Microsoft

Microsoft was founded in 1975, when Bill Gates left Harvard at age 19 to work with high school friend Paul Allen on a version of the BAS ! "rogra##ing language$ After #oving the co#"an% fro# Al&u'uer'ue, (ew Me)ico, to Seattle in 1979, Gates and Allen &egan writing o"erating s%ste# software$ *hat ha""ened to the co#"an% since it+s founding is a well,known and oft,told stor%$ Here we highlight a few of the ke% strategies that ena&led Microsoft to achieve such re#arka&le growth in the co#"etition,laden co#"uter industr%Product innovation: Microsoft achieved earl% success &ecause of a single "roduct innovation$ n 19./, BM contracted Microsoft to write the o"erating s%ste#s for its new P!s, which led to the creation of Microsoft 0isk 1"erating S%ste# 2MS,01S3$ Since other P! #anufacturers desired co#"ati&ilit% with BM #achines, Microsoft was soon ado"ted as the standard P! o"erating s%ste#$ Another, even &igger innovation followed$ n 19.4, the co#"an% introduced the now, u&i'uitous *indows, &ased on a gra"hical interface co##on to A""le+s Macintosh s%ste#$ Since it was the first 5windowing6 software to work on P!s fro# an% &rand, *indows7like 01S &efore it7&eca#e the standard for "ersonal co#"uters$ *hile *indows ena&led the co#"an% to vault to unforeseen heights, it continued to develo" innovative software and other "roducts$ Microsoft+s current &ig "ro8ect is a ne)t,generation o"erating s%ste# called Microsoft $(et 2"ronounced 5dot,net63, designed to #erge *indows with the nternet directl%$ Microsoft $(et will allow #ulti"le devices7P!s, wireless "hones, "agers, digital ca#eras, P0As, and other 5s#art devices67to work together over *e& connections with un"recedented ease$ Brand-extension strategy: Microsoft uses its strong &rand na#e to launch new software "roducts$ So#e e)a#"les include Microsoft *ord, Microsoft 1ffice, and Microsoft nternet 9)"lorer$ n 19.9, Microsoft "assed :otus to &eco#e the world+s largest seller of software worldwide$ At that ti#e, the co#"an% &oasted the &roadest arra% of software "roducts and a""lications as well as the highest "rofit #argin in the industr%, at close to ;5 "ercent$ :aunching a new "roduct under a strong e)isting &rand na#e gives the new &rand instant recognition and credi&ilit% with #uch less advertising outla%$ Heavy advertising: n the earl% %ears, Microsoft used advertising s"aringl%$ n the #id,199/s, however, it &egan to advertise aggressivel%$ n 199<, the co#"an% #ade two #a8or #oves- it hired the head of #arketing and advertising fro# Procter = Ga#&le and develo"ed its first glo&al advertising ca#"aign$ >he ca#"aign dou&led the co#"an%+s ad &udget to ?1// #illion, and the following %ear that figure &allooned to ?;// #illion for the *indows 95 launch$ >oda%, it is co##on for the co#"an% to s"end ?5/ #illion #arketing a single "roduct$ ts glo&al #arketing &udget for ;//1 e)ceeded ?5// #illion$ Competitive toughness: Microsoft+s aggressive co#"etitive "ractices ena&led the co#"an% to esta&lish a leadershi" role in #an% "roduct categories, &ut also led to legal &attles$ n one of the #ost "u&lici@ed antitrust suits ever, the A$S$ Bustice 0e"art#ent filed antitrust charges against Microsoft, clai#ing that it had li#ited consu#er choice and stifled co#"etition in "art &% &undling software, such as nternet 9)"lorer, with its o"erating s%ste#$ >he "residing 8udge ruled to s"lit Microsoft into two se"arate co#"anies7an o"erating s%ste# co#"an% and an a""lications co#"an%, &ut the co#"an% continues to o"erate as a whole while its a""eal is "ending$ Product expansion: Microsoft was 'uick to e)"and its &usiness &e%ond o"erating s%ste#s into software a""lications for ho#e and &usiness P! users, educational software, and co#"uter ga#es$ >he co#"an% also e)"anded its o"erating s%ste# &usiness$ n 1994, the co#"an%

introduced its *indows (> o"erating s%ste#, which was designed to co#"ete with A( C as the o"erating s%ste# of choice for large networks$ After overco#ing initial reluctance to e#&race the nternet, Microsoft develo"ed the nternet 9)"lorer *e& &rowser as an answer to (etsca"e, and develo"ed the *e& "ortal Microsoft (etwork 2MS(3 to co#"ete with the likes of DahooE and A1:$ MS( was not successful and endured #a8or alterations &efore &eing re&orn as MS($co#$ >he co#"an% also e)"anded into #edia develo"#ent in the 199/s$ t for#ed a 8oint venture with (B! to create the ca&le station MS(B!, which featured news, financial, and talk show "rogra##ing$ >he co#"an% added another television venture in 1997 when it &ought the set,to" &o) s%ste# *e&>F 2later to &eco#e Alti#ate>F3$ >he co#"an% rolled out a video ga#e console called C&o) intended to co#"ete with advanced ga#e s%ste#s fro# Son% and (intendo$
2Sources- Ge&ecca Buck#an, 5A&out Advertising- Microsoft Ad !a#"aign >outs ts Software for Big Business$6 *all Street Bournal 9uro"e, Banuar% ;4, ;//1H 5*indows of 1""ortunit%$6 Marketing *eek, 0ece#&er 9, 199<H 5Microsoft Hires P=G Marketer$6 Marketing *eek, (ove#&er 1., 199<H www$#icrosoft$co#H3

Questions
1$ ;$ !ould Microsoft &e considered one of the &est and worst e)a#"les of #arketing success in A#erica during the 19./s and 199/sI 0iscuss$ >he Marketing S"otlight notes so#e of the effective co#"etitive #arketing strategies that Microsoft has e)hi&ited in a short &ut ver% successful histor%$ !ould a si#ilar fir# entering the #arket toda% o"erate in the sa#e #annerI 0o an% of the Microsoft strategies &elie future issues that Microsoft and other technolog%,oriented fir#s should "re"are to deal with in co#ing %earsI

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