Microsoft Corporation is an American technology company. It’s headquarter is located in Redmond Washington USA. It was founded by two friends, Bill gates and Paul Allan; on April 4, 1975, in New Mexico. Microsoft operates in multiple industries which are as follow, computer hardware, computer software, digital distribution and consumer electronics. The foundation of the company was built on, developing interpreting system for Altair 8800, eventually, company became market leader in computer operating system developing industry. Unfortunately, company has lost its market share to android in operating system industry. Some of the operating systems developed by Microsoft are, Windows 7, Windows 8.1, Window xp, window8, window Vista and others. Windows 7 was a big success on the part of Microsoft, in operating system industry. 2009-2015 windows 7 seized the highest market share compare to, Microsoft other operating systems. Presently, Apple and Google are the core competitors of Microsoft in operating systems. Moreover, Microsoft Corporation operates in gaming industry, X-box and other complementary product and software related to the product is also the creation of company. 2015-2016 Microsoft bought two eminent companies LinkedIn and Skype technologies.
Gigantic Corporation like Microsoft is not easy to manage, as mentioned in introduction that, Corporation has multiple operating segment and each segment operates in distinct industry. For such organization formulation of strategy can be very complicated for top-level management. Therefore, to cope with the problem top-level managers use tools to formulate distinct strategy for each segment according to its needs. BSG Matrix is one of the tool which can be useful for top level manager to cope with dilemmas like, which strategy should be adopted for which segment? BCG Matrix was developed by a private consulting firm, based in Boston; “Boston consulting firm”. This matrix was specially designed for those companies which have multiple profit centers or operates in multiple industries. BCG Matrix is a four quadrants graphic representation of multiple segments, which can be analyze by means of Market share and Industry sales growth rate. Following are the categories of segments in BCG matrix; Cash cows, Dogs, Question mark and Stars. BCG matrix examination of Microsoft is given below.
Question Mark
Those segments are included into the category of Question mark which have low relative market share and operate in high sales growth industry. Microsoft Phone hardware segment comes into the category of question mark, following products are manufactured by Microsoft in mentioned segment; Lumia and non-Lumia phones. When android phones were introduced most of the customers of windows cell phone switched to android which almost occupied the market share of Microsoft Lumia. In the current scenario Microsoft should use product development strategy to increase its market share and turn this segment into star.
Stars
Stars are those segments which have high market share and compete in high sales growth industry. Device and consumer segment of Microsoft Corporation, can be counted amongst the stars segments. Windows Operating systems and word processor (MS office), Mobile application and windows related software products and services are included in the mentioned segment. Apple and Google are the competition of Microsoft in D&C segment. Market development and product development strategies are suggested for stars segment according to BSG matrix.
Cash Cows
Microsoft computing and Gaming segment can be included into cash cow category. Cash cows are those segments, which operates in low sales growth industry but have high market share. Such segments are viable for companies to sustain its financial position for long term. Xbox one and Xbox 360 holds a big chunk of market share in gaming industry but yet Sony is the market leader in video game industry. Horizontal integration can help the corporation to grab largest market share in the industry. Microsoft computing and Gaming segment comprise of the following products and services, consoles of gaming and entertainment, royalties of second and third party video games, live subscription of Xbox platform devices and accessories, accessories of Microsoft PC.
Dogs
It is fortunate for Microsoft that, none of its segment fall into the category of dogs. Dogs are those segments which compete in low sales growth industry and have low relative market share. Such segments are liability on the organization. Liquidation strategy is suggested by BCG matrix for such segments.
References
MICROSOFT CORPORATION (MSFT). Retrieved from.
http://csimarket.com/stocks/competitionSEG2.php?code=MSFT
Annual report 2015. Retrieved from.
https://www.microsoft.com/investor/reports/ar15/index.html
Global unit sales of current generation video game consoles from 2008 to 2016 (in million units). Retrieved from.
https://www.statista.com/statistics/276768/global-unit-sales-of-video-game-consoles/
Desktop Operating System Market Share. Retrieved from.
https://www.netmarketshare.com/operating-system-market-share.aspx?qprid=10&qpcustomd=0
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