Microsoft Lumia - Situational Recap + Marketing Mix

4.1 Situational Recap

The Microsoft Lumia has a broad price range. The Lumia 550 and 650 are the budget range, and the Lumia 950 is the top-tier model. The Lumia 950 is loaded with Windows 10 operating system, 20MP camera and a device-pairing function called Continuum. Continuum can turn the Lumia into a desktop, and when paired with the increasing trend of cloud storage subscriptions, is beneficial to the portable lifestyle of the modern consumer. The Lumia 950 also comes with a unique system called Windows Hello, which scans your iris as a password substitute. An aspect like this is part of Microsoft’s unique selling proposition regarding the product. Statistics vary, but it is said between 79-89% of Australians own a smartphone, and 8% of that figure are using Windows phones. This can be considered an opportunity for Microsoft since it is projected that with each year more Australian’s will buy a smartphone. Microsoft’s two main competitors are Apple and Samsung, who collectively control 73% of the market share. Other lesser known competitors include Chinese brands Huawei and Xiaomi.

4.2 Marketing Mix

Product Lumia is a smartphone Unique operating system, Windows 10	Promotion Point-of-sales through retailers Advertising Social media
Price Affordable budget models – Lumia 550 and 650 High priced model – Lumia 950 and 950XL	Place Social media Online and magazine reviews Mobile phone retailers

4.3 SWOT

Strengths Strong grasp over businesses and educational institutions Windows is the primary operating system taught in schools Windows holds the majority of the market share for the most popular desktop operating system	Opportunities Appealing to a younger demographic, targeting ages 18-44 Point-of-sales commissions schemes to encourage retailers Emphasis on new features and use of own operating system Emphasis on interconnectivity via the Windows 10 OS. Appeal to price-sensitive consumers
Weaknesses Significantly low number of Windows            phone users in comparison to Google            Android and Apple’s iOS. Weak innovativeness in the smartphone field, not attracting customers.	Threats Losing more market share to competitors (Apple and Samsung) Competitors copying and potentially expanding on Microsoft’s ideas Negative reviews and press regarding the Lumia smartphone range

Microsoft Lumia - Stakeholder Analysis, Competitor analysis & Critical success factors for the industry

Stakeholder Analysis

To understand Microsoft’s vast stakeholder’s list we need to understand their mission when they first became a company. ‘To have a computer on every desktop in every home’. The enormity of this goal was the reason why Microsoft became so big. Everyone I know has used their software or typed in Word. It’s just a fact that Microsoft has a very large stakeholder base.

Microsoft sell distribute software through OEMs that pre-install our software on new PCs, servers, smartphones, and other intelligent devices that they sell to end customers. Some of the OEM’s include Acer, ASUSTek, Dell, Fujitsu, HTC, Hewlett-Packard, LG, Lenovo, NEC, Nokia, Samsung, Sony, and Toshiba. (Annual Report, 2011). “Many organisations that license our products and services through enterprise agreements transact directly with us, with sales support from solution integrators, independent software vendors, web agencies, and developers that advice organisations on licensing our products and services ("Enterprise Software Advisors"). Some of our distributors include Ingram Micro and Tech Data, and some of our largest resellers include CDW, Dell, Insight Enterprises, and Software House International. Our Microsoft Dynamics software offerings are licensed to enterprises through a global network of channel partners providing vertical solutions and specialised services. We distribute our retail packaged products primarily through independent non-exclusive distributors, authorized replicators, resellers, and retail outlets. Individual consumers obtain these products primarily through retail outlets, such as Wal-Mart and Dixons” (Annual Report, 2011).

