Product Element Analysis
This business report will highlight the market expansion of the Microsoft in the nations, where they are not present. Microsoft has their merchandise in European countries like United States, Denmark, Czech Republic and Georgia. The company is famous for their software solutions and consumer electronics. Microsoft Windows, Microsoft Office suite, Edge web browsers and Internet Explorer are some of their best software solutions (Casillas and Moreno-Menéndez 2014). In addition to that, they also have some flagship hardware like- Microsoft Surface and Xbox video game consoles (Forsgren 2015). The concerned organization is the largest software maker across the world in 2016 (Welch and Paavilainen?Mäntymäki 2014). Another aspect is that Microsoft has three different business segments- Productivity and Business Processes, Intelligent Cloud and Personal Computing (Kalinic et al. 2014).
In this business report the details about analysis of the product element, price element, place element and promotional element will be described. In addition to that, details of some main IP theories and their best application for Microsoft will be discussed followed by the evaluation of the advantages and disadvantages of the selected IP theories. The theories that will be addressed in this business report will be the Uppsala model and industrial network approach.
Standardization and/or adaptation of the product element
Microsoft is best known for their provision of software solutions, however in order to incorporate the diversification in the business, they are formulating new products. In recent times, the products are devices, mobile applications, computer software, games and entertainment media (Casillas and Acedo 2013). The device section comprises of personal computers, Xbox, Mobile phones and tablets. These devices are also supported with Microsoft’s operating system like Microsoft Office and Windows OS (Casillas and Acedo 2013). Some of the population applications of Microsoft are Microsoft Remote Desktop and Drawboard PDF. Conconi et al. (2016) also stated that they also have some gaming software solutions like Xbox games and other gaming software that can run on any platform especially Microsoft’s platform. They have targeted all the demographics through their entertainment media like selling songs and movies through their internet website.
Clarke and Liesch (2017) stated that the lace element refers to the place from where products and services from Microsoft can be obtained. The places from where their products can be attained are from Microsoft Stores, authorized sellers and from their official online websites (Meyer and Thaijongrak 2013). They have placed their stores in such places, where it is easy to target customer and is also easy to reach. Users can also get products like Smartphone and Xbox units from their retail stores. Moreover, in recent times, people spent more time in internet and intends to attain products through online services. Microsoft’s online service offer them purchasing or downloading the software products and has become a major avenue for the company’s revenues.
Place Element Analysis
Standardization and/or adaptation of the Promotional element
The approaches that Microsoft is using for making their customer aware of their products are through advertisement, sales promotions, public relations, direct marketing and personal selling. They have taken every possible step so that their initiative regarding new products introduction and offers are directly conveyed to their end-users. They promote their brand by giving incentives and huge discounts for attracting special customers like they have provided their products on special discount for military personnel and veterans. Hadjikhani et al. (2014) also state that they also make direct promotion through academic institutions and they select potential customers for Microsoft store sales. They also promote their brand through philanthropic activities like donating their products and computer system to non-profit organizations (Knight and Liesch 2016). Moreover their website is also associated with social media sites like Facebook, Twitetr, Google+ and Instagram.
Standardization and/or adaptation of the Pricing element
The pricing strategy use by Microsoft is market-oriented pricing strategy, Buy Only What You Use pricing strategy and Freemium pricing strategy. Cavusgil and Knight (2015) stated that in their market-oriented pricing strategy, they analyses the competitor’s pricing values, market factors. Moreover, the “Buy Only What You Use pricing strategy” where they charge money to users based on how much the customer actually uses. Lastly, for Freemium pricing strategy they have offer product for free like Office 365 cloud productivity suite where users can use Office 365 free of charge.
Thus, it can be concluded that the Microsoft produces software solutions along with devices that can support their solution. The formulation of gadgets is to compete with mobile companies, who only manufacture the device and not software supported. Their pricing strategy also effective for attracting all kind of customers and their promotional strategy is also effective fir letting the customer know what new things they are going to launch in future.
Concept of internationalization
International process theory mainly aims for business expansion or making the brand’s produ8cts and service reachable to all the customers. The development of the products and the services are based on the market demands and the organization should have to evaluate the recent trends. Madsen (2013) also stated that the process of identification of these trends across the world is known as internationalization. The process of internationalization for Microsoft is indicated in terms of innovation. Sasi et al. (2015) criticizes that Microsoft is presently operating in more than 230 countries but they lack innovation. There are regularly updating their software solution but customers rarely find any major differences in the previous and updated version.
