to sustain the market dominance
and leadership is to make many strategic business alliances in
the industry. This has been Microsoft’s strength since its
existence and it should try to keep the existing partners while
trying to find new partners for competing in the industry.
Cut down unprofitable Products
For example Bing search engine. Despite having 18.1%
of market share, it has been a bleeding investment for
Microsoft for many years. It should decide the strategy for
such products, and possibly cut down on loss generating
services.
Microsoft Research Division
Microsoft has been spending huge amounts of money on
general computer science research, which might be good for
the future but doesn’t lead to any significant returns in the
short term. It’s necessary to be more efficient while investing
in research like it’s competitors such as Google and Apple.