Applied Corporate Strategy Assessment Sample

Introduction Of Applied Corporate Strategy Assessment: Strategic Analysis Report

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Microsoft is a multinational company in the global gaming and technology industry in America. The company has its headquarters in Washington, and its products and services are available to almost every country worldwide. The company's revenue is $200 billion as per the Reports of 2022, through which it is considered in 14th place in terms of the world's largest organization (Microsoft, 2022). The study, in this case, provides brief information on the company's internal and external environment through which it can enhance the strategic planning to implement Activision Blizzard fr increasing the customer base.

External analysis

The industry's external environment includes the PESTLE and Porter's Five Forces, through which constant development and growth can be maintained. With the constant growth of the gaming industry, the competition among the companies is also growing, through which different threats and opportunities are created, which are further discussed in this particular session.

Pestle

Political

Issues with the Chinese government (Threats)- The US gaming industry is facing issues with the government of China through which the company's sales margin can be reduced in the current years. In this case, it was also noted through the study of Shaw (2020) that the government of China is not satisfied with the supply base of the industry through which various tensions like poor trade facilities are created among the US and China.

Figure 1: Supply chain issues in the US and China

Lobbying cost (Opportunities)- Various companies within the industry have hired lobbyists to enhance their brand image. This can further enhance the customer reach for Microsoft, through which it can achieve its scope in the short run.

Economical

Economic crisis (Threats)- The issues like changes in the labour laws and the rate of taxes on products can help to reduce the sustainability of the companies within the industry. This also impacted the growth of Microsoft as it is costly and reduces the company's profit margin (Shaw, 2020). The recession of the US economy after the pandemic period is also a massive challenge for the company because recovering from it is not an easy task.

Exchange rate (Threat)- The US dollar exchange rates might be low in other countries where the gaming or technology products are selling their products or services, through which the rate of retention on the investment of the companies can be reduced.

Figure 2: Exchange rates of dollar

Social

Changing culture of the individuals (Opportunities)- The change in the preferences of the individuals and the change in the preferences of the customers can affect the grits of the companies within the gaming and technology industry. But in this case, the managers of the companies shall always adopt new strategies in order to promote long term innovation in its internal structure through which they are able to satisfy the needs of the targeted audience base.

Shortage of professionals (Threats)- The shortage of the skillful engineers might be a huge turnoff for the industry through which it will be unable to maintain its scope in the competitive world. In this case, the improper availability of the skilled individuals or the professional can also lower the sustainability or customer retention within the industry (Shaw, 2020).

Technological

Rapid innovation of technologies (Opportunity)- With the constant innovation of advanced technology such as artificial intelligence, the growth of the industry can be sustained because it will be able to address the changing needs of the customers. Apart from this, artificial intelligence can also be helpful to analyze the needs of the customers within the real time data efficiently (Ferguson, 2017).

Figure 3: Technological development in the gaming industry

Automations of the operations (Opportunity)- The managers of the companies operating within the industry are able to automate the operations with the help of advanced technology such as robots through which constant growth and development can be maintained appropriately.

Legal

Increase in the regulations due to electronic waste (Opportunity)- The increase in the strict rules generated by the government of the US, like complete reduction in the electronic wastes can be helpful for the companies within the industry to lower the waste of their raw materials as well as finished products. It can also help companies like Microsoft to address the recent challenges in the social environment in terms of pollution through which their brand image can be enhanced for an extended period (Ferguson, 2017).

Improvement of patent laws (Opportunity)- The improvement of the patent laws can be helpful for the companies in the gaming industry to enhance its global emergence as it can reduce the issues persistent to the software piracy. It can also address the issues of cyber attack through which the companies will be able to store the customer data without any misconduct which can further enhance the retention of the targeted client base.

Environmental

Increase in the use of eco-friendly products (Opportunity)- It is an opportunity for the industry as the companies will be able to maintain proper growth and development and can even help to implement the aspects of corporate social responsibility efficiently (Ferguson, 2017).

Availability of the recycle devices (Opportunity)- The industry can also be able to achieve proper sustainability in the competitive world through the availability of the recyclable materials through an overall decrease in the operational with simultaneous increase in the profit margin.

Porter’s five forces

Threats of new entrants (High)- The threats of the new entrants in the industry is high as constant development is noted in the manufacturers of the graphic software. Thus various companies want to join the industry and earn a sustainable profit through which the issues of poor profits are earned by the existing companies such as Microsoft. The segment in this case, in which the companies want to join the industry is particularly high through which the expenses of the existing companies can be increased over time, and it might be difficult for them to retain the customer base (DePersio, 2023).

Threats of the substitutes (Weak)- The threats of the available substitutes are weak because some of the top brands manufacturing a particular product can not be available at different companies through which the switching cost of the customers are lowered over a particular time being (DePersio, 2023). The external factors such as the political matters of the US also lowers the availability of the substitutes within the industry as the company fears to lose its positions and investment in the competitive world.

Bargaining power of buyers (Moderate)- The poor availability of the substances within the companies of the industries lowers down the bargaining power of the customers a bit through which desired stability is achieved. However, the changing needs of the customers due to the political or the technological factors might be a serious threat to the industry as the companies like Microsoft can note a constant downfall in their consumer base (DePersio, 2023). The companies like Microsoft however found this power low as they have some gaming and computing models which are not found by any other companies within the particular industry.

