Business Strategy Plan

In today’s highly disruptive, tech-savvy, competitive, and globalized markets, change is
considered inevitable and integral for business survival. Admittedly, the adage “adapt or perish”
is becoming a reality, as business that fail to tweak their strategic plans and actions tend to
struggle in the market and eventually fold. Motorola, Yahoo, Kodak, and Blockbuster are
examples of giant companies that have either closed doors, forced to merge with others, were
acquired, or continue to struggle financially after failing to adapt to the changing market
dynamics. Therefore, sustainability today requires that companies continually modify their
strategic plans to meet changing market dynamics, from customer needs to jurisdictional and
regulatory requirements to employee needs, while ensuring investors get value for their money.
Ideally, a business strategic plan is a roadmap that outlines the business’ goals and how it plans
to achieve them – the actions and tactics (Latrice, 2023).
Microsoft is undeniably one of the very first unicorn tech firms that emerged in the 70s and
is credited for shaping the tech landscape and setting the stage for the tech bubble of the 90s and
2000s. Working for Microsoft is a dream for every American and global citizen because of its
culture, love for the environment, concern for its staff, and, most important, profitability and
long-term strategy. This paper comprehensively discusses Microsoft’s strategic plan, including
(1) motivation, innovation, and people’s strategy, (2) ethics, (3) corporate social responsibility or
CSR, (5) organizational culture, (6) business environment, and (7) change management
approaches. It also provides recommendations for improving existing weak spots.

Company Background

Microsoft Inc. is a US-owned tech firm that was founded in 1975 by Paul Allen and Bill
Gates in Albuquerque, New Mexico. Today, the company is headquartered in Redmond,

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Washington DC and has expanded globally, selling software, hardware, and cloud computing
products. Microsoft Windows OS is the company’s flagship product and the world’s most
popular operating system. It also sells other software products, including Microsoft Office Suite
(Word, PowerPoint, Excel, OneNote, Outlook, and OneDrive), Microsoft Edge, Skype, and
Microsoft Teams. Microsoft also manufactures, sells, and licenses multiple hardware products,
including, among others, laptops, headsets, laptops, and tablets. It is also involved in the
entertainment, cloud computing, and other industries, licensing and selling products, such as
Xbox Games, Windows and PC games, Movies & TV, Azure, AppSource, Visual Studio,
Microsoft Cloud, Dynamics 365, and Microsoft Security (Microsoft, n.d.). Microsoft is one of
the Big Five most influential and largest tech firms in the US – others are Amazon, Facebook,
Apple, and Google.

Motivation, Innovation, and People’s Strategy

People’s and Employee Motivation Strategy
Microsoft has one of the most comprehensive and all-round people’s strategies that
considers the wellbeing of its employees. For example, the company relies on “motivation” to
keep its staff inspired, motivated, engaged, and satisfied. This has been the primary reason
Microsoft has consistently been the “go-to” workplace for tech enthusiasts, college students, and
the industry’s crème de la creme. The focus on staff has fueled innovation and creativity,
improved employee retention, reduced attrition rates, and created a positive work culture at the
company. According to reports, Microsoft’s employee retention profile has remained steady
(76/100) for the longest time, with employees likely to stay around for several years. In 2023, it
ranked second out five rivals, including Oracle, Sony, Google, Yahoo, and Apple. In the poll,
77% of Microsoft employees said they are excited to go to work every day and 58% would not

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quit if offered more money elsewhere. Overall, about 60% said the company is doing its best to
retain them (Comparably, n.d.).
Microsoft has multiple programs and initiatives focused on motivating and retaining its
employees to foster team building, cohesion, trust, productivity, institutional knowledge,
customer experience, efficiency, and lower the cost of training and onboarding new hires. For
example, the firm leverages Microsoft Viva Goals and Objectives and Key Results (OKRs) to
align business goals and team priorities, assisting build a sense of purpose for its workforce,
clarify their influence, and link achievement and priorities in all business areas. Microsoft Viva
Goals offers a platform in which workers and managers can leverage the OKR tool to set and
implement goals while creating alignment, purpose, and clarity. It provides staff with a single
source of truth for them to make informed and swift decisions. Other employee staff-focused
strategies include comprehensive and proper onboarding of new recruits, fair recognition and
compensation systems, continuous feedback cycles, robust benefit options, training and career
development, flexible work schedules, home office stipends, mentorship and wellness programs
(fitness class reimbursement, retirement planning, and stress management), and employee
experience platforms and tools.
Innovation Strategy
Since inception, Microsoft’s competitive advantage has been its focus and heavy
investment on innovation and creativity. “Creativity” is the production of novel ideas by teams or
individuals while “innovation” is the implementation of these concepts and their subsequent
conversion into viable, useful, and novel commercial services, products, and industry practices.
Since Bill Gates tenure as the CEO, Microsoft has continuously strived to build, advance, and
improve its software and hardware technology, making them accessible and cost-effective for