Competitor analysis

Microsoft has many competitors, namely two big ones. Apple and Samsung. Together they have dominated the smartphone market and do not show any signs of giving up. ‘’With fierce competition in the electronics industry, Microsoft’s mobile is facing every kind of problems in development, smart-phone’s challenged from Apple and Google, also there has problems with products, research and development, marketing strategy and enterprise development strategy. Microsoft needs to plan its strategy as a “universal key” to open each locks’’ (Microsoft Corporation’s Strategy, 2015). As I mentioned before “iOS and Android, comprised 15.8% and 81% of the smartphone software market share, respectively. (‘Another Painful Reminder of Microsoft's Bungled Nokia Acquisition’ 2016). Microsoft is already at a disadvantage because of this overwhelming market dominance, and by replacing the android OS with their own windows operating system they have eliminated all the popular applications that would otherwise be fund on iOS and Android systems. “The Index revealed that 62 percent of active smartphone users have used their phone to replace other technology products including their digital camera and GPS navigation system, as well as games, the morning newspaper, photo album, letter box, catalogues and banking” (82% of Australian smartphone users are never without it, 2015).  Microsoft have limited applications on their software and have ditched Googles GPS or Maps application altogether as well as Androids contactless payment system. Apple has already implemented this into their devices so Microsoft is way behind the eight ball and need to consider some new ideas in order to gain more competitive advantage.

Critical success factors for the industry

To under the success of Microsoft we need to understand the organisation on all platforms. “In an interview with International Business Times in July 2013, Nokia vice president Bryan Biniak urged Microsoft to fix the various platform issues, such as the lack of certain key applications: "It's not just about the hardware, it's about the tools that are on the hardware. You can't sell a phone The Microsoft-Nokia Strategic Alliance Page 14 without the apps, you just can't." (Gilbert, 2013). Biniak explains that Microsoft needs not only to innovate as they have done with the continuum and other features they have added to the Lumia but also to compete with what customers want, and what they want is applications. It’s no secret that the success or failure of a product comes from brand image, price and advertising/marketing. However, there are some real key Pro’s for Microsoft in-terms of brand-image and price. They have a great looking phone that can do some really interesting and standalone stuff. However, no one really knows about it. The success doesn’t come from the advertisement of the product. “Seventy-two per cent of shoppers said they were already aware of the product they wanted to purchase in-store through their own research, rather than through advertising” (Harper, 2015). So where does Microsoft fall short? “Many have experienced the same situations as I have where you have to explicitly ask for a Windows Phone when you visit a carrier store. Windows Phones are not on display anywhere. The devices sit on shelves in the backroom, gathering dust. Just like the Microsoft Band at Best Buy, to the normal shopper Windows Phone just doesn’t exist, either. Salespeople at carrier stores have said, "No one wants them, no one is buying and they don't have any apps" (Trent, 2015). And how does Microsoft succeed in gaining market share? Well that can answered in many ways. However, I have one proposition, keep selling in bulk to businesses but tailor to an everyday customer’s needs. If Microsoft work on making the phone more consumer friendly with built in GPS and online banking Apps then people might start to consider the Lumia as an actual alternative to Apple or Samsung. Also Microsoft should consider investing in marketing to help push the products brand image so that salesmen at stores aren’t dismissing the product as an actual piece of garage. 

References:

Trent, R 2015, ‘Microsoft Band Retail Channel Suffers from Windows Phone-it is?’, Super Site for Windows, http://winsupersite.com/microsoft-band/microsoft-band-retail-channel-suffers-windows-phone-itis

Harper, J 2015, ‘Smart shoppers: online and mobile’, GoldCoast, p. 65-93.

GILBERT, D 2013, ‘Nokia: Microsoft Must Evolve to Make Windows Phone a Success’, International Business Times http://www.ibtimes.co.uk/nokia-microsoft-needs-evolve-windows-phone-succeed-494885.

‘Microsoft Corporation’s Strategy’ 2015, http://studymoose.com/microsoft-corporations-strategy-essay.

2011 Annual Report, ‘Distribution, Sales and Marketing 2011’, Financial Review, Microsoft Corporation.

‘Another Painful Reminder of Microsoft's Bungled Nokia Acquisition’ 2016 Emirates News Agency, p. 11-179.

82% of Australian smartphone users are never without it, 2015, Telecompaper Asia, 15-93.

Microsoft Lumia - SWOT Analysis by Mitchell Formica

Strengths

Microsoft is world leader of software development, holding the title as the world’s biggest supplier of computer software. “According to Steve Ballmer Microsoft Chief Executive (2013), Microsoft’s Windows occupy 91.49% sharing of the global PC operation system. Nokia has had powerful hardware design concept and abilities of manufacturing, also Nokia’s Lumia occupied approximately 82% of the market. So, acquisition of Nokia was a great record for Microsoft’s corporate strategy”.  (Microsoft Corporation’s Strategy, 2015).  See Appendix 1.1 for further details.

