Microsoft engaged in extensive and unconventional marketing during its growth in the 1990s, primarily through its internet browser, Internet Explorer. The tactics were deeply involved with larger firms through frequent communication as well as large investments in advertising and conversations with computer magazines. The more notorious tactics included the inclusion of Internet Explorer for free with a number of Windows packages which automatically pushed competitors such as Netscape out of the market. Despite the backlash, this did cause Microsoft and Internet Explorer to possess the majority of the users and purchases of computer operational and internet browsing software. In later years, Microsoft took a more expansive approach to their marketing by broadening into other industries such as gaming by creating the Xbox. It was also the period during which competition with Apple began to rise as the other company began marketing campaigns directly opposing Microsoft. As such, Microsoft introduced marketing tactics that prioritized the highlights of Windows-based computers and worked to improve their image. In the 2010s, the company would also move to include user experiences and feedback in their ongoing marketing strategies as well for their frequently updated and newly introduced products.
Since the rise of Windows as a popular operating software for computers, Microsoft worked to expand into related markets and formulate new lines of products. Internet Explorer was the first natural expansion and had proved successful though the initial inclusion as a freed product did cause controversy and even lawsuits. Beyond that, Microsoft would make a substantial effort by introducing their own search engine, Bing. Bing did not enjoy the same initial success that was seen by Internet Explorer, primarily because alternative search engines had better performances and were equally free for all users. Another significant expansion into related markets included the Windows Phone which altered Windows as the operating system. The models introduced consecutively were the Windows 8 and the Surface Tablet, with the latter enjoying significantly more praise and profitability. As such, this may have suggested that growth into tablet and computer-related items is more beneficial for Windows. Microsoft would also continue to feature updated versions of popular products such as the Xbox, a new search engine in Microsoft Edge, and the nearly annual release of various surface tablets. However, Microsoft Windows and Microsoft Office remain the company’s most sold products. These can be observed as well-executed forms of marketing strategies devised by Microsoft as they had successfully taken the firm into new markets and introduced them to new customers.
The most prominent ethical issues that occurred throughout Microsoft’s early operations were due to unconventional business decisions, such as the obvious exclusion of Netscape from the browser market by providing a free alternative with their own product. The action carried not only ethical but legal ramifications, as antitrust charges and lawsuits followed Netsacpe’s significant losses within the market. The domination of markets through the exclusion or even indirect extermination of competitors is a common theme within the ethics of Microsoft’s business procedures.
The Netscape case poses a complicated question as all popular internet browsers are currently free and accessible to all users and Microsoft’s internet browsers are not as widely used as alternatives such as Google Chrome or Mozilla Firefox. However, the company continues to unfairly limit competing firms in other ways. A more recent example includes the antitrust charges that were based on the fact that Microsoft acquired the support of think tanks through financial investment and assistance from unfair governmental bodies (Zakrzewski, 2022). This has caused lasting effects, such as the potential of a monoculture of devices and operating software which does not allow for diversity but similarly makes room for universally-efficient malware. The aforementioned steps taken by the firm can be an example of faulty marketing strategies implemented by Microsoft as they incurred more reputational damage to the company than positive advertising. The leadership at Microsoft must include integrity and transparency as a more vital component of their policy and company message. Currently, the incentive to profit and dominate the industry outweighs the true and necessary growth and evolution of Microsoft products. This directly corresponds with Microsoft’s inability to enter alternative and related markets.
Situational Analysis
A number of American-based firms have begun to notice increasing issues between their operations and foreign partners, with Microsoft being a prominent figure. Frequent conflicts arise in the introduction of products to Chinese markets which are significantly more restrictive. Though the relationship between China and the U.S. is mutually beneficial in terms of co-production and sales, the inability to meet the standards of Chinese policy can cause larger issues for the firm. Similarly, Microsoft ran into an issue with the European Union which had fined the firm $730 million for violating trust regulations (Jani, 2020). Because of the complexity of certain Microsoft products, economic changes in imports and labor laws make the company very vulnerable if changes occur. The company is still affected by the 2008 crisis during which 5000 employees were let go. While Microsoft is able to adhere to a number of social and cultural trends, they are still largely unprogressive in meeting social and even technical requirements, such as full assimilation to the smartphone market. In terms of technology, Microsoft continues to compete with primary competitors such as Apple, Android, and more recently, Xiaomi. Other phone and computer brands, especially those with different operating systems which outweigh Microsoft’s performances in certain sectors, also illustrate that Microsoft has room for further technological development.
Microsoft possesses a tremendous number of strengths largely due to its role as an industry leader. These include a vast market reach, constant growth, strong brand identity and reputation, efficient advertising, and user-friendly products and software. However, it is also vulnerable to a number of weaknesses which are reduced innovation, poorly selected acquisitions, overexposure within the PC market, and cybercrime-related incidents (Warner, 2019). Similarly, the business tactics employed by Microsoft that work to disadvantage competitors usually result in weakening the position of the company. Opportunities of the firm include further ventures into cloud-based technology, more efficient partnerships and acquisitions, smartphone innovations and products, and expansion into emerging and established markets. The prevalent threats that surround Microsoft are criticism emerging from the workforce, social controversies, aggressive competition largely from Apple, and open source projects that have the potential to provide equally efficient or superior services.
