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
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
