Microsoft is the worlds most successful software com-

pany. Bill Gates and Paul Allen founded it in 1975 with

the original mission of having a computer on every desk

and in every home, running Microsoft software. Today,

Microsoft is the fifth most valuable company in the world

and has a brand value of $61.2 billion.

In the early 1980s, Microsoft developed the DOS

operating system for IBM computers. The company lev-

eraged this initial success to sell software to other manu-

facturers, quickly becoming a major player in the industry.

Initial advertising efforts communicated the companys

range of products, from DOS to Excel and Windows, and

unified them under the Microsoft brand.

Microsoft went public in 1986 and grew tremen-

dously over the next decade as the Windows operating

system and Microsoft Office took off. In 1990, Microsoft

launched Windows 3.0, a completely revamped version

of its operating system, including applications like File

Manager and Program Manager that are still used today.

It was an instant success; Microsoft sold more than 10

million copies of the software within two years, a phe-

nomenal accomplishment in those days. In addition,

Windows 3.0 became the first operating system to be

preinstalled on certain PCs, marking another major mile-

stone for the industry and for Microsoft.

Throughout the 1990s, Microsofts communica-

tion efforts convinced businesses not only that its

software was the best choice but also that it should

be upgraded frequently. Microsoft spent millions in

magazine advertising and received endorsements from

the top computer magazines in the industry, making Microsoft Windows and Office the must-have software

of its time. The 1998 slogan Where Do You Want to Go

Today? promoted not individual Microsoft products like

Windows 98 but rather the company itself, communi-

cating that Microsoft could help empower companies

and consumers alike.

During the mid-1990s, Microsoft entered the notori-

ous browser wars as companies struggled to find their

place during the Internet boom. Realizing what a good

product Netscape had in its 1995 Navigator browser,

Microsoft launched its own, Internet Explorer later the

same year. By 1997, Explorer had grabbed 18 percent of

the market.

Over the next five years, Microsoft took three major

steps to overtake Netscape. First, it bundled Internet

Explorer with its Office product, which included Excel,

Word, and PowerPoint. This meant that consumers

who wanted MS Office automatically became Internet

Explorer users as well. Second, Microsoft partnered with

AOL, which opened the doors to 5 million new consum-

ers almost overnight. Third, Microsoft used its deep

pockets to ensure that Internet Explorer was available

free, essentially cutting off Netscapes air supply. By

2002, Netscapes market share had fallen to a meek

4 percent.

Microsofts fight to become the browser leader

was not without controversy; some perceived that the

company was monopolizing the industry. As a result,

Microsoft faced antitrust charges in 1998 and numerous

lawsuits based on its marketing tactics. Charges aside,

the companys stock took off, peaking in 1999 at $60

per share. Microsoft continued to release new products,

including Windows 2000 in 2000 and Windows XP in

2001. It also launched Xbox in 2001, marking its entrance

into the multibillion-dollar gaming industry.

Over the next several years, Microsofts stock price

tumbled by more than $40 a share as consumers waited

for the next operating system to be released. During this

time, Apple made a strong comeback with consumer-

friendly products like Mac computers, iPods, iPhones,

and iTunes. Apple also launched a successful market-

ing campaign titled Get a Mac that featured a smart,

creative, easygoing Mac character alongside a geeky,

virus-prone, uptight PC character. Apples campaign

successfully converted many consumers and tarnished

Microsofts brand image.

In 2007, Microsoft launched the Vista operating sys-

tem to great expectations; however, it was plagued by

bugs and problems and the companys stock and image

continued to slide, helped by the worldwide recession of

20082009. In response, Microsoft created a campaign

titled Windows. Life Without Walls to help turn its image

around. Its new messagethat computers with Microsoft

software were more cost-effective than the competition

resonated well in the recession. Microsoft also launched

a series of commercials that boasted, Im a PC and fea-

tured a wide variety of individuals who prided themselves

on being PC owners, hoping to improve employee morale

and customer loyalty.

In 2009, Microsoft launched Windows 7, an improved

operating system, with the campaign Windows 7 was

my idea. Four years later, it was operating more than 30

stores like Apples across the United States and Canada.

Jonathan Adashek, general manager of Communications

Strategy, explained, Weve welcomed more than 15 mil-

lion customers and counting so far, and have learned a

lot from them. Having this direct connection to our cus-

tomers has really helped us better understand their tech

needs. Travis Walter, general manager of Microsofts

International and New Store Formats, agreed, In person,

you get a very different experience and its one weve

been very delighted to provide. When you see our tech-

nology in personwhen you can touch and feel ita light

goes off.

After the recession came to an end, Microsofts image

and stock started to recover, thanks to the success of its

retail stores, effective marketing, and a wide range of new

product launches. Microsoft went after Googles domi-

nant position in the search marketplace, for instance, with

a search engine called Bing, and it entered the growing

mobile industry with its Windows Phone mobile operat-

ing system. The companys 2011 expansion into smart

phones surprised many analysts, but Microsoft hoped

the smart phone and Windows Phone mobile OS would

forge a strong connection with its consumers around

the world. It continued its innovation momentum in 2012

with the launch of Windows 8, Windows 8 Phone, and

a computer called Surface Tablet. The tablet impressed

consumers with a detachable keyboard that also served

as its protective cover.

Today, Microsoft offers a wide range of software,

mobile, and home entertainment products. Its most prof-

itable products continue to be Microsoft Windows and

Microsoft Office, which bring in approximately 80 percent

of its $86 billion in annual revenue.

Please analyze the Microsoft case study answer the questions below. Please also utilize other secondary sources of information to support your answers.

Q.1 Evaluate Microsofts product and marketing evolution history over the years. What has the company done well, and where did it falter?