Microsoft

Group 2:Peter Fontana

Kelly WilsonGeorge Lazar

Hsin-Yi Tai

Case for MS B2B Extension

• Extending Microsoft Small Business software from desktop to portal software

Microsoft the Brand

• 1975 Bill Gates & Paul Allen found MS, release MS Basic• 1980 forms partnership with IBM: MS-DOS• 1983 releases Word• 1985 releases Excel (for Mac), Windows OS• 1990 releases Office, Windows 3.0• 1993 releases Office bundled 4.0 software• 1995 releases Windows 95 bundled with Internet

Explorer

Brand Management: 1995

• MS Brand Strategy– Set industry standards. – Upgrade– Push volume sales, exclusive contracts– Leverage industry standard position with new products– Integrate, extent, and simplify products

• Slogan during 1995

Recurring MS Brand Strategy

• Mimicking– Apple OS, Windows– Apple iPod, Zune MP3 player– Sony Playstation, XBox– Lotus 1-2-3, MS Office

• Bundling Brand Strategy– Bundling Office quashed competitors Word Perfect, Lotus 1-2-3– Perceived value with more software

“80% of users used less than 20% of features”– Bundling IE / Windows quashes competitors (Netscape, AOL)

Original Positioning

The creator intended…• Bill Gates's MS vision "to get a workstation running our

software onto every desk and eventually in every home“

Buisness customer positioning…• Microsoft is the industry standard

Modern MS, 1995-2000• 1995 MSN.com launches as a competitor to AOL• 1996 MSNBC cable channel launches• 1997 buys Hotmail, email website• 1997 Government sues for anti-competitive practices• 1997 MS invests $150m in Apple; in return

Apple ships MS software on Macs• 1998 releases Windows 98• 1999 releases MSN Instant Messenger• 1999 TNT movie “Pirates of Silicon Valley”• 2000 Decision in US Vs Microsoft

– Forced to split into two units:OS, other software components

Modern MS, 2000-2007• 2000 releases Windows 2000, Windows Millennium• 2000 Bill & Melinda Gates Foundation founded• 2001 releases Windows XP, XBox• 2002 MS reorganizes, 3 parts

– Platform Products & Services; Business; Entertainment & Devices

• 2004-2006 MS Consumer Product Extensions• 2006 Apple launches “Get a Mac” anti-MS campaign• 2006 Google launches Documents• 2007 releases Vista and Office 2007

MS is among the world’s Top 3Most Recognized Brand Names-Business Week

Brand Management: 2007

• MS faces tough times– Lawsuit– Pirates Movie– Rise of Apple, iPod– Rise of Google– Vista/Office ‘07 Early Flop– Open Source

• Brand leverage, ext– XBox (2001)– Smart Watch (2004)– Zune MP3 Player (2006)

• Dot Net Hesitation

Current Positioning

The creator intends…“At Microsoft, our mission and values are to help people and businesses throughout the world to realize their full potential.”

Buisness customer positioning…• Though a monopoly and with consideration for emerging

alternative software, Microsoft is still the industry standard in business software

Going to Market

• Distribution– Licensing deals with businesses,

hardware distributors– Consumer outlets, online

• Speaking, Conferences– Comdex, IT exhibition– Product Launches– Benefits: leadership in technology, presence in business, press

• Television:– MS Brand Commercial– Achieve Your Potential Ad, small biz– Benefits: Mass media channel to announce new products, profiling

customers and use of MS products

Going to Market• Print

– Benefits: Niche publication for targeting specific products

• Promotion– Outdoor, web (MSN, Hotmail, Messenger)– Benefits: Mass audience, clever placement

MS Office BundlesLicensing $475 per license

Initial SolutionMS Office for Small Business was…• A comprehensive software package

– Word Processing– Presentations– Spreadsheets– Email

• An industry standard – Skills job-to-job– Data transfer

• Periodically updated

Timeliness & Timelessness 1990

Timeliness• Shift in offices to technology• Competition in PC software• Component Packaging

Timelessness• Electronic archiving• Cost-effective• Space saving• Efficiency• Word processing, presentation, spreadsheets

2007 Threats

• Initial Competition– Lotus– Netscape– Apple

• Emerging Competition– Google Documents Portal Software

• Mimicked MS Office: Word, Excel, PowerPoint• Targets Consumers• Free, plus storage

The MS Branding Question

• Where to from here?

