Microsoft Corporation

Executive Summary
Yvonne Reed, Joseph Wisniewski, Rachel Whiteside, Edward Eschete

MISSI #
Microsoft;s mission is to ena< e *eo* e and <+sinesses t=ro+/=o+t t=e ,or d to rea i>e t=eir f+ *otentia 8

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Headquarters One Microsoft Way Redmond, WA 98052-6399 USA Te ! "#25$ 882-8080 %a&! "#25$ '06-'329 Website Customer Service ( "800$ 6#2-'6'6 Industry )om*+ter Soft,are )om*+ter -ard,are .amin/ )onso es 0 ectronics Founded (9'5 Founder(s) 1i .ates, 2a+ A en Chairman 1i .ates CE Ste3e 1a mer Emp!oyees (00,5(8 "reas Served Wor d,ide %o+nded in (9'5, Microsoft )or*oration is t=e ,or d,ide eader in soft,are, ser3ices and so +tions8 T=e com*any is famo+s for its Windo,s and Office soft,are as ,e as cons+mer e ectronics s+c= as ta< ets and /ame systems8

SW * "#"+,SIS Stren-ths
$rand !oya!ty. Microsoft =as remained t=e eadin/ OS and soft,are *ro3ider8 T=e com*any maintains more t=an 90: mar?et s=are for 2) OS8 Many cons+mers /re, +* +sin/ t=e OS, are fami iar ,it= it, and ,i contin+e to +se it8 $rand reputation. Microsoft;s <rand is t=e 5t= most 3a +a< e <rand in t=e ,or d, 3a +ed at 7 5'88 <i ion8 %or<es ists t=e cor*oration as t=e 't= most re*+ta< e <+siness in t=e ,or d8 Easy to use soft/are. Windo,s OS and Office soft,are *rod+cts are of /reat @+a ity and 3ery easy to +se8 Stron- distribution channe!s. T=e com*any ,or?s ,it= a t=e maAor com*+ter =ard,are *rod+cers to ens+re com*+ters are so d ,it= a ready *re-insta ed Windo,s soft,are8 Stron- financia! performance. Microsoft /re, re3en+es <y 20: from 2008 to 20(2 and =o ds more t=an 763 <i ion of cas= and cas= e@+i3a ents t=at can <e +sed for ac@+isitions and s+<stantia in3estments into researc= and de3e o*ment8

Wea0nesses
1oor acquisitions and investments. %e, of Microsoft;s *ast ac@+isitions and in3estments =a3e <een s+ccessf+ 8 )ependence on hard/are manufacturers. Microsoft de*ends on com*+ter =ard,are man+fact+rers to de3e o* *rod+cts t=at r+n its Windo,s OS8 Criticism over security f!a/s. T=e Windo,s OS =as <een =ea3i y critici>ed for <ein/ ,ea? a/ainst 3ario+s 3ir+s attac?s8 S!o/ to innovate. Microsoft =as =+/e reso+rce and de3e o*ment reso+rces and /reat *osition to enter ne, mar?ets ,it= inno3ati3e *rod+cts, <+t fai s to do so8

pportunities
C!oud based services. Microsoft co+ d e&*and its ran/e of c o+d ser3ices mar?et, as t=ere is a /ro,in/ demand for c o+d-<ased ser3ices8 Mobi!e advertisin-. Mo<i e ad3ertisin/ mar?ets are e&*ected to /ro, in do+< e di/its o3er t=e ne&t fe, years and Microsoft =as a /reat o**ort+nity to ta* into t=ese mar?ets ,it= its mo<i e OS8 Mobi!e device industry. Microsoft co+ d ta?e ad3anta/e of t=e /ro,in/ smart*=one and ta< et mar?ets <y introd+cin/ more of its o,n ta< et 2)s as ,e as to+c= screen and mo<i e *=one tec=no o/y8

