Microsoft: New Wine in an Old Bottle? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Microsoft: New Wine in an Old Bottle?
Within four weeks of becoming the new CEO of Microsoft, Satya Nadella lays out the major challenges that await him in the two letters he sends to everyone at Microsoft. He defines Microsoft's battlefield as the "mobile-first and cloud-first world". That is where Microsoft needs to get its products and technology right, to build platforms and ecosystems and to integrate Nokia devices, services and the new mobile capabilities. In order to do so, Microsoft needs to zero in on "a mobile and cloud-first world and do new things." In his view "...industry does not respect tradition - it only respects innovation". And in order to innovate, he needs his 125,000 strong staff around the world to lead and help drive cultural change, to find Microsoft's swing so that the team is "...in such perfect unison that no single action by any one is out of synch with those of all the others". Many challenges await Microsoft in its transformation journey. On platforms, it is not clear what the future will hold for Windows. On devices, Microsoft needs to find ways to woo application developers to build its mobile ecosystem. On integration, the Company has to find ways to transfer and to grow the mobile capability acquired from Nokia. And most importantly, Nadella must figure out how he can achieve cultural changes to focus everyone on innovation via collaboration.
Swot Analysis of "Microsoft: New Wine in an Old Bottle?" written by Ali Farhoomand, W.H. Lo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Microsoft Mobile facing as an external strategic factors. Some of the topics covered in Microsoft: New Wine in an Old Bottle? case study are - Strategic Management Strategies, Change management, Collaboration, Corporate governance, Growth strategy, Leadership, Organizational structure, Strategic planning, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Microsoft: New Wine in an Old Bottle? casestudy better are - – challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , technology disruption,
there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Microsoft: New Wine in an Old Bottle?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Microsoft: New Wine in an Old Bottle? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Microsoft Mobile, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Microsoft Mobile 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: New Wine in an Old Bottle? can be done for the following purposes –
1. Strategic planning using facts provided in Microsoft: New Wine in an Old Bottle? case study
2. Improving business portfolio management of Microsoft Mobile
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Microsoft Mobile
Strengths Microsoft: New Wine in an Old Bottle? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Microsoft Mobile in Microsoft: New Wine in an Old Bottle? Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Microsoft: New Wine in an Old Bottle? firm has clearly differentiated products in the market place. This has enabled Microsoft Mobile to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Microsoft Mobile to invest into research and development (R&D) and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Microsoft Mobile digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Microsoft Mobile 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 Mobile has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Microsoft: New Wine in an Old Bottle? 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.
Analytics focus
– Microsoft Mobile is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ali Farhoomand, W.H. Lo can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Microsoft Mobile 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 Mobile is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Microsoft: New Wine in an Old Bottle? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Microsoft Mobile in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Microsoft Mobile in the sector have low bargaining power. Microsoft: New Wine in an Old Bottle? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Microsoft Mobile to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Microsoft Mobile
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Microsoft Mobile does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Microsoft Mobile is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Microsoft Mobile has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Microsoft Mobile 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.
Cross disciplinary teams
– Horizontal connected teams at the Microsoft Mobile are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Microsoft Mobile is one of the leading recruiters in the industry. Managers in the Microsoft: New Wine in an Old Bottle? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Microsoft: New Wine in an Old Bottle? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Microsoft: New Wine in an Old Bottle? are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Microsoft: New Wine in an Old Bottle? 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 Mobile has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Microsoft Mobile is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Microsoft: New Wine in an Old Bottle? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Microsoft: New Wine in an Old Bottle?, it seems that the employees of Microsoft Mobile 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.
Interest costs
– Compare to the competition, Microsoft Mobile 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.
Products dominated business model
– Even though Microsoft Mobile 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: New Wine in an Old Bottle? should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Microsoft Mobile 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.
Increasing silos among functional specialists
– The organizational structure of Microsoft Mobile is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Microsoft Mobile needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Microsoft Mobile to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Microsoft Mobile 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.
Need for greater diversity
– Microsoft Mobile has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Microsoft Mobile has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Microsoft Mobile products
– To increase the profitability and margins on the products, Microsoft Mobile needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Microsoft: New Wine in an Old Bottle? | 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: New Wine in an Old Bottle? are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Microsoft Mobile can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Microsoft Mobile can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Microsoft Mobile to increase its market reach. Microsoft Mobile 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 Mobile in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Microsoft Mobile can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Microsoft Mobile can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Microsoft Mobile 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 Mobile to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Microsoft Mobile has opened avenues for new revenue streams for the organization in the industry. This can help Microsoft Mobile to build a more holistic ecosystem as suggested in the Microsoft: New Wine in an Old Bottle? case study. Microsoft Mobile can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Microsoft Mobile has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Microsoft Mobile 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: New Wine in an Old Bottle? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Microsoft Mobile to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Microsoft Mobile can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Microsoft Mobile to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at Microsoft Mobile 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 Leadership & Managing People segment.
Threats Microsoft: New Wine in an Old Bottle? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Microsoft: New Wine in an Old Bottle? are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Microsoft Mobile 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: New Wine in an Old Bottle? .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Mobile business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Microsoft Mobile 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.
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 Mobile needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Microsoft Mobile in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Microsoft Mobile
– 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 Mobile.
Stagnating economy with rate increase
– Microsoft Mobile 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Microsoft Mobile will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Microsoft Mobile is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Microsoft Mobile has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Microsoft Mobile needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Microsoft Mobile in the Leadership & Managing People industry. The Leadership & Managing People 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.
Weighted SWOT Analysis of Microsoft: New Wine in an Old Bottle? 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: New Wine in an Old Bottle? 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: New Wine in an Old Bottle? 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: New Wine in an Old Bottle? 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: New Wine in an Old Bottle? 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 Mobile needs to make to build a sustainable competitive advantage.