Microsoft vs Apple
Document Type:Research Paper
Target and Benchmark selection……………………………………………. 5 ii. Data mining strategy…………………………………………………………6 iii. What is Microsoft, Inc. 7 iv. General environment……………………………………………………………17 a. Demographics………………………………………………………………. 18 b. Socio-cultural………………………………………………………………. 19 c. Unions………………………………………………………………………. 25 c. Associations…………………………………………………………………26 d. New entrants…………………………………………………………………26 e. Interest groups………………………………………………………………. 39 c. Cash management………………………………………………………. 41 d. Asset management………………………………………………………. 43 ii. References Introduction Some say times were simpler without all these fancy and complex tools we now use in our daily functions. Others might say that these tools have made things simpler. I say it depends on how you make use of what is at hand. Back then I did not take the time out to understand the differences in software, so, it was a simpler time for me. But as I grew older, understanding the differences made things easier for me socially and educationally.
and Microsoft are two top companies with almost identical success in the computer software industry, both having improved their developments tremendously over the past five decades, molding the technological world into the world we live in today. The truth is, the world is developing at a fast pace, almost too fast that one cannot afford to slow down. Keeping up to date is the best way to ensure things run as smooth as possible. Thanks to Microsoft and Apple Inc. we can do that. Microsoft’s electronic devices and software and the technology intrigued me they will come out with in the future. The first Apple product I owned was the iPhone 3Gs, which was an amazing cellular device. This was when having an iPhone was a trend, the commercials and advertisements with the iPhone were huge with the 3Gs.
That is when I enjoyed the iPhone by Apple, and as well as Microsoft also became fascinated by the Apple products. My first Apple Laptop was the MacBook Pro, which is a great laptop. Van Ness book, Management strategy, and performance. Combination of research and information was used in this report. I implemented three components to help assist in the success of my research; did the company position itself for future growth and prosperity, did the company complete the financial goals, and last but not least did the company fulfill its social responsibility. The research for the report was used in the preparation phase to acquire data on Microsoft and Apple. The information that was gathered was able to have my research flow and have a great touch to it.
Gates lived with his two sisters in Seattle born of Mary Gates and William H. Gates II, a school teacher and a Seattle attorney respectively. Mary Gates served as a member of the governing board of the University of Washington as well as the chairperson of the United Way International. Coming from well-established parents, Gates grew up with the tools that helped him at such a young age to pursue an interest he had in software. He attended both public and private elementary school called Lakeside and at the age of thirteen years he began to program computers. He is currently worth $19billion and owns over 100 million shares in Microsoft and founded the Vulcan Ventures company which aided him in researching potential future investments.
His list of investments is colorful and quite intriguing ranging from owning the second largest cable company in the nation known Charter communications, Ticketmaster, a heavy investment in DreamWorks, NBA’s Portland Trailblazers, Oxygen Media and owning NFL’s Seattle Seahawks. He also established humanitarian foundations to help preserve the forest, community service, fund medical research, performing and visual arts. CEO and Board Microsoft has transformed into a powerhouse for computer programming. Under the innovative leadership of Gates, it has constantly improved to become a faster and more efficient processor. Scott Guthrie (Executive Vice President, Microsoft Cloud and Enterprise Group) 7. Kathleen Hogan (Executive Vice President, Human Resources) 8. Amy Hood (Executive Vice President and Chief Financial Officer) Board of Directors With such an expansive company comes a sizeable board of directors.
There are 14 board members not including the company’s senior leaders, altogether making 30 people that all play a major role in every aspect of the company. These leaders work hard to ensure the company’s success. • Hugh Johnston He joined the Microsoft company’s board in 2017, and currently serves as the chief financial officer and vice chairperson of the PepsiCo, which is a global food and beverage company. • Reid Hoffman He joined the company’s board in March 2017, is a partner Greylock Partners and serves as a partner of the several privately-owned companies such as convoy, Edmodo, and Block stream. He is an accomplished investor, entrepreneur and executive playing a fundamental role in some of leading consumer technologies. • Teri L. List-Stoll She joined the company’s board in October 2014, serving as a non-executive director.
Helmut Panke He joined the company’s board in November 2013, serving as a non-executive director. He works on the Singapore Airlines Limited board and is the chairperson of Regulatory and Public Policy Committee in the company. • Sandra E. Peterson She joined the company’s board in 2015, and she is a chairperson of the Johnson & Johnson, a global healthcare company. In the Johnson & Johnson, she is instrumental in strategic initiatives, global operating infrastructure, and consumer-facing businesses. chief executive officer and president. In 2011, chosen to the company’s board has served in numerous positions since joining the company in 1996. He also serves as President’s Export Council’s vice chair and the Brand USA past former chair. • John W. Stanton He joined the company in 2014, after serving as the Trilogy Equity Partners chairperson.
and Microsoft, Inc. are both business establishments which deal with computer and software issues and therefore would be affected by any changes and regulations which may be issued to the industry. Since the 1990s, computers have become integral components in everyday lives of people all over the world. Even though there are technological gaps in some parts of the continent, computers have taken a central position in easing life and making it efficient. This is especially in the communication and entertainment industry where Microsoft, Inc and Apple, Inc. Computers software’s are delivered as complete packages and are designed to undertake discrete tasks. There are categories of application such as web browsers and word processors, and operating systems such as windows, utilities, Linux.