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ordinary citizens to purchase and use them globally. This commitment has been passed down to
the company several years after Bill Gates retirement from the helm.
One way through which Microsoft promotes innovation is by providing employees
opportunities to grow their skills, careers, and experience through multiple career advancement,
mentorship, and training programs. Every year, Microsoft hosts a “Research Faculty Summit”
where leading professionals, researchers, and educators collaborate and partner with the
company’s research team to collectively identify the challenges faced by customers and
communities, propose best approaches to address them using the most recent evidence-based
practices (EBPs), and establish new research opportunities. For the past three decades,
Microsoft’s research community has worked across several geographies, institutions, and
disciplines to realize and envision the promise of new technologies for its customer base and
society. For example, the 2022 Summit brought together researchers and science and technology
professionals from around the globe, contributing over 190 new research project presentation
(Microsoft, 2021).
Microsoft also promotes innovation and employee happiness by integrating workforce
diversity and inclusion policies and practices. By creating a diverse and inclusive environment
wherein in workers from multiple backgrounds (race/ethnicity, gender, age, nationality, religion,
sexual orientation, disability status, and socioeconomic backgrounds) feel cherished, respected,
and valued, Microsoft has been able to create a cohesive and more innovative team. The
company fosters a culture of inclusion, promotes fairness and equality, and encourages diverse
perspectives – a recipe for creativity and innovation. It hires, develops, and nurtures the best
talent in the market, bringing a broad range of experiences, backgrounds, and perspectives to the
sector.

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For example, Microsoft has one of the most diverse Board of Directors of any tech
company, with racial/ethnic minorities and women occupying nine of the twelve slots, including
CEO and chairman Satya Nadella (Indian American). The five women serving in the board
include Teri List, Catherine MacGregor, Penny Pritzker, Sandra E. Peterson, and Emma
Walmsley (Microsoft, n.d.). Overall, women represent 29.1% of all executives (McIntyre, 2023).
A new report also indicates that about 8.8% of Microsoft’s US workforce identify as having a
disability. Microsoft also provides over 50 community groups with networking, support, and
career growth opportunities, product input, support, mentoring, and aid in activities that
encourage cultural awareness. For instance, the Microsoft Software and Systems Academy offers
technical education and training that allows trainees (its employees) to leverage utilized their
core skills and an opportunity to launch their professional journey in information technology.
Microsoft is not only committed to representative and equal hiring. The firm also has shown
dedication to the principle of pay equity by leveraging factors that impact total pay, including job
tenure, level, and title. For example, in the United States, all eligible ethnic/racial minorities
received $1.007 total pay for each $1.000 received by eligible whites (McIntyre, 2023).
Additionally, Microsoft fosters innovation and employee happiness through empowerment
and autonomy. By granting workers a certain degree of decision-making power and autonomy in
their roles, Microsoft has been able to promote a sense of empowerment and ownership.
Empowering workers by delegating roles, trusting their capabilities, and engaging them in the
decision-making table has been the perfect recipe for promoting brainstorming, creativity, and
innovation at the individual and team levels. Although Microsoft’s research team has a high
degree of autonomy and freedom, there is a general feeling the company does not grant all

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employees the freedom to make independent decisions or involve them in the decision-making
processes.

Monitoring Ethics

Microsoft understands the importance of monitoring ethics in enhancing decision-making
processes and social responsibility, build trust and reputation, maintaining regulatory/legal
compliance, establishing a positive organizational culture, and adapting to a rapidly changing
business landscape. Therefore, the company has taken critical steps to monitor and ensure the
company operates within the stipulated ethical and legal framework. One way it has done this is
by establishing and implementing an all-inclusive and clear “Code of Ethics” to provide a
framework for guiding and promoting ethical behavior. The Code of Ethics complies with
industry ethical standards and legal framework, including laws guiding fair workplace practices
(hiring, promotions, pay and benefits, and dismissal) and accounting practices (such as
transparency).
For example, Microsoft has established a comprehensive “Code of Conduct” for
participation in its open-source communities. The code stipulates participation expectations,
procedures for reporting unacceptable behavior, and the standards, such as demonstrating
kindness and empathy toward others, respecting others’ experiences/viewpoints/opinions,
accepting and giving constructive feedback, and focusing on what is best for the overall
community, not the individual (Microsoft, 2024).
Microsoft also monitors ethical standards through its comprehensive training programs
focused on improving employee and partner awareness of its codes. Microsoft has also
developed a “Trust Code” that all employees must receive training. The Trust Code training
program permits workers to recognize and understand their expectations, receive assistance when

