The company has roughly three strategic product divisions, including Windows division, server and tools, and online services division; business division; and entertainment and devices division. Each division performs its functions and plays an important part in the business development of the company. Microsoft relies heavily on each of its divisions. At the same time, the deterioration of the performance of either division allows the company to compensate losses by the improvement of performance of other divisions.
Windows division, server and tools, and online services division focuses on the development of Windows OS and related products, including software and internet applications. In fact, Windows division is the major division of the company which provides a large share of revenues of the company (Auletta, 163). As the company holds the dominant position in OS for PC market, Microsoft benefits from its leading position raising barriers to entry and increasing its revenues.
Business division includes Microsoft Office products. This division is also very important due to the high popularity of Microsoft Office and its strong position in the market. The company works on the improvement of Microsoft Office to keep customers interested in the products of this division.
The entertainment and devices division produces Windows CE OS for embedded systems and Windows Phone for smartphones. In actuality, the mobile devices’ market grows fast. Hence, Microsoft attempts to develop products to meet customers’ growing needs. However, Microsoft has been not very successful in the mobile devices’ market so far. In fact, the company has probably lost the momentum, when the mobile devices’ industry boosted and mobile devices overwhelmed the market.
The major rivals of Microsoft Company are companies operating in the high tech industry. In this regard, it is possible to distinguish the major rivals, such as Apple, Google and Linux. In fact, Microsoft offers a variety of products. Hence, the company has different rivals, depending on products the company supplies to the market. Nonetheless, such companies as Google or Apple offer multiple products as well as Microsoft and the competition between them grows tighter.
Apple is the major rival of the company, especially in the field of smartphones and mobile devices because Apple takes the lead in the industry due to its iPhone and iPad mainly, which have Apple’s software. Microsoft holds a weak position in the field of mobile devices’ software. On the other hand, Windows outpaces Apple in the OS for PC market.
Google expands its market in the field of internet applications challenging the position of Microsoft as the major supplier of software and internet applications. Google challenges the position of Microsoft but the latter still holds a strong position, while Google has to overcome barriers to entry set by Microsoft. Nonetheless, Google is another behemoth of the high tech industry and Microsoft Company has to pay a lot of attention to the elaboration of effective competitive strategies to stay ahead of Google.
Linux offers an alternative OS and software, which, in contrast to Microsoft, is normally free and users can use Linux OS and software free of charge. In fact, Linux cannot actually compete with Microsoft in terms of quality but the free software offered by Linux attracts many customers, who are ready to sacrifice quality for the sake of saving their money. In such a situation, Microsoft should consider introducing new strategies to keep customers interested in its products. In this regard, Microsoft may consider the possibility of changing its pricing policies because the company has already accustomed to its dominant position in the market. As a result, often Microsoft set unreasonably high prices for its products.