Summary QuestionExplain the economic characteristics of Microsoft by applying (a) Porter's FiveFor

Question


Explain the economic characteristics of Microsoft by applying (a) Porter's Five

Forces Framework, and (b) Economic Attributes Framework.




Explain the strategies of your assigned organization by applying the Framework

for Strategy

Analysis.




Answer & Explanation


1. Porter's Five Forces Framework:


(a). Threat of New Entrants (Barrier to Entry)


 Moderate Microsoft has high resources and a strong brand presence;

therefore, for new entrants, it is hard to compete with them. However, the

software industry is on its way to evolution, and innovation in products

can still let new companies enter the market.

, (b). Bargaining Power of Suppliers


 Low Microsoft has a diversified supplier base, and no single supplier

enjoys disproportionate bargaining power. The company is in a position

to negotiate prices and other terms with the suppliers.


(c). Bargaining Power of Buyers


 Moderate Microsoft's customers enjoy some bargaining power due to the

availability of alternate products, whether to individual consumers or

business enterprises—however, strong branding and product offerings by

Microsoft significantly limit the bargaining power of the buyers.


(d). Threat of Substitute Products or Services


 Medium Microsoft has a number of substitutes that can fulfill most of its

primary activities regarding operating systems, productivity software, and

cloud services. However, on all counts, Microsoft's relatively more

assertive position and constant innovation diminish the threat of

complementary products to a minimum.


(e). High Competitive Rivalry among Competitors