Business Strategy Monday: Microsoft’s New Strategy

Today’s

Vocabulary

(1) Implication: Things that become true because of something else.

The implications for an improving economy are probably more jobs and higher profits.

(2) To make a case for something: To argue something is true.

We made our case for expanding into Japan, now we need to see if they’ll accept our proposal.

(3) Default device: The device people will use when they’re unsure or don’t get to make a choice

The default device for calling people is still the phone, but it might become the computer.

Today’s

Questions

1. What is Microsoft’s new strategy?

a. To make the best hardware in the world

b. To make the best software in the world

c. To make the software and hardware for their devices really good

2. What does it mean to leverage a relationship?

a. To use an existing relationship to do something else

b. To expand the relationship you have with someone

c. To begin a new partnership

3. How might Microsoft leverage its corporate relationships?

a. To sell tablets to corporations

b. To make tablets more entertaining

c. To sell tablets to the public

7 ________________________

BUSINESS STRATEGY MONDAY

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Cartoon by XKCD.com

By Jeremy Schaar

In the previous two lessons, you learned what Microsoft’s strategy was and how it has changed. Today, you’ll learn about the implications for Microsoft’s strategy.

To quickly review, Microsoft’s previous strategy was to only sell software. Everyone wanted the same software, so they could charge high prices and everyone would pay. They didn’t make hardware because all the hardware was basically the same. It was a commodity and not very profitable.

Things changed for two reasons. First, hardware isn’t a commodity anymore. For example, there are significant differences between an iPhone and a Galaxy Note. Second, Google now gives away Android for free.

Therefore, Microsoft is now trying to copy Apple and make the best software/hardware bundle. They hope people will buy their devices because their hardware and software are so good.

Will this work?

It will be hard. Apple and Samsung are already great. But here’s a case for how Microsoft succeeds.

First, note that most people use their tablets for entertainment–not for work. Apple and Samsung understand this, so their tablets are designed for games and web browsing more than productivity. They don’t really try to sell tablets to corporations. The Microsoft tablet is different. Microsoft emphasizes that you can multitask with it, you can use Microsoft Office, and it has a nice stand and keyboard.

Imagine that the Microsoft tablet therefore becomes the default device for businesses. In fact, Microsoft is still very profitable because of its corporate accounts. (Many people download illegal versions of Microsoft Windows, but corporations still pay.) Microsoft can leverage those existing relationships to sell their tablets. Then, when office workers are all using their tablets, they’ll be able to expand to the general public.

With the strategy decided, it becomes a question of B2B marketing. It will be fascinating to watch how well Microsoft succeeds.

Got questions or comments? How about practicing some new vocabulary and posting your thoughts on the blog, Facebook, or Twitter?

CHECK YOUR ANSWERS!

Answers To Today’s Questions

C, A, A

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You Can Do It All Yourself But You Dont Have To

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