Chris's Blog

Ch. 9 - Tacit Collusion: Cooperation to Reduce Competition This chapter focuses on how firms within an industry cooperate in order to reduce competitiveness and raise prices above competitive levels. One of Microsoft's most successful collusion tactics is strategic alliance . The firm often forms an alliance with companies in a closely related industry in order to gain a competitive advantage. One of the most overt example of this tactic is seen with Microsoft's Xbox segment. Microsoft forms alliances with game development companies which allows for exclusive content or early release of content. Examples of this include partnerships with Activation's Call of Duty series where content has been available for Xbox month's earlier than other consoles. Another example is an alliance with 343 Industriesand whereby the wildly popular game "Halo" was only available on Xbox.

 Ch. 8 - Flexibility: Real Options Analysis Under Risk and Uncertainty This chapter focuses on a firms ability to change direction quickly and cheaply given unanticipated changes in a competitive situation. Microsoft's Types of Flexibility : Option to Defer: Microsoft uses leases that span from 1 year to 20 years for datacenters, corporate offices, research and development facilities, retail stores, and certain equipment. This allows for potential explorations rather than purchasing. Option to Expand: Microsoft's personal computing segment is especially flexibly with the option to expand. Microsoft will start by selling a computer or program, then will expand with software or accessories based on how successful that segment is. 

Ch. 7 – Product Differentiation This chapter focuses on business strategies where firms attempt to increase the willingness of customers to pay for the products or services. Microsoft uses different strategies of product differentiation depending on the segment of buisness. I'll describe their strategy for each segment below: Productivity & Buisness : (Ex: Office, Office 365, Exchange, SharePoint, Skype, Linkedin, Dynamics) This segment focuses on linkages as a way of product differentiation. Providing a product and service with linkages among functions within a firm as well as with other firms helps Microsoft's productivity & buisness segment be such a successful entity.   Intelligence cloud : (Ex: Azure, Windows Server, GitHub, SQL Server) This segment's product differentiation focuses directly on the attributes of Microsoft's intelligence cloud features and product complexity. Personal Computing : (Windows client, Xbox, Bing, Display advertising, Surface la

Ch. 6 - Cost Leadership This chapter describes how a firm can choose a cost leadership buisness strategy to can gain an advantage by reducing economic cost below the competitors. Microsoft's Cost Leadership Strategies : Microsoft has many sources of cost advantage that allows the business to function without sacrificing quality. Manufacturing : Microsoft has a lean strategy to achieve low cost and high quality simultaneously.  Marketing : Microsoft has reliable products and services that continues to grow due to the proven value. R&D : Microsoft continuously focuses on improving products year after year. This includes trying new software of providing frequent updates to improve software. Finance : Microsoft has a stable financial structure with relatively low cost to operate. Accounting : Microsoft collects data for proper accounting principles that are divided into three segments: Productivity & Buisness, Intelligence cloud, and Personal Computing. Sales : Microsoft focuse

Ch. 5 - Evaluating Firms Strengths & Weaknesses: The Resource-Based View This chapter describes how to evaluate a company based on the various resources of the firm. Microsoft's Recourses : Resource Categories : 1. Financial Capital Microsoft has impressive financial resources including a net income of $44.2 billion and retained earnings of $34.6 billion. 2. Physical Capital Microsoft has a large physical capital including $44.1 billion in property and equiptment. 3. Human Capital Of course Microsoft grew with Bill Gates as founder and CEO, but the firm still has impressive leadership including the current CEO, Satya Nadella. 4. Organizational Capital Microsoft is a strongly structured organization with excellent systems in place for continued success. Microsoft absolutely has sustained competitive advantage and distinctive competence that can be shown through the VRIO Framework . Value : Does Microsoft’s resources and capabilities enable the firm to respond to environmental th

Ch. 4 - Evaluating Environmental Opportunities This chapter speaks about how to take advantage of opportunities and evaluate treats as an opportunity to neutralize. Microsoft falls into multiple strategies across this chapter : Network industry ( "increasing-returns" industry ) In the emerging market of personal computers, Microsoft made the ultimate network decision to bundle the software "Internet Explorer" for free with every Windows operating machine. This gave customers free access to the internet and allowed Microsoft to grow exponentially as more people wanted to connect with one another on the same platform. The firms decision to provide free software for internet access, rather than charge an extra price for the software, vaulted Microsoft into a monopoly in the personal computing realm, and extended the position by forcing free internet to be the industry standard. First movers advantage Building off the early success, Microsoft used the "first movers