Introduction: 

Microsoft corporation is one of the most renowned software company located in Redmond at Washington. Their flagship product known as the Windows Operating System is the only operating system that is so popular for the utilization of home desktops. They have other desktop products like Microsoft Office, Internet Explorer and also the Windows Media Player; these desktop products are either sold together with Windows already installed in the software on new systems of computer or are bundles directly with the respective Windows Operating system. In addition to all these, the company also is known to sell and manufacture computer hardware like mouse, keyboards; they have possession of interest in owning a number of content- distribution channels like that of MSN Internet portal or MSNBC and also the well -known Microsoft Encarta electronic Encyclopedia. As per their history, the Microsoft Windows operating system initiated their business as the optional addition to the operating system of MS- DOS. After this the idea of GUI or Graphic User Interface became interesting enough to be established by Apple II by Apple Computers and also Macintosh. However, it must be noted that due to their prior work with International Business Machines or IBM that they were able to successfully able to convince them so that they would ship Microsoft Windows to be preinstalled in the personal computers of IBM. This is the strategy that helped Microsoft to gain the worldwide fame that they have now and they still hold the position of the most recognized software in the history.

The suit if applications in Microsoft Office like MS Word, or MS Excel, MS Power point and Access, initially began their journey as the Microsoft works, an application of Apple Macintosh which gave the functions of a spreadsheet, a word processor and also a database, so in short they provided everything in one package. Even the most popular web browser of Microsoft- the Internet Explorer is actually a rebranded version Spyglass Mosaic. The products of Microsoft have been known to face the challenges of security in their initial stage of business that had plagued the security so much that it led to the establishment of an entire malicious software industry in the current day. Even though all of the major names of the Operating systems and the computer programs have been known to attack each other subjectively at one point of time or other, yet the latency of Microsoft at resolving issues has somehow created a tarnish in the image of the company’s name. Over the years, the company has faced a lot of challenges that required them to think on their feet and come up with strategies that would help them to overcome that challenge and go back to a normal business execution. Data breaches and security lapses are a consistent occurrence for companies at this industry and this paper would address such challenges that Microsoft faced and what strategies they had implemented to avoid a negative publicity or should have taken to resolve that challenge in such a way that they would acquire positive outcomes.

Articulation of Strategic Analysis: 

The action of strategic analysis is one of the most important process which refers to the method of conducting a research on an organization and also their operating environment in order to come up with a strategy. The definition of this strategic analysis might be different from an academic perspective and the perspective of business, but the process does involve some common factors like identification and evaluation of the data that are closely relevant to the strategy of the company. Next, it defines the external and the internal environment of the company which is then analyzed. It also includes the utilization of several analytic tools like that of Porter’s five forces or SWOT analysis to confirm the implementation of the strategy would provide success.

Strategic Challenge faced by Microsoft:

In 2009 Julie Bort stated that Microsoft that struggles with innovation which is an observation that has been backed up by several scholars over the time. there are several reasons that were pointed by critics and tech scholars and they have also admitted that Microsoft has the ability to be innovative. The Exchange 2010 had their own hybrid approach to cloud computing, with this the users were able to keep up some e-mail accounts on the premises while they sent others to the cloud. This was an instance of a good balance between the act of maintaining the needs of the customers in an e- mail while they gently led them to the g=future of cloud email that was the future generation. This approach of Exchange’ hybrid nature, is the exception; unfortunately, Microsoft, in an overview struggles hard for bringing or accepting innovation. Julia Bort said: “Me-too thinking and an inability to partner for great technology are just two of the reasons why Microsoft struggles mightily with innovation.” (Bort 2009). Her observation was supported by the fact that Microsoft company spent billions of dollars on their Research and Development while they already have very interesting technologies in their labs. Still the company focuses highly on bringing a “me- too” ware to the customers and the market. After that they somehow separate their customers from things with which they are already satisfied. It has happened that Microsoft’s customers were initially happy with the original version of a product, but somehow for their “me- too” mentality, they have taken away that satisfactory product from their customers and instead provided them with another version that neither made their demands met not did they satisfied their customers. There is a list of such technologies that Microsoft lost for their “me- too” mentality- MP3 players, cloud- based Office applications, Webcams, video game consoles, Web development for multimedia, internet search and also advertising. The “me- too” mentality is referred to the unnecessary changes made by the company just because their competitors did the same thing with their customers. There is an argument regarding this list; Hyper -V can also be added into this “me- too” list but the fact is that this Hyper- V was actually a good hypervisor available at a great cost and had an opportunity of overturning the market position of the leading VMware.

