Consulting Methods

Team 1.2

BreaOliver

Anastasia Narolskaya

Gaurav Agarwal

SCQ

WorkPlan

IssueAnalysis

Final Presentation

Consulting MethodsCEO's DilemmaApril 20, 2011

Situation

Complication

Key Issue

Is Microsoft able to satisfy customer needs and innovate software quickly in response to its diminishing market share in order to remain a personal computer market leader?

SCQ: Microsoft

• Market leader in personal computer software• Losing Market share to Apple in the United States• Stock price remains relatively stable over last 10 years• Stable profit margin and operating margin• Recently entered mobile market with windows phone software for mobiles• Huge stable market share in emerging market Asia with 98%• Microsoft operates 7 divisions of the company• Profit of nearly $19 Billion in 2010• Microsoft software can be installed on many devices• Firmly holds the business software market

• May be Windows is trying new software too fast• Possibly previous users are moving due to dissatisfaction or possibly due

to the usability from Apple phones to Apple computers and software• Producing software for the competitor may raise conflicts for the market

share• Possibly Microsoft is responding to competition by directing its focus on

the B2B markets over the B2C market

• Is Microsoft able to satisfy customer needs and innovate software quickly in response to its diminishing market share in order to remain a personal computer market leader?

Team 1.2

Brea Oliver


Gaurav Agarwal

2

Issue Analysis: Microsoft

Is Microsoft able to satisfy customer needs and innovate software quickly in response to its diminishing market share in order to remain a personal computer market leader?

Does Microsoft have the capabilities to innovate at the speed and quality of

competitors?

Is it sustainable in the personal computer market for Microsoft to focus mainly on B2B?

Does producing software for competitors increase market share enough to cover loss

to competitors?

Do they have the resources to create

quality software quickly?

Does Microsoft understand the

customers' needs?

Does producing compatible software create more

profit than not producing compatible software?

Is it more profitable for Microsoft to not

develop its own personal devices?

Do B2B products bring more quality to

the personal computer market than personal

products alone?

Do B2B products bring

profitability to the personal computer

segment of Microsoft?

1 2 3

1.1 1.2 2.1 2.2 3.23.1

• Find financial data for R and D

• Find quality process for R and D

• Find testing process

• Research on customer satisfaction through interviews

• Present data for future technologies

• Compare profitability of software sales alone to computer + software sales

• Show customers who following progression of iphone, ipad are moving to Apple computers through usability through surveys and secondary research

• Show profit potential profit of Microsoft phone with Microsoft software through focus group and Demo

• Find the profitability of the products from 3.1

• Find innovative projects for personal use by Microsoft list of products and their uses including research projects

• Show how these products are for personal use over business use by demonstrating the needs that the product satisfies

Team 1.2

Brea Oliver


Gaurav Agarwal

3

Determining if Microsoft can maintain its market leadership by transforming customer dissatisfaction and targeting its diminishing share of the market will take 24 weeks.

Work Plan: Microsoft

Team 1.2

Brea Oliver


Gaurav Agarwal

4

*note that the assigned task members are not those of the team 1.2 but instead are our Junior Consultants

Module Assignment Assigned to* 1/2 3/4 5/6 7/8 9/10 11/12 13/14 15/16 17/18 19/20 21/22 23/24

1.1Find financial data for R and D

DOS

1.1 Find quality process for R and D DOS

1.1 Find testing process DOS

1.2Research on customer satisfaction through interviews

VistaExcel

1.2 Present data for future technologies Vista

2.1Compare profitability of software sales alone to computer + software sales

Explorer

2.2

Show customers who following progression of iphone, ipad are moving to Apple computers through usability through surveys and secondary research

BingCloud

2.2Show profit potential profit of Microsoft phone from software provider for mobile over producing a Microsoft mobile

Office2010Group (6)

3.1Find innovative projects for personal use by Microsoft list of products and their uses including research projects

Media

3.1

Show how these products are for personal use over business use by demonstrating the needs that the product satisfies, through survey

Media

3.2 Find the profitability of the products from 3.1 Media

Team 1.2

Brea Oliver


Gaurav Agarwal

5

1. Microsoft can meet customer needs through better quality control and testing processes.

2. Although some market share is being lost Microsoft is able to cover this loss through its supply of software to competitors and compatible products.

3. Through focusing products on personal uses first rather than trickled down products from business, Microsoft can regain its market leadership in the personal computer segment.

YES, Microsoft is able to satisfy customer needs and innovate software quickly in response to its diminishing market share and it CAN remain a personal computer market leader.

Executive Summary: YES, Microsoft is able to satisfy customer needs and innovate software quickly in

response to its diminishing market share and it CAN remain a personal computer market leader.

Microsoft can meet customer needs through better quality control and testing processes

Team 1.2

Brea Oliver


Gaurav Agarwal

6

1.1 Microsoft has financial as well as knowledge resources to support Research and Development innovations with high quality.

1.2 Not only does Microsoft understand customer needs, it satisfies them.



Team 1.2

Brea Oliver


Gaurav Agarwal

7

Microsoft has financial as well as knowledge resources to support Research and Development innovations with high quality.

Microsoft Research has more than 800 researchers, including some of

the world’s finest computer scientists, sociologists,

psychologists, mathematicians, physicists and engineers, working

across more than 55 areas of research. Research has expanded globally to ensure it can attract the richest pool of talent. Because of

being globally, Microsoft can react faster to local customers’ need,

create and design specific product.

