Question

For Microsoft Corporation Please provide a list of elements for each of the porters five force's- Rilvary and give them a rating all equal to 1 and state if it is highly attractive, mildly attractive, neutral, mildly unattractive, highly unattractive for the present and future ratings.

Answer 1

The attractiviness of an industry is determined by the profitability of a particular industry.If there are some profits in the specific industry,then it enables the entry of new players or vendors to acquire the share of the market.

Porters Force	Elements	Rating	Present	Future
Competitive Rivalry	The competition is very intense in the industry (Electronics and software) that Microsoft operates. There are many firms in the market that provide similar or same features as that of Microsoft’s products such as personal computers, hand held devices, operating systems etc. Many firms are employing price differentiation strategies to combat Microsoft and to acquire market share	0.5	Mildly unattractive	Highly unattractive
Bargaining power of Buyers	The bargaining power of buyers is low in case of software (PC operating system) as the switching costs are very high due to customers’ adoption of the software. The buyers have become used to the “user interface” of the Microsoft operating system. The same argument shall not hold true for the hardware segment. The buyers are becoming increasingly price conscious and are on the lookout for cheaper products that provide nearly same features and performance	0.2	Mildly attractive	Mildly unattractive
Bargaining power of Suppliers	The software is manufactured in house and hence does not require many suppliers. Hence their bargaining power is very low. However, in case of hardware there are many suppliers that provide electronic products to the company. These firms are very huge in number and hence do not have much bargaining power.	0.05	Highly attractive	Mildly attractive
Threat of New Entrants	In case of software industry, there are very few players that can provide similar features as that of Microsoft. Although there is a rise of SMEs that provide point solutions but they are not highly scalable. Hence this threat is low. But in case of hardware, there are many players that provide same or similar products with similar performance. Overall this threat is of Moderate level	0.25	Mildly unattractive	Highly attractive
Threat of Substitutes	The tasks and functions performed by the electronic devices and software systems cannot be easily replaced. Hence the threat of substitutes is very low.	0	Neutral	Neutral