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required, and make prudent and informed decisions. The program includes an investigation,
analysis, remediation, and mini-episodes.
Moreover, Microsoft has an “Ethics Review Program & IRB) that was built to assist its
teams and employees to protect human welfare and rights and respect private data. The program
offers education, guidance, and reviews for teams involved in academic research. This program
also supports the company’s IRB (Institutional Review Board), which is officially registered with
the HHS’s Office for Human Research Protection (Microsoft, n.d.).
Corporate Social Responsibility (CSR) Plan

Today, most global titans, including Microsoft, understand that business is no longer about
profits but operating sustainably as a means of meeting their corporate social responsibility
(CSR) footprint. CSR is a broad term that principally integrates respect for the environment,
caring for the welfare of employees, producing products that meet consumer needs, giving back
to society, and complying with regulatory laws and ethical practices while ensuring investors get
value for their money (stock value growth, dividends, and profits). As a leading tech firm,
Microsoft understands the importance of CSR in improving operational efficiency, mitigating
risks, bolstering financial performance, identifying opportunities for innovation, reducing
operational costs, and achieving long-term sustainability.
This realization has been the reason the firm has established a comprehensive CSR plan
centered on four commitment pillars: expanding opportunity, earning trust, protecting
fundamental rights, and advancing sustainability. For example, Microsoft has been committed to
expanding opportunity by ensuring every global citizen acquires the rights skills to thrive in the
digital age, AI-powered economy. Its strategy extends beyond individuals to include empowering
nonprofits and other business to digitally address and transform society’s greatest challenges. For

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example, Microsoft is pumping $60 million to allow empower startups and business tacking the
globe’s toughest healthcare concerns through data science and AI to further medical research,
identify insights, and improve health equity. Additionally, Microsoft understands that people
must trust its products (technologies) for these technologies to make a meaningful impact in
society. This is practically why the company is making efforts to ensure responsible use of
artificial intelligence (AI), advancing digital cybersecurity and safety, and protecting privacy.
Microsoft is also devoted to protecting fundamental human rights, aid in the success of
communities, and address the challenges (intended and unintended) created by the technology.
The tech giant is doing all these by expanding connectivity and accessibility, promoting
responsible and sustainable business practices, empowering communities, and fostering inclusive
and fair societies. The firm relies on global standards to guarantee its actions promote and
respect human rights. It is also committed to building technologies that advance and respect
human rights globally and aid address opportunities and challenges created by technology
through proactive multistakeholder dialogues, class-leading due diligence, and rights-awareness
decision-making. Microsoft is also committed to ensuring ethical standards and transparency
across its international supply chain – safeguarding people’s rights by maintaining sustainable
practices in distribution, production, and sourcing Other commitments include identifying digital
equity gaps, promoting inclusion and accessibility to technology, protecting democracy
institutions, strengthening justice reforms, championing fair immigration, and supporting
emergency response and humanitarian action (Microsoft, n.d.).
Finally, Microsoft is advancing sustainability through swift and collective action focused
on climate change and creating technology aimed at the same. This means taking accountability
of their operational carbon footprint and speeding progress via technology. For instance, the

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company is pledging to be carbon negative by 2030 and remove all its emissions in the
atmosphere since inception (1975). Additionally, by 2030, the company promises to be water
positive and zero waste across its business directions. The firm invested in buying 1.4 million
tons of carbon removal in 2022 and recycling it into sellable products. The same year, Microsoft
also implemented a more circular approach for materials management by diverting more than
12,000 metric tons of waste from incinerators and landfills. The company is also protecting over
12,270 acres of land in Belize and supplying one million households with sanitation solutions
and clean water (Microsoft, n.d.).