Stock price:
MS%T "4AS5A6$ 7388#590832 "9088#:$ 5ec 2, #!00 2M 0ST

*hreats
Intense competition in soft/are products. Microsoft is constant y +nder *ress+re to introd+ce s+ccessf+ *rod+cts <ot= in 2) and mo<i e mar?ets to com*ete ,it= .oo/ e and A** e8 Chan-in- consumer needs and habits. Many cons+mers =a3e s=ifted from <+yin/ a*to*s and 2)s to <+yin/ smart*=ones and ta< ets8 T=is is a mar?et ,=ere Microsoft is not ,e esta< is=ed8 pen source pro2ects. Many ne, o*en so+rce *roAects are comin/ to t=e mar?et s+c= as t=e ne, Bin+& OS and O*en So+rce Office8 O*en so+rce *roAects are a free a ternati3e and a t=reat to Microsoft;s cost y *rod+cts8

")3E'*ISI#&

Microsoft ,i s*end o3er 7285 <i ion on ad3ertisin/ in 20(38 T=e com*any ad3ertises t=ro+/= radio, te e3ision, <i <oard, and *rint ads as ,e as n+mero+s ,e<sites on ine8 Microsoft a so de i3ers =ands-on ad3ertisin/ e3ents at 3ario+s ocations aro+nd t=e U8S8 and t=e / o<e8 *e!evision Commercia!s C<o& One TD S*ot, EFn3itationE Beno3o Go/a ((S TD S*ot, E2re-MedE Microsoft S+rface 2 TD S*ot, ES+rface %ramesE Microsoft Windo,s 2=one TD S*ot, E2oo -a E "d Campai-ns C<o& One 5on;t %i/=t8 S,itc= Scroo/ ed

C(''E#* M"'%E*I#& S*'"*E&,

MicrosoftEs 3ision is to mar?et a s+ccessf+ <+siness strate/y t=at eads to a s+ccessf+ <+siness8 Microsoft attem*ts to ?ee* its mar?etin/ strate/y +*-to date ,it= t=e demands of t=e time8 T=e com*any ,or?s di i/ent y to create a cor*orate c+ t+re to in t+rn create a <roader <+siness en3ironment8 T=ey stri3e to +nderstand different c+ t+res and <ac?/ro+nds of societies in order to *ro3ide t=em ,it= ,=at t=ey need8 T=ey a ocate reso+rces, <+i d de3ices, and offer ser3ices t=at *ro3ide ca*ti3atin/, inte/ra e&*eriences across many facets of society8 Microsoft a so ,or?s ,it= different cor*orations and <+sinesses to maintain mar?etin/ eaders=i*, as t=e fo+ndation of t=eir mar?etin/ re ies on re*resentation, addition and in3ention8 Microsoft ra ies <e=ind a sin/ e strate/y as one com*any, not a co ection of di3isiona strate/ies8 A t=o+/= t=ey de i3er m+ ti* e de3ices and ser3ices, t=eir sin/ e core strate/y dri3es t=e com*any to set co ecti3e /oa s for e3eryt=in/ t=ey do8 T=eir mar?etin/, ad3ertisin/, and c+stomer interaction is desi/ned to ref ect one com*any ,it= inte/rated a**roac=es t=eir cons+mer and <+siness mar?et* aces8

