8/12/2019 9.0 Microsoft Case

1/2

Microsoft

Microsoft was founded in 1975, when Bill Gates left Harvard at age 19 to work with high schoolfriend 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 wellknown and ofttoldstor%$ Here we highlight a few of the ke% strategies that ena&led Microsoft to achieve suchre#arka&le growth in the co#"etitionladen co#"uter industr%-

Product innovation:Microsoft achieved earl% success &ecause of a single "roduct innovation$ n19./, BM contracted Microsoft to write the o"erating s%ste#s for its new P!s, which led to thecreation of Microsoft 0isk "erating S%ste# 2MS0S3$ Since other P! #anufacturers desiredco#"ati&ilit% with BM #achines, Microsoft was soon ado"ted as the standard P! o"eratings%ste#$ Another, even &igger innovation followed$ n 19.4, the co#"an% introduced the nowu&i'uitous *indows, &ased on a gra"hical interface co##on to A""le+s Macintosh s%ste#$ Sinceit was the first windowing6 software to work on P!s fro# an% &rand, *indowslike 0S&efore it&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)tgenerationo"erating s%ste# called Microsoft $(et 2"ronounced dotnet63, designed to #erge *indows withthe nternet directl%$ Microsoft $(et will allow #ulti"le devicesP!s, wireless "hones, "agers,digital ca#eras, P0As, and other s#art devices6to work together over *e& connections withun"recedented ease$

Brand-extension strategy:Microsoft uses its strong &rand na#e to launch new software "roducts$So#e e)a#"les include Microsoft *ord, Microsoft ffice, and Microsoft nternet )"lorer$ n19.9, Microsoft "assed :otus to &eco#e the world+s largest seller of software worldwide$ At thatti#e, the co#"an% &oasted the &roadest arra% of software "roducts and a""lications as well as thehighest "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 instantrecognition and credi&ilit% with #uch less advertising outla%$

Heavy advertising:n the earl% %ears, Microsoft used advertising s"aringl%$ n the #id199/s,however, it &egan to advertise aggressivel%$ n 199he co#"an% also e)"anded its o"erating s%ste# &usiness$ n 1994, the co#"an%

8/12/2019 9.0 Microsoft Case

2/2

introduced its *indows (> o"erating s%ste#, which was designed to co#"ete with (C as theo"erating s%ste# of choice for large networks$ After overco#ing initial reluctance to e#&race thenternet, Microsoft develo"ed the nternet )"lorer *e& &rowser as an answer to (etsca"e, anddevelo"ed the *e& "ortal Microsoft (etwork 2MS(3 to co#"ete with the likes of DahooE andA:$ 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 setto"&o) s%ste# *e&>F 2later to &eco#e lti#ate>F3$ >he co#"an% rolled out a video ga#e consolecalled C&o) intended to co#"ete with advanced ga#e s%ste#s fro# Son% and (intendo$

2Sources- e&ecca Buck#an, A&out Advertising- Microsoft Ad !a#"aign >outs ts Software for Big Business$6*all Street ournal uro"e, anuar% ;4, ;//1 *indows of ""ortunit%$6 Marketing *eek, 0ece#&er 9, 199