Develop a Strategic Plan of a Company

Strategic Management Assessment

Main Task- Develop a Strategic Plan of a Company

 

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Define a full strategic plan for your firm (Microsoft) including all the areas outlined below :

 

  1. Strategic Options
    1. Business Level Strategies
  2. Corporate level strategy
    1. Internationalization strategy
  3. Proposed organizational Structure
  4. Recommendations and implementation
    1. Approach to strategic control
    2. Recommendations to the firm

Other Details :

Font size 12 Double-Spaced

Number of words min 1900- Max 2200

All referencing and citations require Harvard referencing style

 

Sample Answer

 

Strategic Plan for Microsoft

A strategic plan is a document that describes an organization’s current status, what the organization wants to achieve, and the actions and strategies that will enable the attainment of those goals. The paper outlines the strategic plan for Microsoft Corporation.

Company Overview

Microsoft Corporation is a multinational technology company based in the US. The headquarters of the company are in Redmond, Washington State. Microsoft was established in 1975 by Bill Gates and Paul Allen. Over the years, the company has grown to become one of the biggest technology companies in the world by revenues and market capitalization. The company is the world’s leading developer of computer software. In 2021, Microsoft reported revenues of $168 billion and an operating income of $70 billion (Nadella, 2022). Some of the devices and software products developed by Microsoft include the Surface laptops and tablets, Microsoft Office, Windows, Xbox gaming consoles, and computer accessories. Some of the services offered by Microsoft include cloud computing, social networking, software and application development, video gaming, and internet services.

Microsoft: Mission Statement

The stated mission of Microsoft is to empower every person and every organization to achieve more (Microsoft, 2021).

Microsoft: Vision Statement

The vision of Microsoft is to help people and businesses around the globe to realize their full potential by creating technologies that change how people work, play, and communicate (Microsoft, 2021).

 

Microsoft: Core Values

Five values form the core foundation of the operations and behavior of the organization. The first core value of Microsoft is innovation. Innovation drives the product development activities at the company. Secondly, the organization promotes diversity and inclusion across its operations (Microsoft, 2022). Thirdly, the corporate social responsibility, whereby the company aims to become a force for good for communities and the planet. The next is trustworthy computing, in which the organization hopes to deliver reliable and secure computing experiences. Finally, the organization taps into artificial intelligence to extend human capabilities.

SWOT Analysis of Microsoft

The SWOT analysis examines the internal strengths and weaknesses of Microsoft and the external opportunities and weaknesses.

Strengths

Microsoft is reputed as a leading developer of software with popular and widely used programs such as Windows and Microsoft Office. Consumers globally are trustful of the products and services offered by Microsoft. Secondly, the company has established itself as a leading technology company worldwide, becoming the second most valuable company globally with a market capitalization of over $2.4 trillion (Subin, 2021). Thirdly, Microsoft has a broad market reach with a distribution network that allows the company to offer its products and services in over 190 countries. With annual revenues of $168 billion in 2021, the company is in a strong financial position.

Weaknesses

The first identified weakness is that Microsoft has a low market share in the internet browser segment with the underperforming Edge and Internet Explorer browsers. Secondly, Microsoft’s search engine, Bing, has fewer daily users. Some of the acquisitions of Microsoft, such as Skype, Nokia, Danger, and Navision, have flopped and caused heavy financial losses for the company (Olinga, 2022). Finally, Microsoft has failed to establish dominance in the computer hardware segment.

Opportunities

Microsoft has opportunities for diversification by venturing into new market segments. For instance, the company can tap into artificial intelligence to develop new services and technology solutions (Stahl, 2021). As one of the biggest companies in the world, Microsoft has opportunities for acquisitions and partnerships to allow the company to gain a foothold in critical technology segments such as internet browsers. The company has an opportunity to exploit its competencies to offer reliable cybersecurity services.

Threats

Firstly, Microsoft faces intense competition from established companies and new entrants in the software development sector. Secondly, changing consumer needs and preferences threaten the company’s market dominance. Furthermore, the growth of the open-source movement is an existential threat to Microsoft’s software division.

