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Q1. What recommendations would you give to Satya Nadella, CEO of Microsoft to compete more effectively against Google? To engineer a turnaround at Microsoft?
With Microsoft struggling to maintain the number of PC sales as in previous years, the company has a significant opportunity in the smartwatch market. Smartwatches are attractive for fitness enthusiasts and people with medical problems that may use a monitoring device, such as heart problems. An estimated 500 million wearable devices will be shipped globally by 2024 (Dawson & Akinbi, 2021). Microsoft could gain a significant share of this market by leveraging its brand awareness.
Much of the action in the world is happening on smartphones, moving away from desktops and laptops. Microsoft lags in the ability to tie people up in its services. Android users get to install apps from Google’s Play Store, which controls a significant market share of smartphone software. iPhone users access software from Apple Store, and the smartphone work almost the same as the MacBook pc. Microsoft should also integrate its Windows operating system with a better app store and make the PC system work together with the smartphone system to increase the number of purchases for windows-powered smartphones.
Acquisitions should be another strategy to prioritize at Microsoft. The company should purchase social media platforms such as Snapchat or Twitter to diversify its interests and increase its revenue base. Most customers already know that Microsoft does not gain so much from targeted advertising compared to Google. This perception could be an advantage in enticing the consumer to use more of its software.
Finally, Microsoft should reduce the price of its Windows software suite, Microsoft Office, to attract more demand and increase barriers for rivals. It can achieve this by reducing the cost of production and relying on research and development to innovate new software.
Q2. What recommendations would you give Sundar Pichai, CEO of Google, to compete more effectively against Microsoft? To continue to sustain its competitive advantage.
Firstly, Google should develop a strategy to capture a significant share of the Chinese market. Countries like China and India have become global innovation hubs because of their large market size, growing demands, and plentiful source of R&D talent (AGARWAL et al., 2019). China’s dominant search engine is Baidu, and most google services do not control the market as in other parts of the world. It is a big miss for Google, and managing to come up with a way to bridge this gap would massively shoot its revenue higher than its closest rivals.
Google has a talented workforce, and the level of innovation in the company is incredibly high. The company’s products are superior to close substitutes, creating barriers for competitors and potential entrants. Google should continue patenting its innovations and investing in research and development.
Google should increase consumer awareness of personal data on all its platforms. Google’s targeted advertisements have raised claims before that the company mines personal data against consumers will. Most individuals using Google products are unaware of settings that reveal or hide personal data from the company and third parties. Increasing this awareness could gain more customer loyalty and attain more control over its services such as search engines.
Q3. Please review from the web, the current quarterly statements from both companies and identify their next steps?
According to Microsoft’s quarterly release for Q1 2022, revenue increased by 18%, operating income increased by 19%, net income went up by 8% GAAP, and diluted earnings increased by 9% GAAP (Microsoft, 2022). The company is committed to its cloud platform, that saw a 32% growth in its revenue. Through its result and development investments, the company produces new services or enhancements to current products and services to help customers become productive and secure. The company’s focus has been on providing its cloud services to compete with other giants in the industry, such as Google, Apple, and Amazon.
Alphabet, Google’s parent company, saw an increase in revenue by 23% and a growth in operating income by 30% in the first quarter of 2022 (Alphabet, 2022). The company is committed to making considered investments in R&D and talent to support long-term value creation for its stakeholders. It will continue to support innovation and strategically stabilize its leadership position in the market, particularly in search engine and advertisement segments.
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AGARWAL, N., BREM, A., & DWIVEDI, S. (2019). FRUGAL AND REVERSE INNOVATION FOR HARNESSING THE BUSINESS POTENTIAL OF EMERGING MARKETS — THE CASE OF A DANISH MNC. International Journal of Innovation Management, 2050009. https://doi.org/10.1142/s1363919620500097
Alphabet. (2022). Alphabet Announces First Quarter 2022 Results. https://abc.xyz/investor/static/pdf/2022Q1_alphabet_earnings_release.pdf
Dawson, L., & Akinbi, A. (2021). Challenges and opportunities for wearable IoT forensics: TomTom Spark 3 as a case study. Forensic Science International: Reports, 3, 100198. https://doi.org/10.1016/j.fsir.2021.100198
Microsoft. (2022). FY22 Q3 – Press Releases – Investor Relations – Microsoft. Www.microsoft.com. https://www.microsoft.com/en-us/Investor/earnings/FY-2022-Q3/press-release-webcast
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