Executive Summary: Microsoft can meet customer needs through better quality control and testing processes 1.1

Visual Studio 2010 provides the right supporting tools to help ensure that applications are of the highest quality. No matter what role you play in the development process, these tools are built with you in mind to help you meet the needs of customers.

SOFTWARE QUALITY BEST PRACTICES – UNIT TESTING AND CODE QUALITY

Before a new product will go public, Microsoft provides various types of tests that should be performed, including security testing, software and hardware reliability, and compatibility between all the elements of the system. Testing is essential to ensure: - Software reliability- Software quality- System assurance- Optimum performance and capacity utilization- Price of nonconformance

Microsoft providing with following tests:

Microsoft has financial as well as knowledge resources to support Research and Development innovations with high quality.

Because Microsoft is performing a variety of tests, customers can be assured to get high-standard product

Team 1.2

Brea Oliver


Gaurav Agarwal

8

Executive Summary: Microsoft can meet customer needs through better quality control and testing processes 1.1 continued

Team 1.2

Brea Oliver


Gaurav Agarwal

9Microsoft is the first major technology company to bring surface computing to the commercial market.

Not only does Microsoft understand customer needs, it satisfies them.Two surveys we created to address the following areas of understanding customer needs:

1.Find primary data about how customers are satisfy with Microsoft products. This data will give a clear image of the pros and cons products.2.Analyze B2B market, creating a special focus group and test the Trial version on the latest product. Receive a feedback after one month.

Overall, I was satisfied with the new Microsoft Program. One hundred thirty-six respondents addressed this statement. The distribution of responses was as follows:

Net satisfaction: 191.67 out of 200, compared to MS partner average of 167.90.

"We see this as a multibillion dollar category, and we envision a time when surface computing technologies will be pervasive, from tabletops and counters to the hallway mirror. Surface is the first step in realising that vision.“ Steve Ballmer, chief executive of Microsoft

Surface is a 30-inch computer display that is embedded on the table surface. It does not need a mouse to operate it, and unlike traditional touch-screens it can recognise more than one finger at a time, allowing small groups to gather around the table and use it at the same time. It also recognises objects that are placed on its surface.

The technology will be available for consumers to interact with in hotels, restaurants and public entertainment venues: casinos, hotels and restaurants

Executive Summary: Microsoft can meet customer needs through better quality control and testing processes 1.2

Although some market share is being lost Microsoft is able to cover this loss through its supply of software to competitors and compatible products.

2.1 Microsoft captures profit loss by creating compatible software.

2.2 It is more profitable for Microsoft to create software and stay away from creating its own personal devices

Team 1.2

Brea Oliver


Gaurav Agarwal

10



Microsoft captures profit loss by creating compatible software.

• Around three quarters (1 Billion) of Mac users uses Office for Mac and Windows on Mac computer.• Microsoft already has 91.8% market share compared to OS X with 7.3% and Microsoft also captures 75% of those users.•75% recapture

iWork users for Mac Computer

Office for Mac for Mac Computer75%

Team 1.2

Brea Oliver


Gaurav Agarwal

11

Executive Summary: Although some market share is being lost Microsoft is able to cover this loss through its supply of software to competitors and compatible products 2.1

0.0

25.0

50.0

75.0

100.0

Windows Base Mac OS Base

Windows Mac OS

Mar

ket S

hare

Sales

It is more profitable for Microsoft to create software and stay away from creating its own personal devices.

+ =but

•Windows can capture more market of software by investing in Nokia.• Nokia have larger market share

Mobile device Sales

Unit sales in thousands

Market share

Microsoft Devices

12,378 1.2 %

Apple iphone

46,452 3 %

Nokia 4,61,318 28.9 %

Team 1.2

Brea Oliver


Gaurav Agarwal

12

Executive Summary: Although some market share is being lost Microsoft is able to cover this loss through its supply of software to competitors and compatible products. 2.2

Executive Summary:

3.1 B2B products bring higher quality to the personal computer products of Microsoft than those alone.

3.2 Microsoft products that begin as B2B products bring more profit than those products that begin as personal computer products alone.

Through focusing products on personal uses first rather than trickled down products from business, Microsoft can regain its market leadership in the personal computer segment.

Team 1.2

Brea Oliver


Gaurav Agarwal

13


Executive Summary:

Business Only Products

Personal Computer Only Products

Products Initially for Business now Overlapping

Products Initially for Personal now Overlapping

B2B products bring higher quality to the personal computer products of Microsoft than those alone.

2010

0 25 50 75 100

Team 1.2

Brea Oliver


Gaurav Agarwal

14


Customer Satisfaction* of Products(percentage)

*Satisfaction based on operating quality.

Executive Summary:

Microsoft products that begin as B2B products bring more profit than those products that begin as personal computer products alone.

17%

33%21%

29%29% of Profit from Business only Products

21% of Profit from Personal Use Only Products

33% of Profit from Business to Personal Use

17% of Profit from Personal to Business Use

* If a product transferred to overlap, all profit in the year 2010 was considered for the overlapped profit, regardless of when it became an overlapping product.

Team 1.2

Brea Oliver


Gaurav Agarwal

15


1. Microsoft can meet customer needs through better quality control and testing processes.

2. Although some market share is being lost Microsoft is able to cover this loss through its supply of software to competitors and compatible products.

3. Through focusing products on personal uses first rather than trickled down products from business, Microsoft can regain its market leadership in the personal computer segment.




Team 1.2

Brea Oliver


Gaurav Agarwal

16

Consulting Methods

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