Microsoft Corporation: The Introduction of Microsoft Works

Mohit Sharma (400807016)Nimish Mittal (400807017)

Pawandeep Singh (400807020)

Contents• Introduction• Situation Analysis• Global Brand Strategy• Standardization vs Adaptation• Concept Testing• Product Customization• Local Adaptation• Global Product Strategic

Options• Time of Market Entry:

Waterfall vs Sprinkler Strategy

• Segmentation & Targeting• Positioning• Special Product Policy:

Global marketing of service

• Testing Market• Protecting brand names:

Intellectual property issues

• Conclusion

Introduction

• How Microsoft to launch their new product Works

• To decide how to position Works globally• Microsoft had to respond to the requests from

different country managers’ request on demanding “product features” that could make their sales excellent and competitive to the market

Situational AnalysisSWOT Analysis

Strength• Brand Image• Product Competence• Proven Financial performance• Good experience in management

teams

Weakness• Lack of International experience• Although 41% international sales,

but no mature global product policy

Opportunity• Good market potential• Significant growth in long run• Reduced time and cost due to

standardization

Threat• Leading competitors• No use of copy protection• Short International Product Life

Cycle (IPLC)• Counterfeit products

Situational AnalysisPorter’s Five Forces Model

Competitive forces were

tough

No supplier force

restriction

Customer forces relied

on its distribution

networks

No advanced

substitutes

Initial, switch and exit costs were low

Global Branding Strategies

• Umbrella branding– Brand history– Competitive climate– Cultural receptivity– Penetration in the software product category and

usage– Differentiated– High brand loyalty, name awareness, and

perceived quality

Standardization v/s Adaptation

Standardization• high costs of adaptation – no really • convergence and similar taste in diverse

country markets – no• predominant use in urban environments - no• marketing to predominantly similar

countries – no really• centralized management – no• scales of economy in production, R&D and

marketing – partially yes• meeting competition when competitors

produce standardized product – no• consumer mobility – no exactly• if positive home country image (C-O-O)

effect exist – yes, brand name is the most important

Adaptation• different in technical standards – some true, but

some untrue• primarily consumer and personal use products –

yes• variations in consumers needs – yes• variations in conditions of use – yes• variations in ability to buy, differences in income

levels – yes• variation in technical sophistication, skill levels

of users – yes• strong cultural differences – yes• local environment-induced adaptation,

differences in raw material availability, government requirements and regulations – not exactly

• use by competitors – yes• variations in national habits – yes

Hofstede’s cultural dimensions

Country National Innovative-ness Individualism Uncertainty

Avoidance

Great Britain 0.89 91.48 42.22

Netherlands 0.70 83.70 63.33

Sweden 0.59 74.81 32.22

France 0.35 71.11 88.33

Germany 0.07 68.88 68.88

Italy -0.71 74.81 75.55

Spain -0.85 51.85 87.77

Portugal -1.2 27.40 107.22

Conjoint Analysis of Microsoft WorksCountry Low

EndInternational Version

Compatibility features Perception

Low price or price sensitivity

Simple to use & sell concept

Suggested price (US$)

Forecast(Monthly sales)

US -0.12 0 0.53 0.61 3.00 195 6000

Canada 0.13 0 0.53 -0.61 3.00 215 500

England 0.32 1 0.53 -0.61 3.00 215 1000

Australia / New Zealand

0.32 1 0.53 -0.61 3.00 215 380

France (L) 0.15 0 3.00 1.16 0.30 254 650

West Germany

0.07 1 1.96 0.00 0.00 273 200

West Germany (L)

0.07 0 1.96 0.00 0.00 273 500

Conjoint Analysis of Microsoft WorksCountry Low

EndInternational Version

Compatibility features Perception

Low price or price sensitivity

Simple to use & sell concept

Suggested price (US$)

Forecast(Monthly sales)

Italy 0.38 1 2.32 1.78 0.79 244 50

Italy (L) 0.38 0 2.32 1.78 0.79 244 160

Netherlands 0.30 1 1.66 3.00 1.97 224 80

Netherlands (L)

0.30 0 1.66 3.00 1.97 224 200

Portugal 1.50 1 4.01 3.24 -5.51 220 25

Portugal (L) 1.50 0 4.01 3.24 -5.51 220 80

Sweden 0.15 1 0.00 2.39 0.79 234 100

Sweden (L) 0.15 0 0.00 2.39 0.79 234 200

Spain 0.875 1 2.97 2.39 -2.26 234 50

Spain (L) 0.875 0 2.97 2.39 -2.26 234 200

Product Customization

• Core – product approach– Microsoft should adopt the core-product approach that

started with design of mostly uniform core-product domestic version of Works and then added attachment that might fit local needs like the special features “toggle switch” and conversion program.

– International version of Works fit for the local habits and customs. And finally fit the local language, user manual, and its packaging and documentation.