Strategic Options

The strategic options of Microsoft are a direct response to the external factors impacting the company. The first strategic option for Microsoft is to pursue growth. The growth strategy will allow to capitalize on market opportunities and overcome challenges to achieve expansion. Under the growth strategy, the goal of Microsoft is to increase its market share in the highly competitive technology sector (Braun et al., 2019). The increase in market share should translate to higher revenues and wider profit margins. The second strategic option that Microsoft can pursue is diversification. The company can implement a diversification strategy to allow the company to widen its product portfolio in the highly dynamic business environment in the technology sector (Sekerli and Akcetin, 2018). A diversification strategy will allow Microsoft to tap into new and growing consumer segments.

  1. Business Level Strategy

The recommended business-level strategy for Microsoft is a differentiation strategy. Under the differentiation strategy, the goal of the business is to offer products and services that are significantly different from those offered by competitors in the same industry. Currently, Microsoft operates in the highly competitive technology sector. As such, Microsoft needs to offer products and services unique and inimitable by other companies in the sector. In this sense, Microsoft will create products that offer unique benefits and features to consumers (Kopp, 2021). The products and services offered by Microsoft have to meet high-quality standards to attract customers. The differentiation strategy will require Microsoft to make significant research and product development investments. The differentiation strategy will enable Microsoft to grow its market share and increase revenues in the long term. Increased revenues will translate to better profit margins. The differential strategy will allow Microsoft to overcome the threat posed by price competition in the technology sector. Moreover, the differential strategy will reinforce customer loyalty.

  1. Corporate Level Strategy

On the corporate level, Microsoft should pursue an expansion strategy. Expansion is a strategic approach whereby a business seeks to achieve higher growth levels to allow the company to widen profit margins and grow the market share. Under the expansion strategy, Microsoft will aim to expand the scope of its operations to widen the reach of the business. The first approach for Microsoft under the expansion strategy is to enter new markets. Microsoft will grow its market share and widen its customer base by penetrating new markets by ensuring that its products are available to a higher number of consumers. Another aspect of Microsoft’s expansion strategy is diversification. The company will seek to introduce new products and services to the market (Feriors, 2022). Diversification will allow Microsoft to tap into more consumer segments outside its target market. An expansion strategy will allow Microsoft to grow its market share and reinforce its market position as a leader in the technology sector. Through a successful expansion strategy, Microsoft will have the opportunity to exploit the economies of scale.

  1. Internationalization Strategy

Microsoft should pursue a global strategy in the international markets. Under the global strategy, Microsoft will utilize an integrated approach across all international markets with minor variations in the attributes of the products offered in the markets. For instance, Microsoft will offer software products across the international markets with small changes to attributes such as language to meet the needs and preferences of the target market in the foreign markets (Edwards, 2016). In this way, Microsoft will reduce the costs of modifying the products to meet unique consumer demands in the various international markets. The global strategy is appropriate for Microsoft since customers across the globe can use technology products and services with minimal need for variations. For instance, Microsoft’s Windows operating system is used around the globe with minimal differences in features.

Proposed Organizational Structure

The proposed organizational structure for Microsoft is a divisional organizational structure. Specifically, Microsoft should implement a divisional, product-type organizational structure. A divisional, product-type organizational structure is one where the company is organized into divisions based on groupings of products and services offered by the business (Gillikins, 2019). The divisional, product-type organizational structure is appropriate for Microsoft because the company has five unique product lines focusing on hardware products, software products, gaming, social media networking, and internet services. At the top of the organizational structure, the head of the company is the CEO, who will be the top decision-maker. Each of the five divisions of Microsoft will have a vice president who will oversee their division and report directly to the CEO. The divisions will comprise mid-level managers and low-level managers who oversee specific activities and operations.

