Microsoft Analysis Paper Term Example | Topics and Well Written Essays - 1750 words

Microsoft Analysis - Term Paper Example The purpose of this paper is to analyze the operations of Microsoft using a variety of business analytic tools Mission, Vision, Stakeholders The mission statement of Microsoft Corporation is â€Å"Our mission and values are to help people and businesses throughout the world realize their full potential† (Microsoft, 2011). As a public company the firm’s actions must comply with the best interest of a variety of stakeholder groups. Some of the stakeholders that Microsoft must respond too are the shareholders, employees, board of directors, executive management team, suppliers, lenders, community, and the government. The company has tremendous aspirations and visions for the future. â€Å"At Microsoft, we believe the most engaging digital experiences will grow out of the combination of four things: smart devices, cloud-based services, natural forms of interaction between people and technology, and finally, people’s imaginations† (Microsoft, 2011). Five forces of Competition The threat of new entrants in the software industry is high. There are thousands of software companies in the marketplace. It is possible that one of these companies might be able to develop a new operating system to compete directly with Microsoft. In the gaming segment it seems as if the industry operates as an oligopoly with Sony and Nintendo being the only competitors. It takes billions of dollars and years of research to develop a new gaming console. The bargaining power of suppliers is low. Microsoft can take advantage of economies of scale to get better prices from suppliers. The bargaining power of buyers is medium low. Buyers are willing to pay the market price for software despite its relative high prices. The buyer power increases during certain seasons such as Christmas. The threat of substitute is medium. In terms of operating system I would classify the buyer power as low due to the lack of real substitute despite the existence of Linux and Mac computer s. In the gaming industry substitute are medium since there are only two competitors. The rivalry among firms competing in the industry is high. Due to the intense competition companies have to spend a lot of money on marketing. SWOT One of the strengths of Microsoft is its strong economic position and history of outstanding financial performance. The company’s equity is considered a blue chip stock. The company generated in 2011 sales of $69.94 billion. During the past five years the sales of the company have increased by 36.81%. The net income of the firm in 2011 was $23,150 billion. In comparison of the previous year the net income of the company increased by an outstanding margin of 23.40%. The market capitalization of Microsoft is $216.19 billion. The net margin of the firm in 2011 was 33%. The average net margin in the software industry is a mere 1.9% (Dun & Bradstreet, 2011). The net margin of Microsoft was 17.36 times higher than the industry average in 2010. The divi dend yield of the company was 3.10%. A second strength of Microsoft is the brand value of the company. Microsoft has the leader software industry largely due to the superior design of its operating systems programs. The current version of the Operating system Microsoft is selling is Windows 7. The customers of computers visualize Microsoft as the top brand in the industry. Due to the preference of customers for Windows product the majority of new computers come equipped with Microsoft operating systems. Another strength