M"'%E*I#& *

Microsoft act+a y +ses t=ree of t=eir *rod+cts for t=eir )RM and mar?etin/ needs, Mar?etin/2i ot, Microsoft 5ynamics )RM, and Microsoft 5ynamics Socia )RM8 T=ese soft,are too s /i3e t=e com*any t=e <+siness insi/=t t=ey need to <etter ser3ice and +nderstand t=eir c+stomers8 Mar?etin/2i ot is t=eir mar?etin/ a+tomation and m+ tic=anne cam*ai/n mana/ement too 8 T=is soft,are contains *o,erf+ <e=a3iora and mar?etin/ ana ytics, ,=ic= ena< es Microsoft to easi y tar/et and se/ment t=eir c+stomers, +nderstand ,=at t=ey are interested in, and t=en en/a/e t=em at t=e ri/=t time ,it= t=e ri/=t messa/e8 Wit= Mar?etin/2i ot, Microsoft can monitor and meas+re c+stomer <e=a3ior and offer t=e <est so +tion to s*end t=eir mar?etin/ do ars8 Microsoft 5ynamics )RM is a f+ y inte/rated c+stomer re ations=i* mana/ement system, ,=ic= /i3es Microsoft t=e ca*a<i ity to easi y create and maintain a c ear 3ie, of c+stomers from first contact t=ro+/= *+rc=ase and *ost-sa es8 Microsoft 5ynamics Socia )RM a o,s Microsoft to en/a/e in mar?etin/ t=ro+/= socia media <y a o,in/ c+stomers to contact sa es re*resentati3es t=ro+/= 1 o/s, Socia 4et,or?s, %or+ms and Micro< o/s8 T=is =e *s Microsoft *ro3ide c+stomers ,it= a fee in/ of sec+rity t=at if a *ro< em occ+rs, t=ey =a3e many ,ays to contact someone for =e *8 )reatin/ t=ese ty*es of c+stomer re ations=i*s a so *ro3ides sa es re*resentati3es ,it= an o**ort+nity to <+i d ra**ort ,it= c+stomers as ,e as s+//est ne, *rod+cts or +*/rades8 T=e c+stomers in t+rn are more i?e y to *+rc=ase a *rod+ct or +*/rade <eca+se t=ey tr+st t=at re*resentati3e8 Microsoft a so a o,s c+stomers to ea3e ratin/s or re3ie,s on t=ese sites8 T=is *ro3ides *otentia c+stomers ,it= an o**ort+nity to see =o, *rod+cts =a3e ,or?ed o+t for ot=er c+stomers <efore t=ey decide to ma?e a *+rc=ase8

+S "#) C #CE1*S

S CI"+ ME)I" M"'%E*I#& "#) S*'"*E&,

Microsoft contin+es to e&*and t=eir inte/rated socia media mar?etin/ cam*ai/n t=ro+/= %ace<oo?, T,itter, and 1 o/s8 %+rt=er e&*andin/ and de3e o*in/ t=is cam*ai/n a o,s Microsoft to contin+e to foc+s on c+stomer;s needs and as ,e as /enerate re3en+e8 T=ro+/= socia media, Microsoft is a< e to create a * atform for c+stomers to e&*ress ,=at t=ey ,ant and ,=at t=ey do not ,ant8 Fn ret+rn, Microsoft can contin+e to a** y t=ose s+//estions to im*ro3e t=eir c+rrent *rod+cts, de3e o* ne, *rod+cts, and s+it t=eir c+stomer;s needs in order to maintain a s+ccessf+ <+siness8

Microsoft;s socia media mar?etin/ strate/y re3o 3es aro+nd t=eir t=ree main cor*orate o<Aecti3es! *rod+ct im*ro3ement, comm+nication, and *rod+ct ad3ertisin/8 1roduct Improvement. Microsoft +ses socia media s+c= as %ace<oo?, T,itter, and any ot=er ,e<sites t=at t=eir c+stomers ,o+ d +se re/+ ar y to =ost < o/s or ea3e comments and s+//estions as to ,=at feat+re t=ey ,o+ d o3e to =a3e or to not =a3e8 Communications. So t=at no is eft o+t of t=e oo*, Microsoft a so +ses t=ese same socia media < o/s to ?ee* in contact ,it= t=eir cons+mers8 T=ey are a< e to +*date c+stomers ,it= t=e dai y c=an/es in tec=no o/y as ,e as ne, *rod+ct de3e o*ment <y eit=er sendin/ o+t t,eets on T,itter or sim* y +*datin/ t=eir stat+s on %ace<oo?8 1roduct advertisin-. As far as ad3ertisin/ t=eir *rod+cts, Microsoft +ses a 3ariety of so+rces, <+t as a *art of t=eir inte/rated mar?etin/ strate/y Microsoft;s /oa is to sat+rate a areas of socia media8 Microsoft +ses t=ese *+ strate/ies in order to /et ideas and s+//estions on im*ro3ements8 T=ey +se t=ose same ideas and s+//estions to find ,ays to a**ea to t=e c+stomer and et t=em ?no, t=at t=ey are istenin/8