Instead of this “me- too” mentality, Bort has mentioned that Microsoft should be should be solving for problems that others cannot keeping in mind that none of the other companies have that amount of knowledge as Microsoft about operating systems. They would have utilised that knowledge to come up with a concept like an entirely new operation system.

The next reason which was observed is that Microsoft has failed to research about their customers and their needs or buying decision; it is prominent that the customers of Microsoft do not like to accept change. The situation is such that “Microsoft is hamstrung by its own success.” (Bort 2009). It was evident from the research of Michael Surkan where he was known to spent months going out to reach the third parties which might have been affected by changes like the makers of firewalls; he stated that: “… with as many ISVs as Microsoft has, changes always tends to break something, somewhere, and Microsoft gets blamed, even if it did all it could to prevent such situations. Microsoft learned its lessons with the Windows 7 process of releasing many beta versions. But Windows 7 is basically an improved version of Vista. Application incompatibility will be kept to a minimum, but so, too, is innovation.” (Honeycutt, Tulloch and Northrup 2009). The company fails to realize that the enterprises demonstrate responsibility and they only stay with Microsoft because it is well- known by everyone that Microsoft knows technology. Too many changes by any company opens up the door for too many competitors; it is the enterprise that has to pay the prices and have to sign long- term contracts so that the demand that keeps on changing from Microsoft is kept to a minimal. There are some enterprises that were known to keep internet explorer 6 just because it had everything that they wanted. Microsoft is basically at a situation that shows that they are trapped by a certain scenario which proves that innovation is at an odd position adjacent to stability.

There was another observation made which showed that Microsoft faces a lot of challenge in terms of innovation; the observation showed that Microsoft had the inability to partner for great technology; Microsoft had created another mentality and stereotype that all of the technologies would have to be built by them in order to partner. This obviously, did not serve well for them. There was no need for creating their own hypervisor and they would have just bought VMware as they had that opportunity. Instead they spend approximately $1 billion for creating their own version, they built also built their own Xbox which was also not necessary at all. They would have sold adequate number if high- profit games different platforms of popular hardware. The main issue or challenge that Microsoft faces is that they run counter to where their competitors are going which might be a good thing to keep their competitors in check or have themselves updated about the market, but it does not mean that Microsoft would not even think about innovation and creatively come up with something of their own. It is not that Microsoft do not generate creative ideas; history showed that they have generated great ideas and created products that were a success, but sometimes their ideas are not able to take off- since the vision of Microsoft is out- of -sync with the rest of their technology and the direction in which the world is heading towards; it is very significant that every company is updated towards the direction of world if they desire to stand straight in the market position of the industry that they are in, or else there is a high possibility that they would be unaware of the needs of the customers tat changes with the direction in which the world moves and the organization faces the risk of shutting down. Michael Surkan has again rightfully noted: “Microsoft spent a lot of time implementing innovative uses of IPsec. In Microsoft products, you can create and manage IPsec tunnels, set policies and so on. A company with a Microsoft-centric network can, with relative ease, set up a network so that traffic is authenticated and encrypted and the edge firewall is all-but-unnecessary. Unfortunately, this didn’t fit with Cisco’s business plans. Microsoft’s IPsec encrypted traffic can’t be easily managed with traffic management tools. Microsoft has a feature in Windows Server 2008 R2 called DirectAccess that might be more of the same.” (Honeycutt, Tulloch and Northrup 2009). The concept was undeniably good as it acts like a VPN in between the server and the client, however, it needs Windows 7 to operate. Thus, the organizations who are not operating on R2/ W7 then, they would have to keep their VPN for a longer time.

