Why is Microsoft so Successful? Rajan Mann L4L Introduction
Transcription
Why is Microsoft so Successful? Rajan Mann L4L Introduction
Why is Microsoft so Successful? Rajan Mann L4L Introduction Microsoft Corporation is the third biggest company in the world, generating a turnover of almost 70 billion dollars in 2011 – an amazing feat for what started as a small computer company back in 1975. It produces quality systems and software that almost every device in the world uses today. This essay aims to explain what Microsoft have done right and what they do that makes them stand out from the masses of similar smaller computer companies. Leadership ‘A chain is only as good as its weakest link.’ Thomas Reid, ‘Essays on the Intellectual Powers of Man’. I believe that this is also true for a team – it must function well, but if one of the team members fails to contribute, there is no point carrying on without that vital part. A team needs everybody to work hard to succeed, and I think that this is something Bill Gates and Paul Allen (founders of Microsoft) were extremely good at motivating their workers to do. Paul Allen later quit, leaving Bill Gates to lead the company forwards. A leader has to manage employees without seeming too pushy, so that employees will respect him/her. Bill Gates was very good at doing so and was treated like a member of a team rather than a boss. Organisation Organisation of a company is a vital factor of a successful company, such as Microsoft. The company is split into five sections (Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division), each with a section leader and employees – a bit like separate companies, but all working together to create one incredible result. I think that this is an ingenious idea as each member feels like they are part of a close team, but part of the bigger picture as well. Microsoft is run by Board Members, but instead of the usual situation in which the higher up members get the better jobs, all Microsoft employees get a vote as to who becomes a Board Member. This would make them feel included in the decisions of the company and not feel like they do not get their say. I think that this is also a clever idea as it makes everybody feel included and may encourage employees to work harder for the company. Trust In my opinion, a company is never going to get anywhere if the manager doesn’t trust people to do their jobs. The owner of a company can’t do everything at once, and supervise everything at the same time. When a manager does this, the employees will feel like they aren’t good at their job and need to be watched all the time to do a decent job. An owner has to trust that each individual can do his/her job well, and one of the only ways he can show this is by letting them get on with their job. Bill Gates showed this when he retired in January 2000 and let other people manage the company whilst he took a smaller role in the business. This act of trust is one of the risks someone will take, and this time it paid off. Easy to Use Microsoft has done a brilliant job in making all of its products easy to use. I think that this is how Microsoft has got their products as the dominant product on the market. For example, when Microsoft introduced Windows Internet Explorer (or IE), it was immediately favoured by the public. This is because they didn’t have to learn how to use it but instead it was intuitive and clearly labelled. Although there are some extra features that people would need to find out specifically, these functions are not necessary in the workings of Internet Explorer. I guarantee that if to work Internet Explorer you needed to know a programming language, almost nobody would use it. Making successful products is all about opening it to as wide a target market as possible. Another example is Microsoft Office, a collection of Word, Excel, PowerPoint, Outlook and a few other less useful tools. These office tools are completely dominant in the market, with barely any other products like it out there. Again, the reason for their success is the ability to open the application and start doing whatever needs to be done. Marketing Of course, marketing is an essential part of a successful business. If Microsoft had advertised on the side of one bus in a small village, it wouldn’t have been anywhere near as successful as it is today. In the Microsoft logo, there is a small line between the ‘O’ and the ‘S’. This line is meant to represent speed and motion, although not many people consciously notice it. This is subconsciously messaging to the consumers about the brand, before they’ve even picked a product to buy. It is things like this that get customers. One of Microsoft’s main marketing strategies is letting their customers speak for the product, and so showing that the product is useful and other people actually use it. Using this method also encourages people to buy a product if they don’t want to be left behind. If the consumers see other people using a product, they will buy it to keep up-to-date. This is a crafty method because it doesn’t even seem like the company is advertising their product. The head of marketing at Microsoft is David Webster, an experienced and brilliant marketer. Competition Microsoft has to fight its competition to get customers, and to avoid all consumers staying with one company. To do this, Microsoft has to be different from its competitors and have a reason for customers to buy from them. An important part of this strategy is gaining customers (see marketing) and then not letting them go - without being too pushy. Microsoft have done this by creating original products like Microsoft Office, but also creating products that compete with other companies, such as Microsoft’s search engine Bing competing with Google, a well-known search engine. Bing has put pressure on Google to improve their product to keep on top. Microsoft says that projects in progress such as Bing are to experiment on and improve their other products. Microsoft also created So.cl (pronounced Social) to compete with the massive company Facebook. So.cl had almost no chance against Facebook, but again was used to experiment with the different possibilities that it had. In the end, it was turned into a file-sharing