Promotional Element Analysis
Born global theory
Born global theory emphasized on three conditions- sustaining the degree of products’ specialization to increase the niche markets, the technological developments in the areas of production, communication and transportation and lastly, the capabilities of people. Hennart (2014) also stated that Microsoft may have large market but personal aspiration to activate the same in the international market is not present. The process that can be adapted by Microsoft for utilizing the born global model is as follows:
Division of the internal stakeholders: Microsoft can divide their organization into three major teams- People with international approach right from inception like Nokia for producing the mobile devices, people, who acquired international customers but started domestically so that Microsoft can target local customers through their preferred brands. Last group is the internal staffs who are liable to conduct a further step in the internationalization process.
Identification of important objectives: Microsoft can develop strategies for improving their cultural differences, regulations and policies, geographical distances and also work for improving their networks. These networks comprises of personal and public network and company stakeholders and suppliers relations.
Analyzing the required resources- The staffs of Microsoft should state different resources like knowledge in the staffs, training system for the staffs so that they can implement new technology
Evaluating the proper usage of the resources and change ownership- The management should also evaluate whether to not all the allocated resources are properly utilized and desired results are obtained. These resources can be from other nation for developing the devices that Microsoft is planning to formulate for automation process. Microsoft can also focus on their Management buyout, merger and acquisition process so that they can make their expansion easily.
Assessing client followership- Microsoft can also assess the response that their customer is providing back to them. This method is closely related to follow the domestic customer in new market. Moreover, Microsoft can also clients, who are already operating internationally and intends to enter into local markets. In this way effective partnership can be raised and Microsoft can automatically obtain international business
- Microsoft can form a task oriented way to initiate their process of internationalization.
- This model can also focuses on the resources through which the objectives can be reached; so, Microsoft can evaluate the process of resource allocation very easily.
- This model evaluates every aspect of the business development that may make the entire business process complex for Microsoft.
The main concept of this model is to development of nationally and then promotes the developed products or services globally. Forsgren (2015) stated that through this model. An organization can reach to distant customers. The strategy that can be followed by Microsoft is as follows:
- First step: Microsoft should first analyze the market that is what customer’s desire and in which products they need improvement. So, this process should start with customer survey, feedback form after a Microsoft’s products or service purchase and market research.
- Second Step: Change current activities are the main aspect in this stage. Thus, after getting the feedback that they lack innovation Microsoft can research on latest technological demand that customers prefer. There are number of innovative ideas that Microsoft can formulate like development of mobile device that is solely own by their company, development of automated technology for automation industry and factories.
- Third Step: Developing commitment decision is the main focus point in this phase. Problems and opportunities of a market are perceived by the organization and then suggestions are asked from internal stakeholders so that optimized yet effective production can be attained. In case of Microsoft, theey can communicate with their staffs present at every locations so that techhnolog based on the respective idea can be developed. Thus, same products with different specifications will help them to grow in those places that furthermore enhance their brand image.
- Fourth Step: The third step is to change the strategies for future improvements. Microsoft should analyze what automation technology they can develop. Projects on automobile automations, Smart Building Project using PIR, IoT Home Security Model, Smart e-Health Gateway, Automatic Smart Parking System using IoT and IoT based Biometrics system. In this way they can diversify their software solutions and can attain more profitability.
- Fifth Step: Implementation of the projects and then maintain it for future implementation. This can be done through beta testing of the developed software solution along with removal of bugs from software. Lastly, Microsoft should take feedback from the customers and their clients whether or not future improvement is required.
- This mode closely define all the aspect of a process implementations for internationalization like to take customer survey for identification of technology, the discussion on required automation technology and development of technological devices along with software technology and support from internal stakeholders.
- This model is appropriate for large as well as small size enterprises and it defines all the necessary steps for initiating the process of internationalization
- The process is low as customer feedback is taken in the initial period and also in the completion period so that best products can be given to customer. However, this process is long when technology is regularly changing.
- The budget plan may get fluctuate as amount of rework for the project cannot be estimated initially and the sudden arise in budget allocation may hamper the overall annual profitability.
Thus, it can be said that in order to establish their business, Microsoft can use both of the born global model and Uppsala model. The prime benefit that the company can get is evaluation of the entire system as well as internal project development for internationalization. In former model, the main focus is in the resources allocation and development of the strategic partnership. This will help them to positioning their market effectively.
Pricing Element Analysis
Geographic positioning- Though they have a global marketplace but they can also target the local shops by collaborating them and providing them high incentive to sell their products, On the other hand they can also collaborate some other international market and help them to acquire the local position. Thus, they can sell their products in urban as well as rural markets.
Demographic positioning- the products is through famous among students and officials, Microsoft can offer their products to academic institutions and new offices so that they can promote their brand through their product.
Product diversification- Microsoft in present times producing software solutions mainly and collaborates with other organization for manufacturing hardware products. However, it can be found from the report that they can use the Uppsala model so that they can develop new software solutions so that they can develop range of hardware solutions like- home security devices, health security devices.
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