Problem
Microsoft suffers from a variety of organizational problems, but the one that is likely most detrimental to overall operations is the influence of external forces such as foreign policy and social and cultural trends. Microsoft often fails to comply or adapt to the requirements of foreign or even local partners and customers (Kahler, 2020). Similarly, controversies and issues continue to be prevalent as the company is unable to adhere to social changes, especially in relation to equality and social justice. This lack of contact with external forces has caused a number of larger issues for the firm such as misjudged acquisitions, severe restrictions on their products, and the inability to properly expand into other markets (Feldman et al., 2021). As such, the company’s issue of disconnect with their clientele directly impacts sales, which may not suffer drastically overall but are vulnerable to short-term negative impact. While flagship products such as Microsoft Windows may remain unaffected, the unwillingness to connect to the needs of clients has caused Microsoft to remain stagnant or underdeveloped in alternative sectors.
Alternatives
The main issue faced by Microsoft requires fundamental changes in any future approaches that aim to combat the current detriment. Currently, as an industry leader, Microsoft is failing to establish the importance of customer feedback and input in its product creation and general operations. As such, any marketing strategies should prioritize the influence of the customer of Microsoft goods and services. The first alternative strategy includes call-to-action initiatives. Unlike increased interactions on social media, this strategy directly connects to clients with the goal of improving products, services, or company performance. Microsoft has tremendous technological advantages over firms in other sectors and could utilize the gathered data from such initiatives into key information for improvement.
Second, part of the issue many clients have with Microsoft is the market domination it currently holds. As such, the formation of effective partnerships is a strategy that would likely be mutually beneficial and less destructive (Akhtar et al., 2019). Similarly, it would create a space for natural competition and offer Microsoft a more diverse approach to business and product creation. Third, Microsoft already hosts processes that formulate client personas and allow for insight into purchasing trends and preferences. However, the current outlook fails to account for a diverse number of factors such as income brackets, satisfaction with the product following the purchase, and more. Microsoft would have to refine the current strategy without compromising client privacy and not increase invasiveness in the client’s interaction with the product.
Marketing Strategy
With regard to the political and social climate surrounding Microsoft, the most effective marketing strategy would likely be the option that creates better initiatives for partners and possible acquisitions to flourish. This would require Microsoft to alter policy and purchasing strategies that are currently enforced. Partnerships should be prioritized, as the buy-out of other firms essentially limits the capabilities of their leadership which could be essential to growing their unique abilities and market functions. The current issue illustrates that after acquisitions occur, Microsoft fails to fully utilize the strengths of the companies that now work under the firm. Though allowing the firms more freedom does not guarantee more profitability and efficiency, it will allow for natural growth and a better understanding of the company’s functions. The first strategy of call-to-actions may discourage clients as they will require additional efforts and many may choose to not participate. The third strategy can cause clients and partners to feel like their privacy and personal information may be capitalized on and equally discourage involvement if approached inadequately.
Rationale
Organizational issues have the potential to limit ongoing and future expansions at Microsoft. The current citation of the company reveals that poor contact with partners and customers has caused barriers for the firm in terms of growth. The lack of innovation may not drastically affect the firm at the moment but does increase the likelihood that more competitive and technologically advantageous parties may cause difficulty for Microsoft in the future. As the number of bigger competitors increases, Microsoft should utilize strategies that ensure the growth of itself as well as partnering firms. The initial change would require Microsoft to alter its approach to working with other firms by prioritizing partnerships and limiting acquisitions in order to maintain its natural growth and leadership.
References
Akhtar, P., Khan, Z., Rao-Nicholson, R., & Zhang, M. (2019). Building relationship innovation in global collaborative partnerships: big data analytics and traditional organizational powers. R & D Management, 49(1), 7-20. Web.
Feldman, M. P., Guy, F., Iammarino, S., & Ioramashvili, C. (2021). Gathering round Big Tech: How the market for acquisitions reinforces regional inequalities in the US. Kenan Institute of Private Enterprise Research Paper, 21(1). Web.
Jani, H. F. (2020). Germany and the European Union: Europe’s reluctant hegemon? German Politics and Society, 38(4). Web.
Kahler, T. (2020). Microsoft is driving its customers into non-compliance. In T. Kahler’s (Ed), Turning Point in Data Protection Law (pp. 75-80). Nomos eLibrary.
Warner, J. P. (2019). Microsoft: A strategic audit [Master’s thesis]. The University of Nebraska. Web.
Zakrzewski, C. (2022). Microsoft is bigger than Google, Amazon, and Facebook. But now lawmakers treat it like an ally in antitrust battles. The Washington Post. Web.