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 - – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, there is backlash against globalization, wage bills are increasing, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%,
there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, 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.
Effective Research and Development (R&D)
– Microsoft Mobile 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: New Wine in an Old Bottle? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
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.
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.
Diverse revenue streams
– Microsoft Mobile is present in almost all the verticals within the industry. This has provided firm in Microsoft: New Wine in an Old Bottle? 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.
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.
High brand equity
– Microsoft Mobile has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Microsoft Mobile to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Ability to lead change in Leadership & Managing People field
– Microsoft Mobile 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 Mobile in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
No frontier risks strategy
– After analyzing the HBR case study Microsoft: New Wine in an Old Bottle?, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Microsoft Mobile has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, Microsoft Mobile 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 Mobile 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.
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.
Low market penetration in new markets
– Outside its home market of Microsoft Mobile, firm in the HBR case study Microsoft: New Wine in an Old Bottle? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Microsoft: New Wine in an Old Bottle? HBR case study mentions - Microsoft Mobile takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Microsoft: New Wine in an Old Bottle?, is just above the industry average. Microsoft Mobile needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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 -
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.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Microsoft Mobile can use these opportunities to build new business models that can help the communities that Microsoft Mobile operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
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 Mobile in the consumer business. Now Microsoft Mobile can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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 -
High dependence on third party suppliers
– Microsoft Mobile 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 Mobile is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Microsoft: New Wine in an Old Bottle?, Microsoft Mobile may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Microsoft Mobile with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
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? .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Microsoft Mobile.
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.
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.