S CI"+ 'ES1 #SI$I+I*,

Microsoft;s main foc+s isn;t A+st *ro3idin/ e&ce ent *rod+cts to its c+stomers8 T=ey a so set aside time to /i3e <ac? to t=eir em* oyees as ,e as different comm+nities and non*rofit a/encies8 T=e com*any =as =e d t=e H( s*ot in )or*orate Socia Res*onsi<i ity for 2 years8 Microsoft ,outhSpar0. Fn Se*tem<er 20(2, Microsoft decided to reac= o+t to a different cro,d8 Fnstead of main y foc+sin/ on t=e ,or?in/ c ass, t=ey di3erted t=eir attention to yo+t= <y a+nc=in/ Microsoft Go+t=S*ar?8 Microsoft Go+t=S*ar? is a com*any,ide initiati3e to connect 300 mi ion yo+t= ,it= o**ort+nities for ed+cation, em* oyment, and entre*rene+rs=i*8 Fn order to ma?e t=is =a**en s+ccessf+ y, t=ey =a3e created *artners=i*s ,it= /o3ernments, non*rofit or/ani>ations, and <+sinesses8 *echno!o-y for &ood Campai-n. Wit= t=eir Tec=no o/y for .ood cam*ai/n, t=ey =a3e de3e o*ed a *ro/ram to donate Office 365 to non*rofits in #( co+ntries to =e * t=em <etter ser3e t=eir comm+nities8 So far Microsoft =as donated 7'95 mi ion in soft,are to more t=an '0,000 non*rofits8 45th Emp!oyee &ivin- Campai-n. 5+rin/ t=eir 30t= 0m* oyee .i3in/ cam*ai/n, a cam*ai/n desi/ned to matc= em* oyee financia and 3o +nteer contri<+tes, Microsoft and its em* oyees /a3e more t=an 7(00 mi ion to o3er (8,000 non*rofits ,or d,ide in %isca year 20(3 a one8 T=is s+r*assed 7( <i ion of tota contri<+tions since t=eir first cam*ai/n in (9838

S*"%EH +)E'S
1eca+se Microsoft a**reciates t=e im*ortance of istenin/ to and ta ?in/ ,it= t=ose ,=o are affected <y t=eir decisions, t=e com*any acti3e y see?s in*+t and en/a/ement ,it= a <road ran/e of sta?e=o ders and direct dia o/+e ,it= in3estors, 4.Os, and iss+e-ad3ocacy or/ani>ations8 Microsoft remains informed <y en/a/in/ ,it= t=o+sands of sta?e=o ders aro+nd t=e ,or d, ran/in/ from =+man ri/=ts e&*erts to *arents concerned a<o+t t=e on ine safety of t=eir c=i dren8 Fn ,or?in/ to cond+ct <+siness ,it= inte/rity, t=e com*any en/a/es ,it= a ,ide ran/e of sta?e=o ders across a *arts of t=eir <+siness o*erations8 Microsoft;s main sta?e=o ders inc +de <oard mem<ers, o,ners, in3estors, s=are=o ders, em* oyees, c+stomers, s+** iers, *artners, comm+nities, and /o3ernment a/encies8

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F )I'EC* 'S

1i .ates, c=airman Ste3e 1a mer, )0O 5ina 5+< on, former )%O of I2Mor/an )=ase Raymond D8 .i martin, former c=airman, *resident and )0O of Merc? J )o8 Fnc8 Reed -astin/s, fo+nder, c=airman and )0O of 4etf i& Fnc8 5r8 Maria M8 K a,e, *resident, -ar3ey M+dd )o e/e 5a3id %8 Mar@+ardt, /enera *artner at A+/+st )a*ita )=ar es -8 4os?i, 3ice c=airman of 1an? of America )or*8 5r8 -e m+t .8 W8 2an?e, former c=airman of t=e <oard of mana/ement at 1MW A.