Key Findings and Insight:

Microsoft has had its share of their own innovative work in the arenas of identity management and the cloud operating systems. However, the company is known to attach itself into typically such innovations that are “Microsoft- centric”. If any one of the innovative strategies of Microsoft has to be used by any customer, they have to use their technology like Windows or Net and more. Historical evidences have shown that they rely on the third- parties to sell their services or products and it might work well for Microsoft shop, but this creates a sense of self- fulfilling prophecy in them and it leads to the fact again that the customers are left to be unsatisfied with the change. What the company did was that they provided too many versions of a similar product and instead of making money the company zapped their resources completely dry. Each one of the features might have brought more than the previous one which, technically should lead to an innovation, but the reality is that one product team was made to be busy with multiple releases and that did not work well with the company.

SWOT Analysis of Microsoft:

The strategies that company selected by far did not work at all for the company. A strategy for this challenge faced by Microsoft is extremely necessary as for the impact that it imposes on the value proposition of the company. This strategy impacts the goals and future performance of Microsoft on their value proposition Framework. Hence, an analysis of the environment of the Microsoft corporation is necessary to state that strategic solution. The strength of Microsoft includes foremost the fact that it is a leading software company which is also an undisputed global leader in the market in the software technology precisely in the arena of cloud computing. They are the largest developer of the world for windows OS and in the year 2018 they generated an annual revenue of $23.2 billion. Secondly, they are the world’s largest organization with a market share that is dominant in nature (Warner 2019). They hold the position of 4^th in rank with the market value of over $750.6 billion in terms of being world’s largest companies in the year 2018 itself. They are also known to own the largest market share with 3% profit gain amongst the 5 largest cloud service providers including Google, IBM, Microsoft, AWS and Oracle (Warner 2019). The company is known to have vast market reach operating in more than 190 countries across the world. After the company launched Windows 10 and promoted their version of Windows, it was found that they have more than 700 million installs in the whole world. Apart from such strengths it also cannot be denied that the company sees constant growth in the cloud business as per their latest earnings and as per the scholars, it has been deduced that if the company maintains this growth, them there is a possibility that they will be worth $1 trillion in the near future. The most significant strength that Microsoft has is the loyalty of their customers which has created their brand image. More than 1.2 billion users use Office and more than 60 million customers use Office 365. The Interbrand has stated that Microsoft is the 4^th most reputed and valuable brand in the world with highest brand strength and equity in the digital industry with an extremely easy to use software which are user- friendly.

The strengths that this company has do not compensate the weakness that the company also possess and needs to work upon. The company has overexposure to the PC Market since their PC shipments are frequently known to fall due to the rising prices of the vendors and also all the currency fluctuations. There are the increasing cases of Cybercrime theft which have left the company to be in a vulnerable state. Reportedly, the hackers have attacked the cybersecurity of the company several times breaking the Windows Operating System. The third weakness is what this paper address which is the lack of innovation due to their “me- too” attitude and running courses to others. The company is reportedly known to fail in growing the sales of their hardware products like the pro computers and the phones. They are lagging in innovation whereas the competitors like Apple and Google are quickly following the trails of their respective innovation. Warner (2019) has also mentioned that the Microsoft is lacking in leading their market of Internet browser segment: “While Google, Safari, and Firefox have been gaining the market share in internet browser segment, Microsoft is losing the market. Microsoft IE & Edge didn’t even make a list in 2018’s most popular web browsers.” (Warner 2019). There have a lot of unsuccessful acquisitions like that of WebTV, Massive, LinkExchange and Danger with unprofitable investments.

The company has opportunities that they can grab to overcome their weaknesses and threats. They have opportunities in cloud business growth, in the artificial intelligence, smartphone industry and also their cost leadership strategy, if they are able to overcome their threats like the criticisms related to their workforce, their controversies in reference to the Gay community, the aggressive competition that is provided by Amazon, Google, Apple and more and Cybercrime and piracy (Warner 2019).

