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What corporations can learn from Microsoft

Posted August 30, 2013

A failure to recognize and adapt to changes in mobile computing is what ultimately led to the most recent change at the top of Microsoft. But the blame should not fall solely on the shoulders of CEO Steve Ballmer, who recently announced his retirement, said David King, an associate professor of management at Iowa State University’s College of Business. The problems are more a reflection of the long-standing corporate culture at Microsoft that can serve as a lesson for all businesses.

“Microsoft’s weaknesses of being able to develop the Zune music player in response to Apple’s iPod or any kind of smartphone or tablet, just shows that they haven’t put the right emphasis and talent in areas where they can develop new things. It’s more of a cultural problem,” King said.

Instead of focusing on new technologies, Microsoft continued to invest money and talent in its Windows operating system. As King explains in his analysis of Microsoft’s Surface Tablet, to be published in the Grazadio Business Review, the concentration on Windows became a weakness for the company, despite the fact that it is the most profitable Microsoft division. Not only did this lead to missed opportunities in the mobile arena, but the latest version of Windows missed the mark with both PC and tablet users.

“Microsoft deliberately killed some projects to steal the funds from more future-oriented things to focus on products they already had in place,” King said. “Windows became a juggernaut. As a result Microsoft was not innovating something new, it was continuing to just refine Windows.”

This trap is one many corporations fall into, but can be avoided using a basic business tool known as SWOT analysis, King said. It starts with identifying a corporation’s SWOT – strengths, weaknesses, opportunities and threats. The next step of the analysis is to match a weakness with an opportunity, for example, to develop a strategy for improvement.


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