Microsoft Corporation’s Generic & Intensive Growth Strategies

Microsoft Corporation generic strategy, competitive advantage, Porter’s, intensive growth strategies, objectives, computer software case study analysis
A stone sign at an entrance to Microsoft’s Redmond, Washington campus. Microsoft Corporation’s generic strategy (Porter’s model) and intensive growth strategies support competitive advantage of the computer hardware and software business. (Photo: Public Domain)

Microsoft Corporation’s generic strategy for competitive advantage is aligned with the company’s intensive strategies for growth. Such alignment optimizes organizational performance. A company’s generic strategy indicates the general approach to ensure business competitiveness. Microsoft’s generic competitive strategy supports the attractiveness of its computer hardware and software products amid a wide variety of competitors. On the other hand, a company’s intensive strategies for growth presents the approaches used to ensure business growth and development. In this case, Microsoft’s intensive growth strategies currently prioritize market penetration, while the rest of the strategies have a supporting role in the computer hardware and software business.

Microsoft Corporation’s generic strategy creates competitive advantage while enabling the business to maintain a broad market scope. 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’s Generic Strategy (Porter’s Model)

Microsoft Corporation uses broad differentiation as its generic strategy for competitive advantage. Broad differentiation involves unique products sold to a wide variety of customers. In this case, Microsoft’s products are unique in terms of features, such as software products specifically designed for business organizations. Also, this generic competitive strategy is broad in the sense that the company sells its products to various market segments. For example, individuals, households and organizations buy Microsoft’s software and hardware products. Through the broad differentiation generic strategy, the company builds its competitive advantage to attract a large population of customers globally. This generic strategy also aligns with Microsoft’s mission and vision statements, which emphasize capturing a global market.

A strategic objective applicable under Microsoft’s broad differentiation generic strategy is to develop business competitive advantage through continuous product innovation. This strategic objective is crucial to long-term success, considering that Microsoft operates in a rapidly changing and highly dynamic industry. Uniqueness of product design is another strategic objective linked to the broad differentiation generic strategy. This strategic objective highlights the importance of tangible and intangible attributes of products to ensure Microsoft’s competitive advantage. For example, the company can develop new computer hardware and software products that are difficult to copy because of its specificity to the Windows operating system.

Microsoft’s Intensive Strategies (Intensive Growth Strategies)

Market Penetration (Primary Strategy). Market penetration is the primary intensive strategy that Microsoft uses to grow its business. This intensive growth strategy involves selling more products to the markets where the company currently has operations. For example, the company grows by intensifying its marketing and sales in its current markets in Asia. This intensive growth strategy is responsible for Microsoft’s global dominance in the IBM PC-compatible operating system market. The company effectively applies market penetration through the broad differentiation generic strategy, which uses product uniqueness to attract more customers from various market segments. A strategic objective based on this intensive strategy is to ensure Microsoft’s growth through aggressive sales and marketing.

Product Development (Secondary Strategy). Microsoft Corporation uses product development as a secondary intensive growth strategy. This intensive strategy facilitates growth based on the development and sale of new products. For example, Microsoft continually develops new software products to generate higher revenues. Through new products that address market needs, the company supports its generic strategy, which requires product uniqueness as a competitive advantage. This intensive strategy points to the strategic objective of enabling Microsoft’s growth through product innovation.

Market Development (Supporting Strategy). Market development is a supporting intensive growth strategy that has considerable but minimal impact on Microsoft’s current business performance. Market development supports business growth through the firm’s entry into new markets. For example, in its early years, Microsoft applied this intensive strategy to sell its computer software products outside the United States. However, considering that these products are already globally popular, market development is no longer as significant in the company’s growth. The generic strategy of broad differentiation empowers Microsoft in applying market development as an intensive growth strategy. For instance, through unique business-specific computer products, the company initially entered overseas markets. A strategic objective linked to this intensive strategy is to grow Microsoft by entering new markets, likely in developing countries or regions.

Diversification (Supporting Strategy). Microsoft Corporation considers diversification as a supporting intensive growth strategy. In this intensive strategy, the company grows by developing new businesses. For example, Microsoft diversified its business when it acquired Nokia’s devices and services division to re-enter the smartphone hardware market. The company can effectively apply this intensive growth strategy through new product development in new business ventures, based on the broad differentiation generic strategy. A strategic objective based on this intensive strategy is to facilitate Microsoft’s growth through mergers and acquisitions.

References
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  • Microsoft Corporation, Form 10-K.
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