Business-Level and Corporate-Level Strategies: Microsoft Corporation

Business-Level and Corporate-Level Strategies: Microsoft Corporation
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Analysis of the business-level strategies for Microsoft and the strategy I think is most important to its long-term success
A business-level strategy gives a company a specific form of a competitive position or advantage in relation to its rivals which result in above-average profitability CITATION Cha121 \l 1033 (Hill & Jones, 2012). There are two main business-level strategies; Cost leadership and product differentiation. Cost leadership approach is when the company chooses and adopts the strategies that enable it to lower its cost structure and price its products and services below its competitors. Product differentiation is when a company adds unique features or services that command a higher selling price CITATION Jea15 \l 1033 (Jean-Vasile, 2015).
Microsoft has been a market leader in various technological products since it was incepted. Its business-level strategy is product differentiation. Microsoft products might not be least expensive in the respective markets they operate in i.e. there is a lot of freeware for each software equivalent. i.e., in PC operating system and server systems, there is Ubuntu and other Linux based operating systems. For Microsoft Office productivity suite, there is libre office and Google office online applications. For the cloud, many other companies offer their users cloud services for free i.e Google offers up to 17GB for free for online cloud storage. Therefore, Microsoft cannot use cost as a business level strategy. It can, however, use product differentiation. Through many years of R&D, Microsoft has rolled out many features and improved the utility of its products. It has become the industry leader in product differentiation and many other tech companies have been emulating the products designed by Microsoft. Thus, Microsoft can leverage product differentiation to gain a competitive advantage.
Satya Nadella, the new and incumbent Microsoft chief executive has been focusing on this strategy to gain a competitive advantage over Microsoft competitors. He has been vertically integrating the products to contain their users in the Microsoft ecosystem. Nadella has been quoted saying his primary goal is to “propel the Windows ecosystem forward” and “drive Windows as a service across devices of all types” to increase hardware sales CITATION Aar18 \l 1033 (Pressman, 2018). By ensuring that Microsoft becomes a one-stop-shop for all technological needs for its users, it will choke out its competitors as Microsoft products will be integrating better than when they are integrated with other products.
I think this strategy adopted by Nadella is good and it will guarantee long term success of the Microsoft. It is the very reason why Microsoft has been gaining a substantial share of the cloud computing industry despite being a late entrant. The company offers more than cloud computing because its products integrate seamlessly with the cloud system and hence users are contained in the Microsoft ecosystem. At the moment, the company offers office 365 bundled with 1tb online cloud storage and the user can always save his/her files directly to the cloud from Office 365. It offers better convenience when the user is using Microsoft operating system (preferably Windows 10), Microsoft office suite (cloud-based office 365) and Microsoft storage as a service OneDrive. Thus, in the long term, for users to avoid unnecessary inconveniences of working with three different software and service vendors, they choose to remain in Microsoft ecosystem which has more than the afore-noted products. This business strategy will guarantee a competitive advantage in the long term to Microsoft as more users will continue to be locked into their ecosystem.
Analysis of the corporate-level strategies for Microsoft and the strategy I think is most important to its long-term success of the firm.
Corporate level strategies attempt to answer the question; what set of businesses should we be in CITATION Oli10 \l 1033 (Furrer, 2010)? Therefore, it details the long-term approach of the management which dictates the necessary steps to steer the company in that direction.
Corporate level strategy under Nadella’s leadership seems to be focused on taking advantage of the newest trends in the technological sector. One of the most lucrative and potentially long-term technological approaches that Microsoft has been taking advantage of is cloud computing. Microsoft was a late entrant to the cloud computing industry and Amazon had already gobbled up a significant share of the industry. However, under Nadella’s leadership, Microsoft has been aggressive in the industry and has exponentially been claiming bigger market share under their cloud computing service Microsoft azure. The corporate-level management of Microsoft needs to build it's software and other services focused on integrating with their cloud and designed for mobile utility. In an email by the company chief executive, Nadella laid out his ambition to empower every person and organization in the plan to do more. H...