– Such approach could save a lot of costing that came from the centralizing the production of the core.

– The success would be due to the easy product modification.

Organizational Structure

• umbrella strategies • strength of control the technical competence • decentralized power to the local teams • own resource

Product Standardization

• high volumes, capitalize on economies of scale and the experience curve, and achieve the lowest possible costs per unit

• consistent company image• shared needs amongst those computer

consumers that demanded similar products• scale of economies

Local Adaptation

• Difference in countries and language• Difference in hardware• Difference in price sensitivity• Difference in local habits & customs• Difference in package and documentation• Difference in Microsoft’s competitive position

and corporation image

Global Product Strategic Options

• For US & Canada– product & communication extension strategies

• In other international countries– product adaptation– communication adaptation

Time of entry

• Sprinkler Strategy• Waterfall Method• Time of Entrty.docx

SEGMENTATION AND TARGETING

Software Category SegmentationCompany Name

Worldwide sales in 1986 ($ millions)

Name(s) of few leading products

Category of software products

Expected sales of individual software

Lotus development

283 1-2-3SymphonyJazz

GP spreadsheetGP integratedGP integrated

94.394.394.3

Microsoft corp.

260 DOSExcelWord

SS OSGP spreadsheetGP word processor

86.786.786.7

Ashton - Tate 203 Dbase 111FrameworkMultimate

GP databaseGP integratedGP word processor

67.767.767.7

Word perfect 52 WordperfectExecutive

GP word processorGP integrated

2626

Software Category SegmentationCompany Name

Worldwide sales in 1986 ($ millions)

Name(s) of few leading products

Category of software products

Expected sales of individual software

Autodesk 50 AutoCADCAD Camera

SP Computer AssistedDesign Product

25

25Borland 38 SideKick

Turbo PascalGP OrganiserSS Language

1919

Micropro 36 WordstarWordstar 2000

GP word processorGP word processor

1818

Digital Research

26 CP/MGEM

SS Operating systemSS Operating system

13

13Software Publishing

26 PFS: WritePFS: FileFirst Choice

GP Word ProcessorGP DatabaseGP Integrated

8.78.78.7

Targeting

Niche program 69

GP database 76.4

SS operating system, environ & language 131.7

GP Spreadsheet 181

GP Word Processor 225.1

GP Integrated 291

Segment this

portion 30.5%

Segmentation by different aspects & Microsoft’s target

Computer Hardware Environment

Usage Situation Customers’ Depth & Clarity of software needs

Country & Language

IBMPC or PC compatible

XT

AT

PS/2

Small Business

Large Business

Professional

Home

Hobby

Scientific

Technical

Education

Depth

Breadth

New Users

DomesticOne byte language like English, French

and German

Two byte language like Japanese or Asian countries

Positioning

• Macro integrative and simple software• Integrative, compatibility and flexibility• User-Friendly, Harmonious & Integrative for

Eternal PC users• Microsoft Works – An Integrative solution for

The simple harmonious family

Difference between perception & expectationHardware Competitive

position & corporate image

Importance of target market segments

Price Sensitivity

Other difference

PC – clone

English type

Non – English

Keyboard, printing

program & user manuals

Easy to learn and use

The software of simple life

Software with a future

Pioneers in compatibility

Power and simplicity together

Public A/CingBanking

Fin. ServicesArchitectureConstruction

Engg.Medical/Dental

LegalHomeOther

Highly

Moderate

Less

Local habits, customs & formats:

Dimension unitStandard size of

paper

Time & DateCurrency

Copyright protection

Packaging and documentation

Special Product Policy

• Global marketing of services– establish its own global service– global service marketing strategies– standardized software training– customized training course– claimed back – Information Technology– BBS (Bulletin Board System) service– real time communication– “IT complaint box”

Testing Market

• trial version (or version) of international or domestic one could be sent to the global dealers for market testing

• The new features or the compatible features could be tried with the dealers

• A prompt response through BBS could be obtained to lead Microsoft to see any bugs inside the software or convert a better product design. Of course such trial version would have a limited usage date that the dealers had to continuously buy the software.

Protecting brand names

• Intellectual property issue– In order to have higher brand equity of Microsoft,

the legal aspects such as copyright would be valid in US. However, other strategic options against piracy should be used, communication options like legal copies and licenses to avoid imitations. Microsoft did not use copy protection because it encourage the diffusion of Works usage in the lag countries. In certain maturity of time, legal actions would be taken to force the customer to buy the licenses.

Conclusion

• adopt core-product approach • quick to launch in the domestic market• Compatible design• Sprinkler and waterfall approaches• product & communication adaptation options• massive segment of general purpose integrative package• “user-friendly, harmonious & integrative for eternal PC

users”• “The integrative solution for the Simple Harmonious

Family”

Thank You