• Options:– Remain offline software provider

• Retain Market Share• Continue to extend, mimic, beat by bundling

– Enter portal software market• Combat emerging threats• Translate mimicking and bundling strategies

Assessment: NeedsThe business market needs…• An increasingly mobile workforce• Cost-effective software solutions, global• A reason not to switch from Microsoft• Emerging alternatives• Efficient software• Files in a universal format• A familiar look/feel to software• Convenient software updates

Foundation: OpportunityCreator’s Insight• MS invented the wheel• Experience with small business software• Competitor Doppelgangers

Brand Value Opportunity• Mobility• Own small business market share• Proprietary functionality• Bandwidth increases• Isolate competitive threats• Offer both desktop and portal solution

Extension: MS Office Online

• Naming Strategy

• Features Need Fulfilled– Portal Software Mobility– Free Cheap Software Solution– Limited function “Good enough” theory– Online bundle Familiar

Altered Positioning• MS Brand effect on Office

– Lawsuit Fallout– Product Extensions– Gates Foundation– Vista, Office ’07– .Net Decision

Brand strategy going forward…• Microsoft should leverage its leadership status in offline

technologies to emerging technologies

Business customer positioning going forward…• Microsoft is the industry leader in emerging business

technologies

Brand Relevance• MS Office Small Business is relevant

– Business customers need a familiar software bundle– Software has evolved to match changing needs

• Online extension is relevant– Mobile Work Environment– Wi-Fi, Smart Phone mobile devices

• Extension is relevant to MS Brand– Remain market leader for small business– Enter portal software market– Leverage mimicking, bundling strategies with

innovation

Timeliness & Timelessness 2007

Timeliness• Emerging competition• Online offerings• Mobile workforce• Cost-conscious business startups• Value-adding competitive strategy

Timelessness• Efficiency• Convenience• Universal business file format• Cost-effective software solution• Familiar functionality

Brand Extension Channels

• Distribution– MSN website– Hotmail, MSN Messenger– Desktop Icon bundled with Windows, Office– Small Business Hardware Distributors

• Public Messages & Promotion– Online– Continue existing media campaigns

• TV, Print, & Conferences targeting small business• Provoke Google into advertising

Public Messages• Leverage MS Brand Equity

– Office for Small Business familiarity, functionality

– MS reputation for integration, simplicity– Perceived value bundling with desktop

software– Target business; consumers will follow

Summary• Amid failed extensions, enter the portal software

business

• Continue MS branding strategies: bundling, mimicking

• Leverage Brand Equity

• Utilize web-based products for distribution

• Protect core business

Questions, Comments?

Group 2:Peter Fontana

Kelly WilsonGeorge Lazar

Hsin-Yi Tai

MISC.• How are we better than Google?

• No intend required• More functionality• Point of Reference / Comfort / Intuitive

• In Software package:• Accounting express 2007• Excel• Outlook / entourage • Ppt• Publisher• Word (83)

• Nice to have: Sync between Outlook and hotmail

Timeliness Reference Slide

• Specify Timeliness and timely issues of the situation then and now (when product was launched and now)– THEN (1990)

• Shift from word process off PC to ON• Competition by other PC software --> Word Perfect /

Lotus• Component Packaging with OS

– NOW• Emerging Competition Google and online platfors• Need for Software/File Access Mobility• Need for Free Software Solution for domestic Business

Biz Stat-Ups and int’l biz (price prohibitive)• Maintaining Relationships with MS Customers (add

Value to product) in light of emerging alt’s

Positioning Today• From MS website:

• As a company, and as individuals, we value integrity, honesty, openness, personal excellence, constructive self-criticism, continual self-improvement, and mutual respect. We are committed to our customers and partners and have a passion for technology. We take on big challenges, and pride ourselves on seeing them through. We hold ourselves accountable to our customers, shareholders, partners, and employees by honoring our commitments, providing results, and striving for the highest quality.

• MS Small Business provides an intuitive product to equip workstations with the tools that fulfill the software technology needs of businesses.

• Slogan Today“At Microsoft, our mission and values are to help people and businesses throughout the world to realize their full potential.”

Opposition

• History and present use of Mar-Comm Tools

• Insert TV, print ads thru time

Timelessness Reference Slide

• Specify Timeliness and timely issues of the situation then and now (when product was launched and now)– THEN

• Need for Word Processing/other• Need for Electronic Archiving and doc’s etc.• Cost effective• Need for Efficiency

– NOW• Need for Efficiency in online world• Consistent Formatting Universal Language• Cheap Software Solution• Familiar Software Look/Feel