WAC II: Group Assignment
Microsoft Search– Competitive Analysis
Group 9, Section E
Ankur Gupta – 2010PGP050
Arunkumar Pasi – 2010PGP069
Manish Mahakalkar – 2010PGP177
Pranabesh Chatterjee – 2010PGP254
Pritom Pangging – 2010PGP267
Swapnil Kumthekar – 2010PGP403
Vikas Deswal – 2010PGP416
Microsoft Corp has been around for more than 30 years now and still continues to have high profit margins in software segment. As the company is maturing, its growth has slowed down as compared to initial stages, but the power the computer software maker has over the flow of the world's information is very formidable. On the other ...view middle of the document...
2 |58.6 |61.8 |63.5 |
|Yahoo! |23.5 |22.4 |20.6 |20.4 |
|MSN/Live |12.3 |9.8 |8.5 |8.3 |
|Other |9 |9.2 |9.1 |7.8 |
Referring to the above figure, it is quite evident that the market share of Microsoft is declining while the share of Google is consistently increasing in search engine category.
OPPORTUNITY FOR MICROSOFT
Microsoft has an opportunity to gain strong position in Internet Search Engine and related advertising market which has high future prospects, and subsequently challenge Google’s dominance in the long run.
The search industry is a high margin industry with around 60-70% gross margins. But at the same time, the industry is dominated by few large players like Google and Yahoo!. Due to this dominance and high initial investment in human and capital resources, the barriers to entry for new players are high. Due to exorbitant increase in web pages and growing expectations of the consumers, the search is becoming complex and sophisticated.
The search dynamics are expected to change with the advent of “Software as a service” and “Cloud Computing”. Moreover, in such an industry, sustaining competitive advantage is difficult as the technology can be easily emulated. When Microsoft launched advanced text and context analysis of online product reviews, the feature was replicated by Google within few months.
After analyzing the situation in Search market which is having three main players, Google, Yahoo and Microsoft, it is evident that this market is growing in terms of online advertising and search and expected to become $132bn in revenue. To grab these opportunities we have considered following alternatives for our solution.
1. Develop a new search engine by investing highly in R&D and go for frontal attack strategy
2. Acquire small players like Ask network having around 4% market share
3. Reinitiate acquisition deal with Yahoo, but only the search and advertising operations
4. Increase product capabilities by continuous innovation in search engine segment to move a step ahead of Google
5. Effectively undertake marketing and promotion activities by allocating more funds
6. Improve current search engine in terms of speed and accuracy plus enlarge the database
EVALUATION OF ALTERNATIVES
We have set criteria for evaluation of alternatives to finalize the solution for our problem. This criterion is based on following parameters and its respective weightage:
← Feasibility (20%)
← Value addition (30%)
← Time of implementation (20%)
← Competitive Threat (30)
Value addition and competitive threat to Google will be the highly valued, as this is our main target to achieve which we have done in past in PC industry. Based on above parameters we generated the table...