Chris's Blog

 Ch. 10 - Vertical Integration Strategies This chapter is focused on a firm's ability to engage in multiple stages of a product's or service's value chain. Interestingly, Microsoft often aims to avoid vertical integration. In the firm's most recent annual report includes a statement about competing with vertically-integrated models: "Competitors pursuing this model also earn revenue from services integrated with the hardware and software platform, including applications and content sold through their integrated marketplaces. They may also be able to claim security and performance benefits from their vertically integrated offer. We also offer some vertically-integrated hardware and software products and services. To the extent we shift a portion of our business to a vertically integrated model we increase our cost of revenue and reduce our operating margins. Vertical integration strategies often do not make sense to be pursued by Microsoft. For example, Microsoft Wi

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