Currently, their multiplying platforms which need newer and more advanced software. In this case, globalization and Artificial Intelligence is having its mark in the software industry which includes the need for self-operating systems. The increase of wireless technologies has contributed to the upsurge in demand for various software technologies. Many companies are highly affected by the external environment and can dictate if the company will celebrate its first birthday or a silver jubilee. However, this is an aspect which is mostly out of control of many of the top managers of any company, as there are many factors which are at play. Innovation and creativity spur competition and every business must understand that they have to keep advancing lest they become irrelevant.
That is why managers and directors have to be aware and notice any changes which are happening in the industry. Any changes or trends should be responded within an appropriate and have a constant address of the problems which are affecting the industry. 5 billion. Regarding the category of software and programming, Microsoft, Inc is in the first position worldwide, having sales of approximately $ 86. 6 billion. However, the elements could fail to pose serious challenges to the firm because the company has evolved itself to become one of the most indispensable companies in the computer and software industry. The company has therefore changed the way in which it deals with sales and packaging of their products and has embraced the 21st-century products trend.
The United Nations Department of Economic and Social Affairs estimates the current world population to be 7. 6 billion people, whereby 2030, it is expected to rise to 8. 5 billion and by 2050, to be 9. 8 billion. There is a huge outburst of a young Tech-savvy generation who will be ready markets for Microsoft products and the current generation which has already embraced technology. Many of the developing nations consumer cultures are that they are more inclined into trusting a product by being recommended by a friend or another user and therefore, the marketing procedure of a company should consider that so that it breaks through in new market territories. Technological The 21st century has seen an outburst of many innovative and creative technologies and the Microsoft, Inc.
is doing a great job in staying afloat in the technological world. In the age where the competition is tough, and there are constant interruptions, the computer, software and programming companies have become integral pieces of human survival. The software sector in 2017 grew by a margin of 4. Cybersecurity has become one of the most challenging issues in the world today, and consumers are looking for products which can provide such security. The rising public cloud has had serious challenges with many consumers worried about the products they have and how safe their data in the devices are. For example, the Apple, Inc. company is being faced with allegations that it slower older phones. This is a breach of contract between the consumer and the manufacturers leading to mistrust and overall rejection of their products in the future.
9% in the first quarter of the year. However, in the first quarter, the company had increased sequential top line increased and rose to a margin of about 20. The company does well when compared to other players in the software and programming industry. The company averages in the rise of sales of its products by 8. 41% which compares to the trailing other software and programming companies average of 5. The company is committed to corporate integrity and responsibility is what defined the compliance and ethics program. According to its integrity mantra, the company is committed to building trust with other corporate organizations, the government, consumers, communities, investors, representatives among other stakeholders. The chief legal officer of Microsoft, Inc. is committed to the compliance aspect of the company.
The Ethics and Compliance Program and Standard’s of Business Conduct are endorsed and is fully supported by the company’s board of directors. It is dedicated to increasing the customer experience by making services of the company accessed clicks away on the internet. Digital customer experience ensures that record numbers will be attended in quick times and that they have much of their products at their convenience. One of the issues which Microsoft, Inc. has taken into consideration is the downloadable applications and software they have on the internet. Many of the consumers can access the products they need in the company at their convenience on the internet. The MSP goal it to have a new value of the experience which they build between the producer, supplier, and customer.
This is essentially in have new efficiencies to the supply program and enable customers to enjoy their products and services. The MSP department of Microsoft, Inc. has the following objectives which ensure streamlined and efficient product and service delivery. The MSP ensures that there are suppliers of all the services and products so that the customers will never have a shortage. Here the contract employees had both same privileges of leave the same as the traditional employees. In this case, the company worked its way to ensure employees are satisfied with their jobs and increase their productivity through incentives. Companies should ensure that their employees are satisfied because they are the backbone of the company and they are critical to the growth of the company.
Associations Association made by a company are critical to maintaining a good relationship with the community which operates in and target markets of their products. Microsoft is passionate in the helping communities which they operate in, and support in numerous ways. Interest Groups In the software and programming industry, Microsoft, Inc is a key player it would be surprising if the company does not have interest groups or be against them. It is clear that the industry is highly concentrated, and it would attract enemies and friends in equal measure. It controls a sizable amount of the revenue generated into the country and has many key players in the economy tied to it. There those interest groups with the company who is with the intention of making the company better in its production of services.
