Microsoft: Is the Creative Spark Burning Out? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Microsoft: Is the Creative Spark Burning Out?
In July 2010, Microsoft, the global leader in software, services, and solutions, announced record revenue of US$62.48 billion for the year ending June 30, 2010, an increase of 7% from the previous year. This came as a relief to investors, given that the previous year had seen the company report its first-ever annual drop in sales. Founded in 1975, Microsoft's software pervaded computers worldwide. The company had traditionally been regarded as being on the cutting edge of software and services. However, for some time-particularly since the middle of the last decade-it had been increasingly criticised for having had the opportunity for massive disruptive potential in the market but repeatedly allowing it to slip away. Its huge employee base of bright and talented engineers had not kept up with the creativity and innovation displayed by its competitors, whether it was Apple's iPod or iPad, Google's search engine, Nintendo's Wii, Amazon's Kindle, or social networking services such as Facebook and Twitter. Despite its undisputed financial success, Microsoft was being described as having become a "clumsy, uncompetitive innovator". In a tangible reflection of this concern, on 26 May 2010, Microsoft's position as the technology industry's most valuable player was overtaken for the first time in many years, when Apple exceeded the company's US$219.2 billion market capitalisation by almost US$3 billion. Then on 4 October 2010, Goldman Sachs downgraded Microsoft's stock, which it had supported since the company's initial public offering in 1986. Why was Microsoft no longer creating the truly disruptive and breakthrough technological products and services that the company used to pride itself on? How could the company once again regain its position as the powerhouse of technology innovation?
Swot Analysis of "Microsoft: Is the Creative Spark Burning Out?" written by Ali Farhoomand, Havovi Joshi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Microsoft Microsoft's facing as an external strategic factors. Some of the topics covered in Microsoft: Is the Creative Spark Burning Out? case study are - Strategic Management Strategies, Leadership, Marketing, Research & development and Organizational Development.
Some of the macro environment factors that can be used to understand the Microsoft: Is the Creative Spark Burning Out? casestudy better are - – geopolitical disruptions, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, wage bills are increasing,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Microsoft: Is the Creative Spark Burning Out?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Microsoft: Is the Creative Spark Burning Out? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Microsoft Microsoft's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Microsoft Microsoft's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Microsoft: Is the Creative Spark Burning Out? can be done for the following purposes –
1. Strategic planning using facts provided in Microsoft: Is the Creative Spark Burning Out? case study
2. Improving business portfolio management of Microsoft Microsoft's
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Microsoft Microsoft's
Strengths Microsoft: Is the Creative Spark Burning Out? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Microsoft Microsoft's in Microsoft: Is the Creative Spark Burning Out? Harvard Business Review case study are -
Strong track record of project management
– Microsoft Microsoft's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Organizational Development field
– Microsoft Microsoft's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Microsoft Microsoft's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Microsoft Microsoft's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Microsoft Microsoft's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Microsoft Microsoft's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Microsoft: Is the Creative Spark Burning Out? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Microsoft Microsoft's in the sector have low bargaining power. Microsoft: Is the Creative Spark Burning Out? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Microsoft Microsoft's to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Microsoft Microsoft's is present in almost all the verticals within the industry. This has provided firm in Microsoft: Is the Creative Spark Burning Out? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Superior customer experience
– The customer experience strategy of Microsoft Microsoft's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Microsoft Microsoft's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Microsoft Microsoft's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Microsoft: Is the Creative Spark Burning Out? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Microsoft Microsoft's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Microsoft Microsoft's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Training and development
– Microsoft Microsoft's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Microsoft: Is the Creative Spark Burning Out? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Microsoft Microsoft's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Microsoft Microsoft's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Microsoft Microsoft's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Microsoft: Is the Creative Spark Burning Out? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Microsoft: Is the Creative Spark Burning Out? are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Microsoft Microsoft's supply chain. Even after few cautionary changes mentioned in the HBR case study - Microsoft: Is the Creative Spark Burning Out?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Microsoft Microsoft's vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Microsoft Microsoft's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Products dominated business model
– Even though Microsoft Microsoft's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Microsoft: Is the Creative Spark Burning Out? should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Microsoft Microsoft's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Microsoft: Is the Creative Spark Burning Out?, it seems that the employees of Microsoft Microsoft's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Microsoft: Is the Creative Spark Burning Out? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Microsoft: Is the Creative Spark Burning Out? can leverage the sales team experience to cultivate customer relationships as Microsoft Microsoft's is planning to shift buying processes online.
Lack of clear differentiation of Microsoft Microsoft's products
– To increase the profitability and margins on the products, Microsoft Microsoft's needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Microsoft: Is the Creative Spark Burning Out? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Microsoft Microsoft's 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Microsoft: Is the Creative Spark Burning Out? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Microsoft Microsoft's has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Microsoft Microsoft's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Microsoft Microsoft's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Microsoft Microsoft's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Microsoft: Is the Creative Spark Burning Out? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Microsoft: Is the Creative Spark Burning Out? are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Microsoft Microsoft's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Microsoft Microsoft's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Microsoft Microsoft's in the consumer business. Now Microsoft Microsoft's can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Microsoft Microsoft's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Microsoft Microsoft's to increase its market reach. Microsoft Microsoft's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Microsoft Microsoft's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Microsoft Microsoft's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Microsoft Microsoft's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Microsoft Microsoft's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Microsoft: Is the Creative Spark Burning Out? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Microsoft Microsoft's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Microsoft Microsoft's has opened avenues for new revenue streams for the organization in the industry. This can help Microsoft Microsoft's to build a more holistic ecosystem as suggested in the Microsoft: Is the Creative Spark Burning Out? case study. Microsoft Microsoft's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Microsoft Microsoft's is facing challenges because of the dominance of functional experts in the organization. Microsoft: Is the Creative Spark Burning Out? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Microsoft Microsoft's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Microsoft: Is the Creative Spark Burning Out? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Microsoft Microsoft's can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Microsoft Microsoft's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Microsoft Microsoft's to hire the very best people irrespective of their geographical location.
Threats Microsoft: Is the Creative Spark Burning Out? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Microsoft: Is the Creative Spark Burning Out? are -
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Microsoft Microsoft's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Microsoft Microsoft's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Microsoft Microsoft's.
Consumer confidence and its impact on Microsoft Microsoft's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Microsoft Microsoft's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Microsoft Microsoft's in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Microsoft Microsoft's business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Microsoft Microsoft's needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Regulatory challenges
– Microsoft Microsoft's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Environmental challenges
– Microsoft Microsoft's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Microsoft Microsoft's can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Microsoft Microsoft's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Microsoft: Is the Creative Spark Burning Out? .
High dependence on third party suppliers
– Microsoft Microsoft's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that Microsoft Microsoft's is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Microsoft: Is the Creative Spark Burning Out? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Microsoft: Is the Creative Spark Burning Out? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Microsoft: Is the Creative Spark Burning Out? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Microsoft: Is the Creative Spark Burning Out? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Microsoft: Is the Creative Spark Burning Out? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Microsoft Microsoft's needs to make to build a sustainable competitive advantage.
