Microsoft Porter’s 5 Five Forces (2021)

Company Overview:

Microsoft Corporation (NASDAQ:MSFT) is an American multinational technology company headquartered in Redmond, Washington, that develops, manufactures, licenses, and supports a wide range of products and services related to computing. The company was founded by Bill Gates and Paul Allen on April 4, 1975. Microsoft is the world’s largest software maker measured by revenues. It is also one of the world’s most valuable companies. Today will go over Porter’s Five Forces Model of the company.



Microsoft Competitive Rivalry:


Microsoft has an extremely competitive rivalry with other tech giants, such as Apple and Google. Since these firms are constantly trying to outdo Microsoft in terms of software updates or technological advances, it is difficult for Microsoft to keep up. The company wants to ensure that its products are the best on the market in order to attract more customers, but it also frequently fails because of these competitive rivals.



Microsoft Bargaining Power of Suppliers:


The bargaining power of suppliers is very low for Microsoft. There are thousands of computer parts suppliers around the world who work with Microsoft, which means that there is a very large supply of parts that the company can choose from. For this reason, if one supplier becomes too pricey or refuses to sell their components at a fair price, Microsoft will be able to find another provider who is more than willing to sell their products.



Microsoft Bargaining Power of Buyers:


The bargaining power of buyers has recently become a challenge for Microsoft. With the rise of mobile devices and smartphones, many people are looking to Apple and Google when it comes to purchasing products that they need. Because these firms offer both phones and tablets, there is very little reason for consumers to purchase a Windows phone or PC tablet if that is what they want. For this reason, Microsoft is having a hard time competing with Apple and Google’s products.



Microsoft Threat of New Entrants:


There is very little threat of new entrants because the world of technology moves so quickly that any new companies would be unlikely to catch up with Microsoft or even Apple and Google. This means that these tech giants will continue to hold a stronghold on the market for some time to come, and Microsoft will have to learn how to deal with that.


Microsoft Threat of Substitutes:


The threat of substitutes is low because it is difficult for users to go without Microsoft products such as computers or laptops. The company has created such a strong supply chain and name recognition in the world of technology that it is unlikely that users will be willing to switch to another alternative. In order for a substitute company to gain as much success as Microsoft has, it would have to create an incredible product that revolutionizes the market and captures the attention of consumers around the world.



Microsoft Porter’s 5 Forces Conclusion:


Even though Microsoft is a huge corporation, it faces many challenges. In order to remain successful in the world of technology, the company needs to ensure that its products are the best available and that they can continue producing these items at a reasonable cost for consumers. Without being able to do this, Microsoft could see a drop in revenue and overall success in the years ahead.

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