STRENGTHS	WEAKNESSES
Brand reputation.Leading in software industryVast reach in marketUniform growth.High customer realityHigh market capitalization	Overexposure in terms of Pc marketTheft through cybercrimeLack of innovation.Lack of leadership in Internet browser segment of marketFailure in acquisitions like WebTV and more.
OPPORTUNITIES	THREATS
Growth in cloud businessInnovation and AIAcquisitions and PartnershipsIn the industry of Smartphones or End user devicesCost leadership strategy.	Heavy criticism through workforceControversies in reference to homosexualityHuge competition from Google, Apple and Amazon.Change in preferences of customers.Piracy and Cybercrime attack.

Table 1: SWOT Analysis of Microsoft Corporation. (Source: Warner 2019)

Selection of One Strategic Option:

The above portions showed how different strategies taken by Microsoft to face their challenge of lack in innovation did not go as well as it should have been. This is the reason that after a proper analysis of the corporation, after highlighting the strengths, weakness, threats and opportunities, a proper strategy for overcoming this challenge can be brought up. The company can have an end- user device strategy as a means of innovation and extending their market (Neumann, Metoyer and Burnett 2009). It must be noted that there is already the existence of such devices like smartphones from Microsoft but that has not been going well. They have introduced mobile market through their own hardware and software requirement that the customers are not getting every feature that is shown by their competitors like Google or Apple (Thelwall 2018). Another weakness of Microsoft plays its impact on this strategy which is their lack of partnering. If Microsoft establishes proper partnerships, they will also be able to come up with end- user devices that would be equally appealing to the customers as the phones of their competitors, also, keep in mind that Microsoft already has a brand reputation, which is why introducing such devices and promoting would not be very difficult for the company (Thelwall 2018). An end user device is the technical term which refers to IT hardware that the people utilize during work, in their off- hours or also for leisure and any other purpose (Loebbecke et al. 2010). These devices matter as these are a very straightforward concept which nowadays are very appealing to the customers. Nowadays end- user devices are used for leisure purposes, in their off- hours and are well- known for their user -friendly models. Microsoft can target those segments of customers with a wide range of end- user devices. They have already provided smartphones as a part of this strategy but as the analysis, it was a no -win situation. The smartphones lacked varieties of features that their competitors provided and thus, eventually it led to a loss and more criticism from the users and the customers. When it comes to usage of end- user device for off- work and leisure, customer expect to have same source of entertainment and features that the competitors like Apple or Google and even Amazon is providing to their customers. Also, it must be noted that all of the competitors have launched multiple types of end- user devices for their customers. There are Fitbit, tablets, watches, notepads, Kindle by Amazon, and more of such devices. Microsoft has a huge opportunity of overcoming their innovation issue, if their stand up and partner up to bring in such end- user devices in the market instead of just phones which hardly qualify for smartphones (as compared to the latest features that phones are demonstrating). Fitbit seems to be a nice part of solution that Microsoft can also introduce in the market. However, for this, they have to give up their mentality of creating everything in Microsoft; it is high time that Microsoft partners up and leaves behind the “me- too” mentality if they want their innovative measures to succeed (Webber, Burnett and Morley 2012). Microsoft is a leading software company and with proper research and development they can easily overcome the issues that they face with their phones that were launched and at the present day which have stopped the sale in several countries. moreover, the company known that end- user devices have certain vulnerabilities. They can use innovation to device up something that would save their customers from such vulnerable situation. This strategy would modernize the business of Microsoft ad kick start to an extended business apart from the cloud computing business. This is the strategy which would ensure that Microsoft extends their customer base and customer base and always keep themselves updated with the preferences of their customers.  

