Introduction
According to recent research results, Microsoft’s shares have been alternating between decreasing or remaining constant. For this reason, investors have been wondering whether Company is falling or they need to continue trading in the company.
According to Porter, the five forces that shape industry competition includes the bargaining power of buyers and suppliers, the threat of new entrance, threat of substitute products or services and rivalry among existing competitors (Porter, 1996) . These five forces affect many big companies in streamlining profits or losses; therefore, Microsoft Corporation is not an exception, especially when operating under the information technology industry.
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Threat of Entry
The threat of entry in an industry is very common to most companies who want to make full profits on their own and look like monopolies. Such threats have been determined to depend on the heights of the barriers that have been set, according to what incumbents expect the industry to look like. However, if barriers to entry are low, newcomers would expect less retaliation from the competitors. This move intern will lead to high entry threats and moderated profits. Microsoft’s barriers to entry are highly unlikely that new brands can develop and be on Microsoft’s level leaving its brand development highly unattractive in both the present and future ratings. Because of brand loyalty customers may not be willing to change over to another company therefore making Microsoft’s switching costs mild and unattractive at any given time. It would otherwise be successful if the company can pull shares from the market and making their products differentiate. For example if you can attain a new customer, it makes it much easier to maintain that customer because of customer loyalty which is highly attractive in the present and future ratings (Marks, 2013). The company however has possession of patents and this allows less unlawful duplication of its products which is a promising factor in its existence in the future. Cost of acquiring a customer becomes higher the customers might not be attracted to the same products in the future. Microsoft can only improve further growth with new products based off of saturation of market leaving the industry neutral in the present and mildly attractive in the future
Buying Power
Microsoft’s buyers have power in a situation where there are few suppliers and their population is much bigger (Greenspan, 2015). Buyers are unlikely to switch because of switching costs leaving the industry. Microsoft still targets other company’s customers having an intensity of rivalry which makes the industry neutral in the present and future ratings. According to the strategies laid down by the Porters model, a powerful customer ground can flip how prices are in the market. Customers are capable of demanding better quality or more services, and this would lead to a lowering of prices. There are very few products that can be substituted for Microsoft products; therefore differentiation of product is highly attractive in the present and mildly attractive in the future. A large number of buyers are neutral for these products both now and in the near future. Many people highly rely on Microsoft products for their daily computing activities (Marks, 2013) . This gives a suggestion that the future of the company is still bright . Additionally, it is suggested that a customer is powerful if they are able to negotiate leverage relative to the other participants in the industry mostly for the price sensitive ones.
Suppliers
Microsoft has a large number of suppliers, so the industry is mildly attractive in the present and neutral in the future. Due to over saturation there are not many substitutes, so the industry will be mildly attractive in future (Porter, 1996) . Furthermore, due to the lack of competition bargaining power of suppliers is low so both present and future ratings will be mildly attractive. A powerful set of suppliers, including labor can lead to a squeeze of profits out of an industry that is unable to pass on cost increases (Marks, 2013) . Cost of switching is generally high therefore there is loss in revenue whenever suppliers are switched (Marks, 2013) . Microsoft can create their own stores based on forward integration in the industry being mildly attractive in present and highly attractive in the future. Suppliers depend on Microsoft, therefore the supplier’s reliance on industry makes the industry get more attractive and might get better ratings in future. However, the power of supplier possesses opportunity to Microsoft Corporation since they dictate the price of raw materials used by the firm. A company like Microsoft also depends on not just one but a wide range of supplier groups to ensure efficiency and quality of services (Porter, 1996) . On its own as a supplier, Microsoft shows the fact that a powerful supplier group needs to be concentrated more than the group it is targeting. This is because the company has a wide variety off supplies in the market.
(Porter, 1996)
in the present and highly attractive in the future. Availability of substitute will be an opportunity for the Microsoft Corporation.
Due to market share, substitutes are not acceptable for Microsoft and substitute price value is mildly attractive in both present future ratings (Microsoft Corporation, 2017) . The t asks and functions of the company cannot be replaced by other companies making it have added advantages over the competitors. Lack of substitute available for availability of substitutes is neutral in the present and future ratings. Switching cost is moderate leaving it mildly attractive in the present and future ratings this is because it will reduce the market powers of firms operating in the sector as buyers might easily switch their preference in case of something they do not prefer (Porter, 1996) . Porter’s strategies illustrate that because of brand loyalty customers or unwilling to accept substitutes it will be mildly attractive in the present and highly attractive in the future. Availability of substitute will be an opportunity for the Microsoft Corporation (Microsoft Corporation, 2017) .
According to Porters, the structure of the industry drives competition among the stakeholders and also has an influence on the profitability (Porter, 1996) . This does not depend on whether an industry is mature or just upcoming or regulated or unregulated. Microsoft has very few competitors due to the size of the industry. Due to this fact the company might get slightly unattractive to people and investors in future. Due to technology advancement competition between competitors is consistent and ongoing so competition between firms will be neutral in the present and mildly attractive in the future. Steady industry growth in the present with more potential growth in the future so industry growth is mildly attractive in the present and highly attractive in the future. Market share is mildly attractive in both present and future ratings due to the profitability of Microsoft. Product differentiation makes a product be unique therefore get a big market share even if the product is expensive. Microsoft through its differentiation continues to stay relevant over the coming years.
Normally, new entrants in an industry can threaten the market share of the businesses in this industry (Porter, 1996) . In these cases, there exists new pressure on the prices, costs of services and products and the general rate of investment. Such a scenario has been seen in the world of the internet before when Microsoft started distributing internet browsing services. Microsoft’s barriers to entry currently and in the future give other new entrance into the industry thereby acting as a threat to Microsoft (Microsoft Corporation, 2017). The power of buyers means that they will move to the next supplier in case they are dissatisfied with Microsoft. There will be an increase in power of supplier s in the future because of the forwardness of the company. There is rivalry in the industry posing an opportunity to Microsoft because of the industry growth and product differentiation.
Microsoft is capable of increasing its sales through unifying the operating system for its users (Microsoft Corporation, 2017) . Since users do not like using the new versions of windows every time they come up, the company has the opportunity to make users stick to a single operating system that operates like all other previous versions.
In analyzing the strengths of the company, it is important to note that 90% of the world PC users are from Microsoft using windows as the operating system (Marks, 2013) . Additionally, Microsoft office remains the most-used productivity software in the world. It has close to 1.2 billion users worldwide. With these two resources, the company will always keep generating revenue, as long as people will be using PCs. Due to this strength, the annual revenue has gone up since 2004, from 38 billion dollars to 86 billion, from the fact that more people get access to technology and computers (Marks, 2013) .
In order to offset the difference in currencies between countries, PC vendors increase the prices of the PCs when shipping overseas. This, in turn, has led to a fall in the number of PCs that are bought lately (Microsoft Corporation, 2017) . This, therefore, turns out as a weakness to the company, through inability to control market prices of products. In comparison, shipments for Smartphone products are expected to rise six times compared to what is expected of the Microsoft products.
Bibliography
Marks, G. (2013, May 6). Why most businesses will keep bying Microsoft . Retrieved May 18, 2018, from Forbes: www.forbes.com
Microsoft Corporation. (2017). Company Profile. Microsoft Business Profile , (pp. 3-51).
Porter's Five Strategies. (1996). Havard Business Review , 6 (1), 76-108.