For example, in 2012, it has the Z3 Special Interest Group which was intended for calling in participants to the Microsoft Research Center in Redmond to give their views on the Z3 users. Microsoft, Inc faces competition from other established and emerging companies such as Oracle, the International Business Machines (IBM), SAP, Symantec among others. Those are some of the companies which would take over as technological giants incase Microsoft sinks. Closer to the production of computers, the Apple, Inc. is Microsoft’s closest challenger who would take over the customer base. Understanding the competitive market can be deduced as one of the key elements which have made Microsoft remain a leader in the industry. Quantitative Analysis The performance analysis of Microsoft, Inc.
will start with the quantitative analysis of the company financial aspects. This is in both the intangible and tangible aspects of the company. The cross-sectional, trend analysis, and vertical analysis of the company, or the benchmark analysis aim is to evaluate the four fundamental dimensions of performance. They include the share value management, profit, equity cash management, asset management and debt management. These are factors which every company’s top management team takes into considerations seriously and would have an impact on its health if it is not handled shrewdly. Profit management of Microsoft, Inc. was analyzed in three key areas which include the gross margin, net profit margin ratio and operating efficiency. Revenue productivity grade: 4. 5 The revenue productivity of any company is evaluated on how each dollar gained by the company is translated into profit.
This is an indication that Microsoft, Inc. has had a steady improvement while Apple, Inc, slumped in two subsequent years. I have given a score of 3 to Apple, Inc. due to its attempt to cure the deterioration of its net margins but still lower than that for Microsoft, Inc because the company registered a steady increase and improvement. One of the major issues which resulted to the adjustment of Apple, Inc. improved from 2015 to 2016 by a margin of 4. 24% and from 2016 to 2017 by a margin of 1. On the part of Apple, Inc. the operating efficiency deteriorated in the later fiscal years, as from 2015 to 2016, registering 2. 64 % and 1. had a tax rate of which reduced in subsequent years. That is as from it reduced from 34.
12% in 2015 to 14. 95% in 2016 and reduced further to 8. 90% in 2017. 0 The ratio of return equity is the measure of the return of each dollar investment to the owners in the company. This is then used to determine how a company is profitable to those in who have invested their money in it. An increase is desirable and shows that each dollar is profitable, and the company is producing. The return on equity of Microsoft, Inc increased from 14. 36% in 2015 to 22. 87% in 2017. This is a reduction of return on equity on Apple, Inc. which means the company is not profitable. Microsoft, Inc. had a quantum leap in return on equity from a record low to a higher percentage. 71% in 2015, increasing to 14. 18% in 2016 and to 15. 46% in 2017.
This shows a steady increase of the company return of earned to total ratio from a slump which happened in 2014, where the company deteriorated from 21. 11% to a record low of 10. 5 The total equity (decrease or increase), is the determination of what the company’s stock shareholders changed from the previous years. For Microsoft, Inc. the company registered a steady increase wherein 2015 it was 10. 51%, increased to 14. 18% in 2016 and 15. 5 on total equity compared to the dismal performance of Apple, Inc. Basic earnings per share grade 3. 0 Basic earnings per share of a company is an evaluation of the value of each share outstanding by the end of the year. The basic earnings per share are usually viewed progressively on how it impacts the market value and desirable if it is increasing.
For the Microsoft, Inc. , therefore, I gave Microsoft, Inc. a grade of 3. Apple, Inc. performs better at basic earnings per share than Microsoft, Inc. even though Apple’s, Inc. Having larger number or increased rate is usually desirable in this case. Microsoft, Inc. had upward mobility wherein 2015, it increased from 1. 48 to 2. 10 in 2016 and capped at 2. If there is an increase in dividends per market share means that the top management believes that there can be sustained growth. In the past 12 months, Microsoft, Inc. had an increase per share growth of 8. 30%, where during the last three years, the average dividend per share was 12. 70% per growth rate per year. I gave Microsoft, Inc. a 4. 0 in this because they have steadied their market value which is on the increase.
