The international marketing strategy of Microsoft

Résumé du document

Microsoft is an American public multinational conglomerate founded by Bill Gates and Paul Allen in 1975 in Albuquerque, New Mexico, USA. At that time, the founders were students and they wanted to sell their first translator software Altair 8800.
Today, the company is headquartered in Redmond, Washington. Its global annual revenue in 2005 was $39.8 billion and it employs over 60,000 people in 139 countries. Since September 2005, Microsoft has organized itself in three core business groups: Microsoft Platform Products & Services Division, Microsoft Business Division and the Microsoft Entertainment and Devices Division. Microsoft develops, manufactures, licenses and supports a wide range of products and services predominantly related to computing devices. It also provides online communication services and information services through its MSN portals . Thus, the main products of the company are software even if since the beginning it has had a hardware development branch. Thanks to a near monopoly of the market, Microsoft Windows is the leader in the OS industry.

How have those two students built a global company? What was the expansion strategy of the founders of Microsoft?

In order to understand the international policy of the global brand, we will initially focus on the international facts of the company, and in the second part we will study the industry. In the third part, we will analyze the international strategy of the company and, finally, we will focus on the Marketing Mix of Microsoft.

Extraits

[...] In 1980, Microsoft provided an operating system to IBM. Since this partnership, Microsoft's worldwide distribution is also done through IBM and its computers. As Microsoft products are less impossible to circumvent, the company's profitability is threatened and Microsoft tries to invest in other products such as Zune, Xbox 360, Windows Live, IPTV and Vista[7] in order to diversify its range of products and to compete with other technology companies. As a matter of fact, Microsoft had a R&D budget of $ 6.2 billion in 2006[10]. [...]

[...] It appears that Microsoft's suppliers are not powerful. There are 700 different suppliers registering on the SupplierGATEWAY, Microsoft's extranet for vendors. As a matter of fact, Microsoft has more offers from its suppliers than what it needs. Consequently, the company has real decision-making power; it is free to choose which supplier it wants to work with, what quantities and prices to fix etc. Thus, the suppliers of Microsoft find themselves in a very competitive market. The company trusts only few people and it prefers working with partners. [...]

[...] Promotion This includes all tools available to the marketer for 'marketing communication'. According to Neil H.Borden's marketing mix, marketing communications has its own 'promotions mix.' Think of it like a cake mix, the basic ingredients are always the same. However, if you vary the amount of one of the ingredients, the final outcome is different. It is the same with promotions. You can 'integrate' different aspects of the promotions mix to deliver a unique campaign. The aspects of the promotions mix are personal selling, sales promotion, public relations, direct mail, advertising, sponsorship, trade fairs and exhibitions. [...]

[...] Microsoft Financing is a facility providing credits for companies willing to buy Microsoft software products. The online services such as Windows Live and Office Live indicate a real change of Microsoft's strategy[13]. The users have to download these softwares from a Microsoft platform, and they need to pay the ‘rent' every month. Microsoft borrowed the idea for its online services from Yahoo! and Google. Obviously, today the main achievement is the launch of Windows Vista, the new operating system of Microsoft. Organizational Chart Here are the main functions of Microsoft. [...]

[...] - Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to sell. An example would be the sale of vehicles through exclusive dealers. - Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions and household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread. According to information regarding European distributors of the Xbox, it was definitely a well-conceived operation. [...]