Microsoft’s pricing strategy is a critical point of differentiation and also a source of advantage. It makes software and operating system meant for the masses. Its both a business strategy and a unique advantage that Microsoft has achieved. But Microsoft had to move toward price discrimination because the willingness-to-pay for software was related to software piracy. An organizations marketing mix or 4Ps (Product, Place, Promotion & Price) determines the strategies and tactics for implementing a marketing plan. Microsoft Corporation’s generic strategy for competitive advantage is aligned with the company’s intensive strategies for growth. For many years, Microsoft was not interested in price discrimination based on geography, market segment, or per capita GDP. In this case, Microsoft’s intensive growth strategies currently prioritize market penetration. Microsoft sells to both individuals and organizations. Other than that, the Michael porter’s generic strategy is an advantage over the competitors gained by offering the customer greater value, either by provided the lower prices of great features of the product and services. The product was not ready for prime time. Market development supports business growth through the firm’s entry into new markets. All the companies that are leading in their respective industries like Microsoft, Apple, Starbucks and Nike have one or the other source of competitive advantage that has helped them build and sustain a larger market share than their competitors. New evidence in the generic strategy and business performance debate: A research note. Dess, G. G., & Davis, P. S. (1984). Sometimes product differentiation does not work. Miller, D. (1992). In this intensive strategy, the company grows by developing new businesses. It appears that Windows 7 was a success because it was a stable, fast, and friendly operating system. Prices are a critical part of your business strategy. Michael Porter’s generic strategies is a strategy where the company can implement the strategy as taking actions by create a defendable position is an industry. On the other hand, market penetration is used as the main intensive growth strategy to support Microsoft’s growth in a highly competitive global computer hardware and software market. Microsoft has enjoyed heavy growth in the recent years. As a major competitor in the co… In this case, Microsoft’s products are unique in terms of features, such as software products specifically designed for business organizations. Home Premium was priced at $199.99, Professional at $299.99, and Ultimate at $319.99. Merchant, H. (2014). This intensive strategy points to the strategic objective of enabling Microsoft’s growth through product innovation. In this strategy, there have three strategies th… There are four intensive strategies as outlined in the Ansoff matrix that can be used by any company for growing its market share and revenue. Configurations of governance structure, generic strategy, and firm size. Through the broad differentiation generic strategy, the company builds its competitive advantage to attract a large population of customers globally. Still, Nokia has entered gaming business and personal technology too. The generic strategy used by Microsoft to build a source of competitive advantage can be considered a mix of differentiation and cost leadership. However, its Nokia acquisition did not prove successful and was unable to provide any important value to the business or the organization. Behavioral segmentation is used for products like Microsoft Windows server operating system or for the Windows mobile phones. This is a very important factor since it has helped the brand build a differentiated brand image. Diversification (Supporting Strategy). He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers. Microsoft Corporation uses broad differentiation as its generic strategy for competitive advantage. It was difficult for them to engage in product and price differentiation because they were generating piles of cash as a monopoly. Students and individuals with low incomes are price-sensitive and will simply turn to piracy when the price exceeds their willingness-to-pay. Of late, Microsoft has also had to contend with Google’s foray into the online office application suite called Google Docs and IBM’s offering of open-sourced Linux-based applications. Since it has a very large customer base already, the brand is able to sell the new products it makes to the individual and organizational customers. Varadarajan, P., & Dillon, W. R. (1982). See our Privacy Policy page to find out more about cookies or to switch them off. Access2Markets has all you need to know about duties, taxes, product rules and requirements for all EU countries and over 120 other markets around the world. In such a situation for any company to build and maintain a strong market position, it is important to have one or the other competitive advantage. Microsoft Corporation uses product development as a secondary intensive growth strategy. This product line has kept growing and adding to Microsoft’s revenue. Microsoft is a monopolist in the operating systems arena and with their office suite of applications. They have, however, started to address the attack by introducing a cloud-based Office 365 and the Azure development platform. For instance, through unique business-specific computer products, the company initially entered overseas markets. This strategic objective highlights the importance of tangible and intangible attributes of products to ensure Microsoft’s competitive advantage. Market development is a supporting intensive growth strategy that has considerable but minimal impact on Microsoft’s current business performance. Microsoft Corporation’s generic strategy creates competitive advantage while enabling the business to maintain a broad market scope. In general, this strategy can be defensive and offensive towards their industry position. Similarly, there are Microsoft office and other software from the house of Microsoft that are available at affordable prices for both people and organizations. export guides Companies generally use these strategies to expand their customer and market base. Glazer, R. (1999). The windows operating system is found on most computers in this world. Intensive growth strategies: A closer examination. Demographic segmentation is used for products like Operating systems and Office products which are applicable to everyone. [74] Microsoft tried to differentiate the Vista operating system (see the snap shot of Windows 7 and Vista Versioning in Figure 5.6, “Windows 7 and Vista Product Differentiation”).

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