Bargaining power of suppliers (Moderate)- As the size of the suppliers within the industry are low, the company is able to reduce the bargaining power of the distributors through which the issues of extensive rise in the operational cost can be reduced (Ferguson, 2017). In this case, the managers of some companies within the industry have also designed the price structure of their products for their needs in which the suppliers have no contribution at all. The wide array of the products in the industry also reduces the bargaining power of the suppliers through which the cost of doing the business can be maintained properly.

Competitive rivalry (Strong)- The diversity of the products and services provided by the companies in the industry makes strong competition through which the constant changes are required by the firm’s infrastructure. Apart from this, the video game industry users also have ahigh brand loyalty through which a strong competitive edge is maintained by the company so that they are able to achieve their desired goals (DePersio, 2023). The companies like Microsoft in this case, need to implement new strategies and workforce over the time being with the changes in the needs of the customers or the trends in the marketplace through which they are able to enhance their sales or revenue for an extended period (Ferguson, 2017).

Internal analysis

Resources

• Intangible resources:

Goodwill (Strength)- Goodwill of the company is a strength because it costs over $50 billion and a constant increase in the goodwill of the company has been noted over the past few years. For example, the company have been able to increase the value of its goodwill by 1.23% as per the reports of 2019 which was further increased by 5% in the current period (MSFT, 2023).

Figure 6: Increase in the goodwill of Microsoft

(Source: MSFT, 2023)

Brand image (Strengths)- As the company in various countries all over the world including America, India, Japan, China, Australia, Africa, etc which has the most population it has been able to maintain a high brand image among the competitors of the industry. Apart from this, due to the constant development of products and services in the company as per the changes in the needs of the potential audience such as the innovation of Xbox console games and the Contoso Application has further helped the company to increase the customer base and the brand image at the same time (Microsoft, 2023). A wide range of the products or services provided by the company including the advanced software have also contributed to the growth of the company over a particular time being through which it has been able to stand a step ahead of its competitors in the marketing environment.

• Tangible:

Skilled laborer (Strength)- The company has a wide base of diversified employees who are able to maintain constant development and creativity in the workplace through which it is able to address the recent challenges in the marketing environment (Microsoft, 2023). Apart from this, the diverse workforce of the company is also able to maintain a proper innovative strategy as per the requirements of the customers through which high experiences of the customers are maintained in the company for an extended period. In association with this, as per the training sessions of the company's managers, the team members are also able to develop the relevant soft skills through which they are able to stay committed towards the common goal and align their performance with the goals of Microsoft efficiently.

IT team members (Weakness)- The IT departments of the company also has exclusive technologies through which the constant changing needs of the customers are analyzed and stored for the manufacturing or the marketing departments so that Microsoft is able to give a tough competition to the company’s existing or new in the industry all over the US. The IT team needs to develop their skills because they are unable to enhance the innovation strategy of the company through which proper retention and attraction of the customers are maintained for the long term (Microsoft, 2023).

Physical:

Manufacturing department (Strength)- The manufacturing departments of the company have also been able to use the agrochemicals through which the application of machine learning by the team members are done appropriately. This has further helped to develop the profit jargon of the company after the pandemic period efficiently (Microsoft, 2023). It has also helped the company to maintain the privacy policy of the customers through which their satisfaction has been increased.

Capabilities

1. a) Value chain analysis

• b) VRIO

High quality of products manufactured by Microsoft From the above table it can be evaluated that the core competence which can help the company to grow in the current and the future time. The current version of the word and excel documents in this case, are more advanced which can listen to the voice of the users and help them to type through which the attraction of the customers is enhanced by almost 50% (Microsoft, 2023). Apart from this, the visio 2010 generated by the company is also useful to gain the customers because it has additional features like HD painting which both young generations or the adults can use. The innovations of products like the new kinder, which is a gentler version of its old product, have also been able to enhance the competitive advantage of the companies such as Apple because it has widespread access to AI, and the students or the young ones can read online books on the product easily (Bort, 2019).

Strategy evaluation

This section will include the SFA matrix for the launch of Activision Blizzard with the help of three different aspects: the stability of the marketing strengths and opportunities, feasibility which determines the interest of the customers in the launch of the product and the acceptability of the customers in terms of the innovative product.

Suitability

TOWS analysis

The reason behind Microsoft acquiring Activision Blizzard is a high gaming experience for both young and old gamers, through which they will be able to stay loyal to the company for the long run. In this case, immersive AI has been used by the company to reduce the threats and weaknesses so that it can gain new customers from all over the world.

Acceptability

Power and interest matrix

The government of the US is the key player for the launch of Activision Blizzard because it can change the policies and the tax rates at any point in time through which the company's profit margins can be reduced. Apart from this, the company also has to track the employees because they are the primary resources who can help implement and associate Activision Blizzard appropriately. Lastly, the customers are also crucial for the company because if they are not satisfied with the innovative product, it might become a big turnoff point through which the rate of return on the investment can be reduced.

Feasibility

As Microsoft is acquiring Blizzard with an investment of $95 per share, it can help to maintain a smooth flow of income within the company through which it will be able to enhance its expansion in emerging economies and generate more products to become the world's largest multinational company within the gaming and technological industry (Microsoft, 2023). However, the CEO of Microsoft has decided that Bobby Kotic will serve as the CEO of Activision because he has the right idea about maintaining his team through which the company can grow over time without any issues or misconduct. Concerning this, the increase in the company's investment in cyber security can also help provide a world-class gaming experience to enhance customer attraction.

Conclusion

It can be concluded through the study that the company can acquire Activision Blizzard, but specific changes, such as hiring new team members for the IT departments, can be used by the managers of the company to discard the issues or risks of misconduct, which can further promote its competitive advantage for the long term.

References

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