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Competition Analysis of the Microsoft Phones

Microsoft Corporation is a corporation that involves in the production of computers as well as technological products. The computer market is very competitive. The company started with offering software products, and as it grew, it added some new products to its list of products. Adding new products to its list meant that its scope of operation expanded. One of the most significant developments in the company is the manufacture of mobile phones. The development has placed the company in the right position in the market of communication devices. Notably, the industry has welcomed changes that arise from the introduction of new companies offering similar products such as Apple, Samsung, LG and Blackberry among others (Miller, Robinson, Lawrence & Institute of Medicine (U.S.), 2006). The competition has resulted in the creation of a competitive market and more innovations have come up with the aim of meeting the customer demands.

It is worth noting that the competition is very healthy since customers have a variety of choices in the market. Since customers have a variety of mobile devices to choose from, the customer base for Microsoft Company is very erratic. It has become a challenge and therefore, seeking the preferences of the customer in the marketplace is a necessity. The customers prefer the phones that have the latest features that can keep them updated and connected to the rest of the world as well as their friends at all times. The other companies such as Apple have instigated these changes in the customer preferences by setting the pace in manufacturing phones that serve the purposes of personal computers (Miller, Robinson, Lawrence & Institute of Medicine (U.S.). 2006). Pacesetting is a market characteristic that customers consider as the number one aspect to evaluate the efficiency of the mobile devices that the company produces. In this way, the high levels define the expectations that the customers will have in mobile phones manufacturing companies. Notably, the Nokia Lumia, a unique mobile phone for Microsoft has been considered to be one the most sophisticated mobile phone in the market because it has been fully accepted by customers who like its feature and functionality similar to the iPhone that is a product of the Apple Company.

International Trade Opportunities

Several opportunities are available in the international arena for Microsoft Company especially for its products of mobile phones. In the first case, there are regions that most of the technology companies have not explored and invested in. Notably, regions in Africa where the use of phone and technology is readily being accepted are the most potential regions to have customers who purchase these high tech devices. In one way, Microsoft is a communications company that provided software that facilitates the communication between people in different countries. In reference to the connecting aspect, Microsoft can first begin with the introduction of projects that will help the local people in these unserved areas. Some of the projects include the creation of community self-help groups, building schools and providing facilities for these institutions (Fleisher & Bensoussan, 2015). Through these means, the communities that have benefited from these projects can become customers of phones that are made by Microsoft.

Apart from engaging the local communities in the unserved regions, the Microsoft has an advantage of easily engaging in the sponsorship activities with different governments. In this way, the governments that are sponsored in some projects by Microsoft will willingly purchase phones for the employees of the various governmental institutions. Investing in this kind of relationship is healthy because the company will be in the position to establish ground in these nations while gaining a loyal customer base and then gradually to get more customers as the countries develop into wealthy states. In the recent years, Microsoft Company has engaged in the acquisition of many companies. Notably, the following companies have been acquired by Microsoft:

Acquired Company Year of  Acquisition
Visio Corporation 2000
Navision 2002
aQuantive 2007
Fast Search & Transfer 2008
Skype 2011
Yammer 2012
Nokia 2013
Majong 2014
LinkedIn 2016

 

According to the acquisitions that the company has done from the year 2000, it is evident that the company can now boast of a competitive market. Some of the acquired companies have apps with features that appear in every smartphone that is produced in the current phone manufacturing industry. This is an indication that Microsoft phones will have apps that are well managed because they are all from the same company. For customer dealing with the same company when they have issues of application compatibility with their phones, it is convenient. However, the other companies that use these apps in their phones will have to consult Microsoft Company in order to make the apps to be compatible with their products (McEachern, 2013). This will help the customers to prefer Windows and Nokia phones which are products of Microsoft Company.

Factors That Will Affect Demand, Supply, and Prices of Microsoft Phones

Currently, the economy is very competitive. The competitive nature of the economy has brought about a trend that makes multinational organizations to be considered as the cash cows. It means that the demand for their products and prices are extremely high and because customers are in dire need of sophisticated phones, they opt to purchase the phones at high prices without complaining (McEachern, 2013). The customers understand that they will be in the position to efficiently use the apps on the Microsoft Phones in comparison to phones produced by other companies in the industry. Identifiably, the factors that will affect the demand, supply and the prices of the Windows and Nokia phones include:

Developing countries

As per research conducted about the sales of mobile phones, the sales of smartphones in nations that are in the process of developing skyrocketed (Fleisher & Bensoussan, 2015). In this connection, the sales in these countries that are listed as the third world nations will portray the same trend because the demand will increase in a similar manner when the Nokia and Windows phones are introduced into this market.

