NBS- 2P2Y Coursework Deadline: 10 December 2012 Student number: 100011886
Management Report: MICROSOFT
Introduction (Abstract and Methodology) Microsoft is the world largest software developer by far. (Microsoft, 2012) It is the industry leader in the computing related business in the past three decades. The success that the corporation has attained has been commonly praised globally. Microsoft’s product has been famous for its practicability and originality. The corporation has been studied in its marketing effort but relatively less in its operational aspect. This management report will be discussing the operation strategies adopted by Microsoft. Specifically, the new product development strategy adopted by Microsoft will be investigated, namely the project of launching tablet ‘Surface’. Diagrams and tables will be applied to assist the report findings. The launch of ‘Surface’ will be discussed in details in the later sections of the report. Also, the potential threats that Microsoft might face will be anticipated.
Business Strategy and related new product development of Microsoft
In this section of the report, the operation strategies employed by Microsoft in relation to its New Product Development (NPD) will be discussed. The crucial factors that affect the operation quality of Microsoft will be investigated. Throughout the discussion, the theories of order-winning and qualifying objectives will be used in assistance for illustrating the analysis. In the fast-changing environment that Microsoft naturally sets in, the New Product Development is always ranked top in its business agenda. Reportedly, Microsoft spent 17% of their revenue on the Research and Development (R&D) department. Compared with the industry top performers, Apple and Sony, Microsoft spent a much larger portion of revenue on its R&D. (Gizmodo, 2010) This enormous figure implicates how high that Microsoft views in its NPD process.
Fig. 1 The spending on R&D from Microsoft, Apple & Sony (Gizmodo, 2010)
The New Product Development Process can be generalized into seven stages: new product opportunity, idea generation, idea screening, business analysis, prototype development, test marketing and commercialization. (Boddy, 2011) Throughout the
process, Microsoft is used to put the emphasis on the stages of ‘prototype development and ‘test marketing’ before the official launch of a new product. On prototype development stage, Microsoft would modify the product in a progressive manner that initiated from rough and broad specifications. (Biazzo, 2009) Microsoft has the tendency to unveil its test marketing in a high profile manner. It could be referred to its prior test marketing of ‘Self Serve Ads’, which aimed at competing with the ‘Adsense’ from Google in the self serve advertising market. (Online Marketing Trends, 2012) Another sound example could be traced back to 2009, which Microsoft welcomes the market testing requested by European Commission on its products of Microsoft Windows and Microsoft Office. (Microsoft, 2009)
In the theory of ‘order-winning and qualifying objectives’, there are three types of factors that may affect the operation performance: ‘order-winning’ factors, ‘orderqualifying’ factors and ‘less-important’ factors. (Slack, Chambers & Johnston, 2012) The ‘order-winning’ factors will give Microsoft the competitive advantage in the industry to gain a leading position. For the ‘order-qualifying’ factors, they will help Microsoft to maintain its competitiveness in the computing and software market.
As Microsoft is the market leader in the computing developer’s industry, the ‘orderwinning’ factors would assert more influence on Microsoft operation performance during NPD. It can be identified that in the software market, quality and flexibility are the major operation indicators to make Microsoft stands out from the rest. For instance, the loopholes in software might induce the interest...