The paper 'Factors that Constitute the Business Environment of Microsoft Corporation" is a great example of a business case study. The business environment of organizations is composed of different factors that influence their performance and overall success. In this essay, different factors that constitute the business environment of Microsoft Corporation (Microsoft) are presented. This is done in three different sections, which contain different information. In the first section, factors that make up the general environment of the organization are presented. Using the pest analysis model, information about Political, Economic, Social, and Technological factors is presented.
This is done in light of globalization and other international forces that influence the general business environment. In the second section, Porter’ s five competitive forces model is used to analyze the task environment for the organization. Information about how the organization has been affected by factors of its task environment is presented. This takes into account factors such as the competition, customers, suppliers, and the availability of substitute products. Lastly, information about the internal business environment of the organization is presented. This takes into account how culture and management play a role in the general performance of the organization. The General Environment of Microsoft The general environment of a business organization is made up of factors that influence the organization over the long-term as opposed to day-to-day operations.
The factors that define the external environment for Microsoft can be analyzed using the PEST model. Theoretically, this model of environmental analysis is used to scan the external microenvironment in which an organization operates (Harrison 15). Since the model presents an understanding of the political/legal, economic, social and technological factors in the environment, it can be used to evaluate the current position, market growth potential and strategic alternatives that a business can take. Political/Legal Factors In general, Microsoft is subject to governmental regulation not only in the United States but also in all the other countries where it operates or sells its products.
In general, organizations operate under rules and regulations that are developed by governments across the world. For the case of Microsoft, the company has faced a number of legal issues in the recent past. All these issues arise from the fact that government regulations across the world are concerned with monopolistic business practices by organizations.
For instance, the company faced anti-trust charges which were based on concerns that the company had abused its dominant position in the market by stifling consumer Internet browser competition and presenting consumers with a limited choice for browsers (Klein 224). Although the company reached a settlement concerning the first case, the recent action by the European Union which saw the company being fined and obliged to remove its media player from European versions of Windows software has complicated matters (225).
The overall implication for the company is that the dynamic changes in the global political environment, which are reflected in several legal suits, should not lead to the company being split up. Economic factors Theoretically, organizations are influenced by economic growth, interest rates, foreign trade balances, availability of credit, and exchange rates. Such micro and macroeconomic factors influence the performance of organizations by affecting the consumer demand for products and services (Bezjak 10). For Microsoft, its performance in the market is influenced by how social and economic factors interact at the global stage.
For instance, the company’ s performance, in the traditional market for its products and services has been affected by economic changes such as the Global Financial Crisis of 2007 and 2008 and the recent recession in the European economy. This effect was witnessed in the operations of many multinational corporations (Bezjak 16). Also, with the emergence of new markets in Africa and Asia which are characterized by generally younger populations on one hand and increasing overall economic growth on the other, Microsoft’ s performance depends on how it exploits this market (KPMG 5).
All these changes affect the consumption power of both individual and corporate clients of the products and services of the company.
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