Implications:

The company would have more than just the benefit of overcoming their issue of innovation if they adopt the end- user device strategy. The customers would be free of their sheer weight of desktops in the enterprise environment. There would be new applications at their fingertip and even better than what their competitors provided. It would strengthen the loyalty of their customers and also make the competitors customers switch their brand loyalty. There are chances that the company can come up with much secured environment for end- user devices that is currently a vulnerability for the devices. The devices are prone to be hacked easily and piracy breach can occur at any time; Microsoft has a strong knowledge about cloud computing and operating systems which indicates that the company would be able to come up with extensive security measures and thus, customers would be more comfortable to opt for end user devices by Microsoft rather than anyone else’s. At the present time, it has been implied that end- user devices have unpredictable availability and security is a huge issue. This poses both as a challenge and as an opportunity for the company. The organizations which are already utilizing the strategy of end- user devices are increasingly exposed to security threats and malware. Microsoft can easily create a multi- cloud support for their devices and that would reduce its exposure to security threats.

Also, it must be noted by the company that consumer buying decisions are dynamic in nature and they will always remain dynamic. Introducing a particular end- user device would not stop at increased loyalty and sales. Whenever, the customers would see that one of their competitors like Apple, Google or Amazon is providing another device or an existing device with some unique features, they would switch their preferences and leave Microsoft as it is. This is the reason that the company have to be alert all the time regarding the needs and requirements of their customers. They already spend a billion dollar in Research and Development (R&D) which they should use in figuring out the current demands and needs of their customers. It will help the company to be updated in terms of their customers and show them that they are constantly working for them to meet their demands. Such action can be shown through launching of different version of an end- user device, only the next version has features that was not there before. A simple technique to know about the consumer needs can be found through feedback systems; a through monitoring of the feedback would make the company aware of what they have missed or what their customers would like in that device. They can bring that feature into another version or even come up with other ideas of end- user devices that does not exist at all. The overall implication for Microsoft state some definite factors that the company has to overcome their self- created stereotypes like every hardware and software companies have to be created in their company or the fact that they would not create any partnership. Microsoft must understand that more partnership and relationships would help the company to come up with more innovative ideas and they can invest in them to create a stronger customer base. The company already has a brand image, they have trust of their customers and a reputation that is making them to still operate in the market; however, this paper brings forth the issue that Microsoft is facing which is the issue of innovation. What the company needs is to expand their market through more innovative techniques and more partnerships; they must learn from their previous failures and implement the lessons through innovation and creativity. When they observed that a product team becomes very busy in launching a same product for its different version that there is no room left for innovative ideas to grow, then they can create a position of creativity where people would have the sole job to come up with creative ideas that can be incorporated into their products or create a new product to be launched in the market, these people can also monitor the feedbacks and customer needs for keeping tab on their buying decisions so that the company can stay ahead of the market and from their competitors.

Conclusion:

Microsoft is a company which has its own strengths that has helped it to sustain a top position in the market even at the present day. They have a brand image, they have trust of their customers and a reputation that is making them to still operate in the market; however, this paper brings forth the issue that Microsoft is facing which is the issue of innovation. The company is facing a lot of challenges in terms of innovation and requires a strategy that would help them to overcome this situation and move forward with the business. Microsoft company has its weakness about innovation which brings everything in their value proposition framework at stake. As it happens the company’s mentality about “me- too” and the stereotype of developing their own products or platform running counter to their competitors is tearing away their customers more and more. They did not analyze their market properly even though they spend so much in their Research and Development, otherwise they would have noticed that their customers are not very enthusiastic about extreme changes. The competitors of Microsoft found a door open through Microsoft’s weakness and now they compete equally with the company. In order to stand firm in a top position at the market, they came up with the strategy of introducing end- user device; this strategy also proved to be futile seeing that those devices were not compatible enough to compete with their competitor’s end- user devices. The strategy that was chosen for the company is to utilize the end- user devices with increased security measures that is currently an issue for every end- user device. Microsoft has a string knowledge about cloud computing and they already possess the resources to reduce this issue of security for the end- user devices and introduce end- user devices through innovative which would be secured and safe and extend the business of the company. It would also help the company to overcome many other threats and weaknesses like unable to partner and form business relationships to have more profit in the market. Hence, the company can learn more from the strategy implementation and overcome their lack of innovation; yet they would have to keep themselves updated regarding the customer needs and preferences or else, there stays a high possibility of loss of customers since consumer buying decisions are extremely dynamic.

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