The divisional, product-type organizational structure will ensure that each division will focus on creating the best products and offering high-quality services to support Microsoft’s differentiation strategy (Gillikin, 2019). Since Microsoft is a large multinational corporation, the divisional structure will streamline operations management in each division to improve overall organizational performance. The divisional organizational structure will offer Microsoft greater adaptability in the volatile technology industry since each division will have the greater flexibility to change its approach. Furthermore, a divisional, product-type organizational structure will increase internal competition between divisions, contributing to improved efficiency and organizational performance.

Recommendations and Implementation

  1. Approach to Strategic Control

Strategic control ensures that Microsoft effectively implements the strategic plan to achieve the stated strategic goals. The main strategic control process for Microsoft is implementation control. The main activities are tracking, monitoring, and evaluation within this approach. Tracking and monitoring will be applied to check the progress of the implementation of the strategic plan. The goal of tracking and monitoring activities is to observe the implementation process step-by-step to ensure that the strategies are implemented as outlined in the plan (Goggin, 2021). Any deviations from the plan during implementation are identified and addressed. The implementation control encompasses evaluation activities that will examine whether Microsoft meets the targets and goals outlined in the strategic plan. The evaluations will offer the leadership of Microsoft the opportunity to make substantive changes to ensure the organization meets its strategic goals.

  1. Recommendations to the Firm

The first recommendation is that Microsoft should make significant resource investments to facilitate the implementation of the strategic plan. For instance, Microsoft should direct funds towards research and development to allow the organization to develop unique products and services to enable the differentiation strategy. Secondly, Microsoft will need to do extensive market research in the international markets to support the global strategy. Market research will limit risks and drive market penetration. Finally, diversification should be driven by understanding changing consumer habits and preferences. Microsoft should be attuned to the rapidly changing external business environment.

 

 

References

Braun, M., Latham, S. and Cannatelli, B., 2019. Strategy and business models: why winning companies need both. Journal of Business Strategy.

Edwards, J., 2016. Mastering strategic management. OpenEd. Available at: https://opentextbc.ca/strategicmanagement/chapter/types-of-international-strategies/ [Accessed May 2, 2022].

Feriors. 2022. What is expansion strategy? Available at: https://feriors.com/expansion-strategy/ [Accessed May 2, 2022].

Gillikin, J. 2019. Advantages & Disadvantages of Divisional Organizational Structure. Houston Chronicle. Available at: https://smallbusiness.chron.com/advantages-disadvantages-divisional-organizational-structure-611.html [Accessed May 2, 2022].

Goggin, M., 2021. Strategic control: Breaking down the process & techniques. ClearPoint Strategy. Available at: https://www.clearpointstrategy.com/strategic-control-process/ [Accessed May 2, 2022].

Kopp, C. 2021. Product differentiation. Investopedia. Available at: https://www.investopedia.com/terms/p/product_differentiation.asp [Accessed May 2, 2022].

Microsoft, 2021. About Microsoft – Mission and Vision. Available at: https://www.microsoft.com/en-us/about [Accessed May 2, 2022].

Nadella, S. 2021. Annual report 2021. Microsoft. Available at: https://www.microsoft.com/investor/reports/ar21/index.html [Accessed May 2, 2022].

Olinga, L. 2022. Microsoft’s top-10 multibillion-dollar acquisitions. The Street. Available at: https://www.thestreet.com/technology/microsofts-top-10-billion-dollars-acquisitions [Accessed May 2, 2022].

Sekerli, E.B. and Akcetin, E., 2018. Diversification Strategy in Internet Industry: Case of Google Inc. AKUSBD20(3), pp.271-289.

Stahl, A. 2021. How AI Will Impact The Future Of Work And Life. Forbes. Available at: https://www.forbes.com/sites/ashleystahl/2021/03/10/how-ai-will-impact-the-future-of-work-and-life/?sh=eb3a07579a30 [Accessed May 2, 2022].

Subin, S. 2021. Microsoft passes Apple to become the world’s most valuable company. CNBC. Available at: https://www.cnbc.com/2021/10/29/microsoft-passes-apple-to-become-the-worlds-most-valuable-company-.html [Accessed May 2, 2022].

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