Organizational Culture

The four attributes that define Microsoft’s culture are (1) “growth mindset,” (2) “customer-
obsessed,” (3) “diverse and inclusive,” and (4) “One Microsoft.” Its “growth mindset” is rooted
in the belief that all people can develop and grow, anyone can shift their mindset, and potential is
not predetermined but nurtured. The company believes their employees must be insatiably
curious and learning at all times. They should be ready to lean toward uncertainty, understand
failure occurs along the mastery journey, take risks and quickly move on when mistakes happen,
and be open to others’ triumph.
As a “customer-obsessed” entity, Microsoft encourages staff to learn about their customers
and partners with a newbie’s mind and build solutions that address these needs. The company is
insatiable in its will to learn from the outside and import those ideas into its fabric and practice,
while still innovating new solutions to delight and surprise users. Microsoft also recognizes the
importance of diversity and inclusive business practices. It is committed to serving all global
citizens and consumers through equal representation. The company is open to learning from its
“own” biases and bettering its behavior to tap into the collective talent and power of all its

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community. Finally, the “One Microsoft” slogan is anchored on the belief that the company’s
family is joined by a single, shared mission. The company believes working together makes its
dreams achievable and believable. It also takes every opportunity to partner across borders to
bring the best products and solutions to the market (Microsoft, n.d.).
Business Environment

Fig 1. SWOT analysis showing Microsoft’s strengths, weaknesses, opportunities, and threats

Strengths
 Strong brand image (Microsoft is the leading B2B
brand in 2024)
 Simple-to-use software
 Brand allegiance (Microsoft own’s 90% of the OS
industry and has dominated for a long time)
 Strong distribution routes (Microsoft partners with all
key computer peripheral manufactures, e.g., Samsung,
Toshiba, Dell, and Lenovo and other
distributors/retailers)
 Large market share and presence (Owns an average
of 21% of the globe’s market share; 0ver 800 million
Windows 10 customers in 190 countries; Windows
owns 75% of market share)
 Significant stock capitalization (market cap of $3.16
trillion as of April 2024)
 A positive work environment, fair compensation &
benefits, workforce diversity & inclusion, employee
empowerment, and opportunities for professional
growth

Opportunities
 Remote work solutions (Microsoft can
leverage recent developments in remote work by
improving its remote work innovation for users
– Microsoft Teams)
 Gaming industry (it can strengthen Xbox, one
of its long-standing products in the gaming
industry since 2001)
 Smartphone industry (the company can work to
grow its Nokia brand)
 Acquisitions and partnerships with other firms
 Extending into AI-based products, such as
ChatGPT
 Expansion into the cloud-based market

Weaknesses
 A small market share in the internet browser industry;
Microsoft Edge browser only owns less than 5.92% of
the US market share
 Less innovation compared to Apple, Google, and other
tech rivals; instead, it often upgrades existing software
and hardware
 Unfair business practices (Microsoft has been
previously accused of antitrust breaches due to market
monopoly)
 Vulnerability to cybercrime (Microsoft’s systems

Threats
 Growing competition from Apple, Google, and
Samsung who keep innovating, developing, and
expanding.
 Changing consumer habits and needs away
from PCs (customers are leaning toward new
gadgets, e.g., tablets and smartphones)
 Potential lawsuits leading to damaged
reputation
 Open-source projects (Microsoft products are
expensive. The presence of free open-source

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have been breached severally, including in 2020 by the
Russian Nobelium hackers0
 Overexposure to the personal computer market
(most of Microsoft’s products rely on the sale of
personal computers and laptops. Any slump due to
slowed market growth can have catastrophic impacts
 Unfruitful and costly acquisitions (e.g., Nokia,
Navision, aQuantive, Tellme Networks, and Danger

products like Linus is proving a challenge)
 Regulatory issues and potential lawsuits
(large litigations against contract violations,
patent infringement, and anticompetitive
behavior might hurt the firm’s reputation while
causing significant financial impact)
 Cybersecurity threats (Microsoft is a target for
malware, ransomware, and phishing attacks
from cybercriminals and hackers)
 Anti-encryption drive (by permitting
encryption of consumer services, regulators and
child welfare advocates accuse Microsoft for
allowing criminals and predators to operate scot-
free)

Competitive Position and Possibilities, Generic Strategies, Value Disciplines, and Grand