New models of phones

As noted from the customers of different products, the introduction of a new model of a product into the market increases demand and the prices skyrocket while supply increases (Fleisher & Bensoussan, 2015). It is evident that new models of phones are observed as ways making individuals appealing to the society as well as a need for sustaining the competitive advantage of the business in their marketplace. The customers in the market will be ready to discard their old phones to access new ones with the aim of enjoying the new features and services that the new phones offer. Essentially, Nokia and Windows phones will be among the products that will have shifts in demand, prices, and their supply into the marketplace. The preference for Microsoft Company’s phones by customers in the market will be great because the new products have features of computers installed in them. Therefore, sometimes business people will enjoy accessing their data through the Nokia and Windows phones rather than using their large computer that is heavy and big to carry around. In this way, the customers will largely help in determining the demand for the Windows and Nokia phones while defining some supplies to be done and the prices in comparison to their competitors.

Factors That Will Affect Total Revenue

In the marketing of the Microsoft phones, the total revenue that will be earned by the company through these products will be significant. The formulation of graphs that will indicate the figures that are expected is important as well. As discussed earlier in this discussion, the demand and supply will be determined by the preference of the customer. It implies that the direct effect on the sales will be evident due to either low sales in the market (McEachern, 2013). The application of the right marketing strategies will help in increasing the supply and demand of the Windows and Nokia Phones and thus the total revenue as well.

Price elasticity of the demand will determine the total revenue that will be collected from the sales of the Microsoft phones. The understanding fostered from price elasticity of demand is that the change in the quantity of the phones and the change in the price (Varghese, 2011). Therefore, in this case, price sensitivity is entirely steered by the quantity and therefore, affecting the total amount collected at the end of the sales activity.

Factors That Influence Productivity

The understanding derived from productivity in the corporate world is embedded in the measure of the output when compared to the input of the stakeholders per unit (Fleisher & Bensoussan, 2015). As a result, the labor and capital used in making the phones and any activity that involves the use of finances will be compared to the total revenue that the company will collect. In this way, the availability of a surplus of the amount from these activities is a determinant of the productivity that the company has attained through the sale of these phones. There are several factors that affect the productivity of the company in the phone market.

Labour

The selection of the right people for the job of advertising and selling the phones might turn out to be a challenge because the competitors might be offering mouth-watering deals for them (Varghese, 2011). Therefore, the number of employees in the company will be smaller than those required to handle the sales. On the contrary, the need to have control of the employees by recruiting enough help in maintaining the sales and productivity of Microsoft and its phone products. An increased number of employees means that the workload and the efficiency increase.

Finances

Microsoft Company will be required to use the available funds to invest in more production, supply, and provision of materials to the whole management process (Varghese, 2011). In this way, the company will run smoothly. The availability of funds helps the management to stay confident that productivity will keep at high levels.

Input Materials and Time

The right strategies of marketing through using the appropriate quality means of advertising is necessary. The materials being used should have substitutes so that if they are depleted they can be replenished and replaced if they malfunction.  Time is a significant factor in all of these process and thus a schedule that indicates the timeline within which the sales will be done should be clearly outlined. The time will help in the quick and perfect execution of the production and sales so that the productivity of the company increases.

Various Measures of Costs, Including Opportunity Costs

For Microsoft Company to enjoy the opportunity costs that are available in the market, the company can implement the use of capital structure, and the degree at which the lender are compensated can be applied (Fleisher & Bensoussan, 2015). Measuring opportunity costs can also be measured by the use estimating the leveraging power of the debt that can be obtained to make the venture of selling Microsoft phones a successful and profitable venture.

Government Public Policy and Their Effect on Marginal Revenue and Marginal Cost

Engaging in sales on an international level is a sure way of making the Microsoft phone selling venture a success.  However, the marginal revenue might be reduced to some extent because of the different policies of different governments that exist in in the different countries of operation. In this case, the government policies which include the levies imposed on the imported phones of Microsoft Company. The levies result in the increased marginal costs and thus a reduced marginal revenues. However, the company can take advantage of the market by engaging in corporate social responsibility to compensate for the marginal costs spent.

Recommendations

The business venture can be developed with a view to maximize the potential for profit-making. The introduction of new prices that are friendly to a large population in the developing countries will see many customers opt to purchase the Microsoft phones. The prices can reduce considerably so that at least a profit is realized by creating demand.

Additionally, the company should take advantage of fully integrating the apps for the companies that it acquired in the phones. The integration will ensure that the phones provide a wide fascinating experience to the customers especially in keeping touch with their workmates, employees, managers as well as students. As a result, the experience will increase the application of these phones in all fields and thus more phones will be produced and supplied into the market.

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  1. Fleisher, C. S., & Bensoussan, B. E. (2015). Business and Competitive Analysis: Effective Application of New and Classic Methods.
  2. McEachern, W. A. (2013). Microeconomics: A contemporary introduction. Mason, Ohio: South-Western.
  3. Miller, W., Robinson, L. A., Lawrence, R. S., & Institute of Medicine (U.S.). (2006). Valuing health for regulatory cost-effectiveness analysis. Washington, D.C: National Academies Press.
  4. Varghese, J. (2011). Competitor analysis: Working paper.
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