Weakness

Microsoft jumped into a market that was already occupied by two other large scale organisations with considerable market share. At the time most of the market shares have been taken by Apple and Android. “According to Bamburic (2013), in 2013, Window Mobile only occupied 2.9 % from the smart-phone market share, it is a bad record which compare with Apple’s 18.2 % and Android’s 74.4 %. (Bamburic, 2013).  See Appendix 1.1 for further details. Another weakness for Microsoft is that it is considerably hard to get people to change from an already existing phone with OS to a totally different format. Although everyone is most likely familiar with windows operating system it’s still not the norm to be using it on a mobile device and therefore makes for a harder substitute change option from the consumer’s point of view.

Opportunities

Following on from some weaknesses there are some opportunities for Microsoft. Whilst Android occupies a large amount of the market the loyalty from android users is considered unstable and can shift. Apple on the other hand are too expensive for some consumers offering no value option at the Lumia and Galaxy S7 level. “Window mobiles get a chance to attract those customers. Functional With the developing Information Technology, people see mobile as a necessity, and mobile phone is not just a communication tool, consumers concern about the multi-function and the brand of mobile phone” (Microsoft Corporation’s Strategy, 2015).  

Threats

Lastly we have some threats. Obviously we look to the competitors Apple and Samsung and even Google as they own Android. HTC is also a small competitor but a competitor none the less. They all are trying to gain market share and will therefore try to innovate work on new ideas and market their own brands tirelessly. See Appendix 1.1 for further details.

References:

Bamburic, M. (2013). What we know about Windows Phone 8.1 so far? [Online] Available From:http://support.techlogic.net/index.php?/News/List/Index/134. [Accessed: 28th February 2014].

‘Microsoft Corporation’s Strategy’ 2015, http://studymoose.com/microsoft-corporations-strategy-essay.

Microsoft Lumia - Pest Analysis by Mitchell Formica

Macro force analysis (Pest Analysis)

Political

Microsoft is impacted by many political factors including government, regional and international levels. Some of the activities that Microsoft take part in can actually be thought of as a political issue. “Most notably, Microsoft has attracted the attention of governments and political parties due to antitrust-related issues. A recent probe by China’s State Administration for Industry and Commerce into the ways Microsoft distributes its Internet Explorer browser and Windows Media Player and sells its Office and Windows software in China can be mentioned as a relevant example of impact of a political factor” (Dudovskiy, 2015).

Economic

Microsoft’s economic factors are based around two things. The first is the global economic crisis of 2008, which caused a huge blow to the world economy. Under the impact of the economic crisis, Nokia’s share price fell sharply which just made a great offer for Microsoft to purchase as a low cost. The second is America’s tertiary industry occupied for about 78 % of GDP, which the contribution of high-tech owned the most, the technology is crucial for the US which is the power source of economic development (Microsoft Corporation’s Strategy, 2015).

Social

Nowadays people are relying more and more so on mobile phones. Microsoft is gearing towards this change by implementing there software upon the phone so that people do not have to use their laptop devices for bigger programs like the office suite. The mobile phone is become more than just a symbol of communication. It is now a multi-functional tool that enhances our day to day lives in many ways. It is also affecting the consumer in psychological ways as well, as we move into more dependence on phones we lose the skill of remembering multiple things or decrease in communication as we look to our phones instead of our peers.

Technological

“Walking in front of others is the only way to survive in the high-tech field and the fierce market competition. High-tech products have rapid upgraded and short life cycle, it inspires higher requires to enterprises’ special application software and ability of continuing to update the hardware configuration. Nokia as a former mobile phone giant obviously hold numerous patents, specialized technical personnel and technical reserves the phone which is an advantage to help Microsoft to develop on smart-phone industry” (Microsoft Corporation’s Strategy, 2015).  

References:

Dudovskiy, J 2015, ‘Microsoft PESTLE Analysis’, Research Methodology, http://research-methodology.net/microsoft-pestel-analysis/.  

‘Microsoft Corporation’s Strategy’ 2015, http://studymoose.com/microsoft-corporations-strategy-essay.