Strategies

Competitive Position and Possibilities
Microsoft’s business model comprises of three segments: intelligent cloud, productivity &
business processes, and personal computing. The productivity & business division includes
Dynamics business solutions, LinkedIn solutions, and licensing for Office 365 and Office
products. This division generated nearly 32% of all Microsoft’s total revenues. Intelligent cloud
includes hybrid, public, and private server offerings and other related services. Personal
computing includes search advertising, gaming, devices, and Windows OS licensing – this
segment represents 34% of all gross revenues. Microsoft enjoys a competitive moat in some of
these segments and products while there is a huge growth opportunity in others. For example,
Windows has been a dominant OS globally, controlling nearly 70% of the global market share
(Sherif, 2023). Microsoft Office 365 suite also enjoys a 46% global market share, although
Google’s G Suite has a slightly higher percentage (48%) (Vaisshery, 2024). At a market share of

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20%, Microsoft is lagging behind Amazon (32%) in the cloud services segment. Therefore, there
is a growth opportunity for Microsoft in the cloud computing industry and Office Suite.
However, Microsoft has a stronger competitive position in the AI industry due to its commitment
to open-source, ecosystem integration, ethical practices, and investment in ongoing innovation
and research.
Generic Strategies
“Broad differentiation” is Microsoft’s leading generic strategy. This entails designing and
selling unique products to a broad range of consumers, from organizations to individuals to
households. Using its broad differential approach, Microsoft is able to build a competitive edge
to attract a wide category of consumers worldwide. This generic approach also aligns with the
firm’s corporate mission and vision statements that emphasize seizing a large global market
share.
Grand Strategies
Microsoft is leveraging several “grand strategies” to spearhead its intensive growth. One
notable strategic framework is Ansoff’s Matrix of market penetration (primary approach),
product development (secondary strategy), market development (supporting approach), and
diversification (supporting approach). Market penetration is the firm’s primary approach the firm
leverages to grow its business. This entails selling software and hardware products in the current
marketplaces. As a secondary strategy, product development means Microsoft develops new
products (software, hardware, and cloud) to expand its revenue streams. Market development
supports organizational growth by entering into new territories (untapped markets), although this
is no longer a viable approach as the market has already been saturated. It was the primary
strategy when Microsoft first burst into the scene in the 80s, 90s, and early 2000s. Diversification

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is another supporting strategy that Microsoft leverages to acquire new companies like Nokia or
develop new products. The idea is to expand its portfolio and revenue streams (Gregory, 2023).

Recommendation for Improvement

Microsoft needs to implement multiple changes to maintain its competitive position and
keep up with the new powerful competitors, including Google, Amazon, and Apple. Firstly, it
needs to provide more autonomy to its employees, not only the research team. Additionally,
Microsoft needs to monitor ethical and legal compliance through regular internal audits,
performance assessment, and stakeholder engagement, including the community, partners, and
customers. Finally, Microsoft needs to operate more sustainably by designing an all-round CRS
plan. Although Microsoft is making significant strides in protecting the environment by reducing
its carbon footprint, it is evident it has not emphasized other areas of corporate social
responsibility, such as supporting “direct philanthropy” through donating services, goods, money,
etc. It seems the company has not detached itself from the Gates & Melinda Foundation.

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References
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https://www.comparably.com/companies/microsoft/retention
Gregory, L. (2023). Microsoft’s generic competitive strategy & growth strategies.
https://panmore.com/microsoft-corporation-generic-strategy-intensive-growth-strategies
Latrice, T. K. (2023). Change management during unprecedented times. IGI Global.
McIntyre, L. (2021). Microsoft’s 2023 Diversity and Inclusion Report: A decade of transparency,
commitment, and progress. Microsoft.
https://blogs.microsoft.com/blog/2023/11/01/microsofts-2023-diversity-and-inclusion-
report-a-decade-of-transparency-commitment-and-progress/
Microsoft. (2021). Microsoft Research Summit 2021. https://www.microsoft.com/en-
us/research/event/microsoft-research-summit-2021/
Microsoft. (2024). Code of Conduct. https://opensource.microsoft.com/codeofconduct/
Microsoft. (n.d.). All Microsoft. https://www.microsoft.com/en-us/
Sherif, A. (2023, Dec 7). Windows operating systems market share of desktop PCs worldwide
2017-2023. Statista. https://www.statista.com/statistics/993868/worldwide-windows-
operating-system-market-share/
Vailshery, L. S. (2024, Jan 29). Number of Office 365 enterprise subscribers worldwide, by
country. Statista. https://www.statista.com/statistics/983321/worldwide-office-365-user-
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