Microsoft is a product company. It thrives on innovation and building products that help other businesses operate with increased efficiency. Great companies like Microsoft thrive and grow because they have business strategies that give them a sustained competitive advantage.
Take a look at the competitors of this company. None of them are even close to it. It is not that the competitors’ products are poor quality or are less innovative or user-friendly. They cannot compete with Microsoft because of their business strategies to gain a competitive advantage. None of the competitors have succeeded in achieving even strategic convergence with Microsoft.
Steve Jobs made a valiant attempt to outperform Bill Gates but failed. Steve Jobs was forced into forming a business alliance with Gates to keep Apple from sinking. It is an example of Microsoft’s resilient business strategy.
The success of Microsoft is also aided by how the company has structured its organization. Its sales teams work very close with bulk users and system integrators. They aggressively offer solutions that meet the requirements of customers. Microsoft’s business processes and organization have been streamlined to meet its strategic business objectives. Volatility in the business environment does not impact the performance of companies with carefully thought-through business strategies. These help it build great business processes. An organization is made, and a great strategy nurtures leadership.
If you want to decode the reasons for Microsoft’s enduring success, you should do an activity map of its value chains for the company and compare it with a couple of competitors. Pick a successful competitor like Google and another not-so-successful product company. A close analysis of the activity maps will reveal how Microsoft’s sub-entity and business function works seamlessly. The company components work synergistically towards a business objective defined by the Board. Such focus will be lacking in competitors who have not succeeded to the extent that Microsoft has.