Porter’s Five Forces Analysis for Microsoft Essay

751 Words4 Pages
Mid-Term Assignment

Porter’s Five Forces Analysis for Microsoft

Lillian D. Anderson

Strayer University

Prof. Ghodfrey Ekata

Information Systems for Decision Making - CIS 500

July 24, 2011.

Abstract
Our company is a small investment company that specializes in technology investments. The company has a significant amount of capital invested in Microsoft. We were made aware that a new company by the name of Strayer Holdings has just released an operating system that plans to compete with Microsoft’s operating system. Our team was charged to compile a Porter’s Five Forces analysis for Microsoft to ensure that our company’s Microsoft investment is not at risk. The following report is a Porter’s Five Forces analysis and
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The Five Forces Model includes:
Buyer power Buyers have other choices when it comes to an operating system, but not many. The Windows operating system faces competition from other software products offered by well-established companies, including Apple and Google, and from the Linux operating system. Since there are few choices, buyer power is low.
Supplier power Since buyers have few choices of whom to buy from, supplier power is high.
Threat of substitute products or services Considering that every computer manufactured in the United States and the world has to have an operating system in order to work Microsoft appears to be dominant in this arena. The company has been so dominant over the years that back in 1998 in a complaint filed against Microsoft in the U.S. District Court of the District of Columbia on May 18, 1998, the Justice Department declares unequivocally that "Microsoft possesses (and for several years has possessed) monopoly power in the market for personal computer operating systems" (U.S. v. Microsoft Corporation 1998).
Threat of new entrants Looking at the sizable market share Microsoft has come to enjoy over the years, a new competitor would face a number of entry barriers before entering this market. Customers are very loyal to the Microsoft brand and would expect any competitor to offer at the very least the same features that Microsoft already has.
Rivalry among existing competitors
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