FI#"#CI"+S
On Octo<er 2#, 20(3, Microsoft )or*8 anno+nced re3en+e of 7(8853 <i ion for t=e @+arter ended Se*tem<er 30, 20(38 .ross mar/in, o*eratin/ income, net income, and di +ted earnin/s *er s=are for t=e @+arter ,ere 7(38#2 <i ion, 76833 <i ion, 7582# <i ion, and 70862 *er s=are8

Microsoft Earnin-s 'e!ease F,67 86

Income Statements - in millions, except per share amounts
"Reconci ed in accordance ,it= /enera y acce*ted acco+ntin/ *rinci* es ".AA2$ to non-.AA2 financia res+ ts$

Three Months Ended September 30, 2013 Revenue Cost of revenue $ 18,529 $ 5,114 2012 16,008 4,168

Gross margin Operating expenses

13,415

11,840

Research an! !evelopment

2, !

",460

#ales an! mar$eting

3,304

",%4&

General an! a!ministrative

1,010

1,1"'

(otal operating expenses

,081

6,&)"

Operating income Other income *ncome +efore income taxes ,rovision for income taxes -et income .arnings per share $

!,334 4 !,408 1,1!4 5,244 $

&,)08 ""6 &,&)4 1,068 4,466

/asic

0"!3 $

00&)

1ilute! 2eighte! average shares outstan!ing

0"!2 $

00&)

/asic

8,339

8,)%6

1ilute! Cash !ivi!en!s !eclare! per common share $

8,434 0"28 $

8,4%4 00")

References
I+r3ici+s, I8 "20(3$8 SWOT ana ysis of Microsoft. Retrie3ed 4o3em<er 5, 20(3, from =tt*!LL,,,8strate/icmana/ementinsi/=t8comLs,ot-ana ysesLmicrosoft-s,ot-ana ysis8=tm

Antari?sa, G8 "20(3$8 )ase St+dy! <+siness and mar?etin/ strate/y of Microsoft . Retrie3ed 4o3em<er 5, 20(3, from =tt*!LL,,,8st+dymar?etin/8or/Lartic esLMar?etin/L)aseMSt+dy8=tm 1a mer, S8 "20(3$8 One Microsoft! )om*any rea i/ns to ena< e inno3ation at /reater s*eed, efficiency. Retrie3ed 4o3em<er 5, 20(3, from =tt*!LL,,,8microsoft8comLen+sLne,sL*ressL20(3LA+ (3L0'-((onemicrosoft8as*& Ro,e, T8 "20(3$8 Socia Media Mar?etin/ Strate/ies! MicrosoftEs mar?etin/ of Windo,s ' demonstrates =o, socia media s+c= as %ace<oo?, T,itter, and 1 o/s can <e +sed as *art of an inte/rated mar?etin/ cam*ai/n. Retrie3ed 4o3em<er 5, 20(3, from =tt*!LLs+ite(0(8comLaLsocia -media-mar?etin/-strate/ies-a220285 Reed, 18 "20(3$8 W=y ,e;re a<o+t to /et s,am*ed ,it= S+rface ads t=is =o iday season . Retrie3ed 5ecem<er 2, 20(3, from =tt*!LLne,s8ya=oo8comL,=y-s,am*ed-s+rface-ads-=o iday-season-0030(82068=tm Microsoft Fnc8 "20(3$8 20(3 )or*orate citi>ens=i* re*ort. Retrie3ed 5ecem<er 2, 20(3, from =tt*!LL,,,8microsoft8comLa<o+tLcor*orateciti>ens=i*Len-+sLre*ortin/L Microsoft Fnc8 "20(3$8 Wor?in/ res*onsi< y. Retrie3ed 5ecem<er 2, 20(3, from =tt*!LL,,,8microsoft8comLa<o+tLcor*orateciti>ens=i*Len-+sL,or?in/-res*onsi< yL