Question

Porters Five forces Analysis for Microsoft Corporation need 5 examples and why used.

Answer 1

Microsoft Corporation’s Five Forces Analysis:

• Threat of new entrants: Low
  • There are high entry barriers
  • Customer base is very loyal for the existing companies
  • Cost advantage of the existing companies is high
  • Developing an enterprise needs advanced skills which is not easy to be found
  • The cost involved in developing a new brand in this sector is quite high
• Threat of Substitution: Low
  • There are a range of products offered by Microsoft Corp. which are difficult to beat
  • The software applications of the company are the industry’s favorites and can’t be replaced
• Competition Rivalry: High
  • Competitors vary in different product specialty of Microsoft Corp.
  • In software applications arena, The Company faces stiff competition from Apple, Cisco Systems, SAP, etc.
  • In cloud segment, VMware and IBM are the major competitors of Microsoft
  • Each company has a loyal customer base of its own
• Bargaining Power of Buyers: Moderate
  • The cost of switching software is moderate
  • Switching also requires learning the new software, so switching is generally not preferred
  • Good service offered by the company has established a loyal customer base
• Bargaining power of suppliers: Low
  • Software is mostly developed in-house; hence no role of suppliers
  • Large number of suppliers available for hardware production
  • Cost of switching supplier is low

The utilization of Microsoft products in business world:

• MS Office is one of the most widely used official software
• MS Excel is used in many companies to effectively manage its financials
• MS Office is a package that offers a number of varied services at an optimum price
• Microsoft services have ease of access and very good customer service, making it a favorite among corporates
• Microsoft software is very secure and effectively protects data