site for students and Microsoft practically disowned the project. However, these products were not completely useless. Microsoft had a good look into the makings of other companies and used this experience to improve their already successful company. Employee Retention Microsoft need all the employees that they get to stay with them for as long as possible, and have tried to do this through making life on the main Microsoft campus (in Redmond, Washington, U.S.A.) as easy as possible. If employees find it difficult to work for Microsoft and leave, the company is never going to get anywhere because there is nobody to do the work. This makes employee retention an important part of a successful company. To do this, Microsoft has 2000 solar panels to encourage employees that they are working for an eco-friendly, efficient company. This also saves money for the company, and so is a winwin situation. Another thing that Microsoft does is have a shuttle for workers to go to and from campus every day, again being environmentally friendly and keeping employees happy. This also encourages employees to work for Microsoft because they save money on fuel that they would have spent getting to work and therefore almost getting paid more. All of these things contribute to Microsoft being a successful company. Product and Market Introduction If somebody is releasing a new product, it typically follows this lifecycle. I will now explain the cycle to you. When the product is first released, nobody really knows about it and so sales are low as seen in Introduction phase. As the product is advertised more people buy the product and tell their friends about it, sales start to escalate. In the Growth phase each person who buys the product is encouraging roughly two other people to buy it. This leads on to the climax, or Maturity, when almost everybody has the product but people are still buying it. It is usually at this point that companies think about creating a new product while they still have money from the previous product to develop it. Following this, the product starts to get old and everybody has already got it so the sales start to decline rapidly, usually because another similar product has come out, but is more modern. However, by the time the product has finished its decline, the product that the company started developing at Maturity is released into the Introduction phase and the whole cycle restarts. This is the lifecycle of a typical product. If Microsoft stayed in one market, then only people in that market would buy the product. To have a successful business, the product or products need to open to as big a target market as possible to gain the most sales. Microsoft has done this by creating different products for different markets and making each specific product unique in the market. For example, Microsoft originally made OS’s (operating system) and when they released Xbox in 2001 the sales opened up to a whole new market: young adults and gamers. Combine this with Microsoft Office for businesses; Windows for people with computers (which is almost everyone) and Microsoft have a product for almost everybody in the world. The way Microsoft has widened its customers means that it deserves to be one of the main technology companies in the world. Microsoft also knows what products to launch and how successful it will be. This links into Market Introduction in that when Microsoft releases a new product they can predict who will buy it and what the main selling points are (see advertising). A good example of this is the contacting service Skype. Microsoft didn’t actually create this company, but when it came onto the market they instantly bought it for $8.5 billion because they saw its potential and how to improve it. This sight is what makes Microsoft ruthless and successful. Microsoft continues to improve Skype and made $20 million in the first year of having Skype. Product Design One of the main reasons consumers buy a product is the design of how it looks, or how it works. Microsoft has done a great job in designing its products so that as soon as customers see the product they know that they like the look of it, and increases the chance of a sale. Studies show that humans decide what they think of a person within fifteen seconds of meeting them and I believe that this is also true for a product. If a consumer sees a massive hunk of metal and wires coming out of the sides, they will instantly think that the product is rubbish and won’t even work. However, if they see a slim, flawless, smooth and well-designed product a consumer would think that it may be useful or have potential. Even though Microsoft is mainly based on how the product works (e.g. the programming and wiring) it still puts thought into how the interface is designed. The principles are the same for what’s inside the casing and what the consumer actually holds – it needs to be fast, consistent and flawless. Microsoft already does this – in fact, I’m writing this on Microsoft Windows software! – And the results are outstanding. As you look through the product you realise that it is efficient and does a lot of things that are helpful without you even knowing. The user interface is easy to use (as talked about earlier) and everything works together to create and awesome product. All these factors contribute to Microsoft having elegant - and maybe even the best in the market - product design. Bibliography Wikipedia - http://en.wikipedia.org/wiki/Microsoft Papatoto http://papatoto.com/article/811151295453/7_points_that_makes_microsoft_so_successful !!! Thomas Reid, ‘Essays on the Intellectual Powers of Man’, 1786 Microsoft – www.microsoft.com A conversation with Microsoft's marketing strategist - http://news.cnet.com/8301-13860_320001293-56.html Xbox - http://en.wikipedia.org/wiki/Xbox Product Lifecycle http://en.wikipedia.org/wiki/Product_lifecycle_(marketing)#Product_life_cycle_.28PLC.29 Why is Microsoft So Successful? Rajan Mann L4L This essay is my own work and different to anything covered in class. Pupil’s signature: A signature from a teacher of the relevant subject is not needed as the subject is business and the Lower 4th do not do business in lessons. Teacher Signature: Mr Cooley, Classics Word Count: 2110