Service Strategy of Microsoft

High Flyers

Company Introduction• Created in 1975 by Paul Allen & Bill Gates.

• Head Quartered in Redmond, Washington.

• Working 91,005 employees in 105

countries.

• Net Revenue 74.3$ billion in 2012.

Product Categories• Two main products:

Microsoft Windows Microsoft Office

• Other products:

MSN Encarta PC accessoires Xbox

SWOT AnalysisStrengths

•Brand loyalty & brand reputation•Easy to use software•Strong distribution channels•Robust financial performance•Acquisition of Skype

Weaknesses•Poor acquisitions and investments•Dependence on hardware manufacturers•Criticism over security flaws•Mature PC markets•Slow to innovate

Opportunities•Mobile advertising•Mobile device industry•Growth through acquisitions

Threats•Intense competition in software products•Changing consumer needs and habits•Open source projects•Potential lawsuits

STP of Microsoft

• Segmentation & Targeting – Mass market &distribution E.g. –Microsoft office world wide

BUT;user based ( business and personal)

E.g. – Personal – windows home premium Business – Windows professional

• Positioning – Service focus strategyNarrow range of services to fairly broad

market

7Ps of Microsoft• Product

- Mostly known for Windows. Apart from that, Office, Xbox, Live, MSN, Online services, Server and tools, Programming languages, Windows Phone, Gaming, Bing, and more.

• PricePricing strategy-Skimming pricingPricing method- Competitive pricing

• PlaceVirtual & Physical

• PromotionUsing all social media forums such as

Facebook, Twitter, Google+ etc. & web banners

• PeopleEmployees, direct and indirect agents

• ProcessIdentifying software requirements through

surveysIntroducing through alpha, beta versions Gathering more information to

commercialize

• Physical EvidenceSearch engine web pages(MSN, Bing, Live

search)Eye catching pickings with unique

characteristics

Four broad categories of services

• Based on differences in nature of service act (tangible/intangible) and who or what is direct recipient of service (people/possessions), there are four categories of services:

People processingPossession processingMental stimulus processingInformation processing

Four categories of services

People Processing Possession Processing

Mental Stimulus Processing Information Processing

People Possessions

Tangible Ac-tions

Intangible Ac-tions

Who or what is the direct recipients of the service?

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act

Technology in services of Microsoft

• Technology-free service encounter

E.g. Buying PC accessories from physical outlet

• Technology mediated service encounter

E.g. Buying PC accessories or software through E-bay

• Technology-generated service encounter

E.g. searching information using MSN or Bing

Service strategies of Microsoft

• Differentiation strategy

• New service development strategy

• Globalization strategy

• Complementary service providing strategy

Differentiation Strategy• Providing service in tangible & intangible

mannerIntangible – download through the website

of MicrosoftTangible – selling software through CD &

DVDs• Software suits

Office package - Ms Excel, Ms word, Ms Access, Ms PowerPoint etc.

• Upgrading serviceWindows 95, 98, XP, Vista, Seven, Eight

• Giving attention to personnel training

New service development strategy

Radical innovations

• Start-up businessE.g. Introducing “Live search” as a search engine tool in addition to MSN

Incremental innovations

•Service improvementsE.g.MS office package 2007 to 2010

Globalization strategy• Customization– Standard setting with slight differences

Skype- language basisOperating system( Windows)- slight differences

of the interface according to different target audience such as professionals, official and business users

• Information intensityDigitalized information helps to globalize the

service• Complexity

Microsoft personnel keeps updating back office task to move to the next versionE.g. MS office package 2007 to 2010

Complementary service providing strategy

• Application software with operating systems

• Software solutions with computer accessories to support them.

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