Therefore, there is sense to believe that shareholders will be interested in investing in Microsoft, Inc. because it shows indication of increase, not a higher value which fluctuates. 34% in a year. For Apple, Inc. the dividends per payout ratio for the last 13 years was 0. 29%, while the lowest registered was 0. However, the average in the 13 years was 0. Apple, Inc. for the past 13 years has had a highest of 2. 34% and a lowest of 0. 38% and an average of 1. Currently, it is trailing at 1. This shows that Microsoft, Inc. was doing better than Apple, Inc, having more returns in the current year. Therefore, I gave Microsoft, Inc. a 4. 5 because it was performing better than Apple, Inc, and had more attraction on investors. I was unable to get approximate market projections of the Apple, Inc.
but it has a larger value market of $756 billion caps while the one of Microsoft is at $417 billion market cap. However, to reach this valuation, some factors will have to be considered. I have given Microsoft, Inc. a 4. This shows that both companies have the ability to have their stocks to move against the normal market value. Therefore, since both of them have shown the volatility of their stocks, I gave Microsoft, Inc. a 3. 5, for being better than Apple, Inc. however, to have a company which is registering a beta with a negative value is very rare. a value of 3. 5 because, despite the fact that its total debt had increased over the years, it was much less than the one of Apple, Inc.
Total debt to total assets grade 2. 5 This is leverage ratio which shows the debt of the company to the assets which it has. Currently, the debt to assets of Apple, Inc. 5 Current assets to total assets grade 4. 0 This is an aspect which is used to measure how the assets of the company are distributed. For Microsoft, Inc. the current assets to total assets increased from the subsequent years increased by 0. 66, to the year 2017. for the last 13 years has registered a higher debt to equity levels of 1. 24 and lowest of 0. The median is 0. Currently, it stands at 1. 02 in an increase over the years, which is higher than the average one 13 years. 0 Working capital is a measure of how much the liquid assets the company after pays off its obligations.
In this case, a rise in number is usually desirable. Microsoft, Inc. had a fluctuating working capital in that as of 2015, the company had $1513 million, which reduced dismally to $- 2076 million and rose to $1652 million in 2017. For Apple, Inc. has had a reducing effect on the cash form investments registering -$ 56, 274 million in 2015, to -$45,977 million and further to -$ 46, 446 million. For Microsoft, Inc. the cash from investing was in such -$23, 001 million in 2015, to -$23, 250 million in 2015 and then scaled up in negative to -$46, 781 million. I give Microsoft a 3. 5 because it seems the company is attempting to gain more from their investments. For this case, I gave Microsoft, Inc. a 4. 5 because it is gaining from its operations over the years, rather than Apple, Inc.
which is receding. Asset Management Asset management is the ability of the company to manage expensive infrastructure which is used to generate revenue. For Microsoft, Inc. it has been on the increase in that it was 7. 00% in 2015, increased to 9. 08 % in 2016 and 9. 87% in 2017. An increase in number is desirable, and therefore a better company will have the more net income to total assets. For Microsoft, Inc. the net income on total assets has been on the decline, in that it was 0. 54 in 2015, reduced to 0. 46 in 2016 and 0. It is the calculation of the total number inventory divided by the number of goods sold regarding cost. The Microsoft, Inc. has been on the increase where as of 2015, it was at 11. 85, then increased to 12. 72 in 2016 and capped at 15.
This is where the company culture of the company is most visible, and one can gain a deeper understanding of a company through its qualitative analysis. The concept of qualitative analysis of a company is usually in two fundamental subsections of the company which includes strategic positioning, and organizational citizenship. Organizational citizenship This is a combination of behaviors and relationship between the top management team and the company. In this part, the paper will look into how Microsoft, Inc. has relations with its employees, competitors, government, stockholders, community and its directors. This aspect is usually reffere3d as the lost decade of Microsoft, which saw it being toppled by other technological giants in the industry. The company, however, has turned around and initiated aspects which have increased employee satisfaction, created avenues where employees can develop a sense of belonging such as employee engagement platform.
It has acquired online platforms like LinkedIn, where employees can feel themselves, improve their social welfare and contribute in making of the company better. I have given Microsoft, Inc. a 4. The company received complaints from all over the world and recalled over 4 million pieces it had sold. This shows that the company has the interest of the client at heart. Also, the call center is very effective on clients as they interact with clients promptly, and that they create a client to service direct provider contacts in most of their companies. Therefore, I gave Microsoft, Inc a 4. 0 because it has ways in which it can improve it can improve its products through customer feedback and response. 0 Investors need to know that the company which they are giving their money into is rewarding and for this matter, stakeholder need always to know how profitable the company is.
Microsoft, Inc. has an online platform where investors can log in and follow how the company is performing on the stock market and also gives quarterly reports regarding the performance of the company. I have given the company to a 4. 0 because the company has had a steady increase in the stock market, which is a desirable thing for the stock market. 0 Microsoft, Inc. competitive advantage is in two key areas in the in the industry. One of the advantages is the foundation itself, which is the leader and software industry because, for the company, one feels that everything is fit together. It is one of the most powerful brands in the world, and its founder is one of the notable people on the planet.
It has resources and has discipline and culture which makes it an admired brand in the world today. As of 2017, the company had several products which towered over the other players in the industry. It has a 3D software, the Microsoft HoloLens, and a line of PCs which have futuristic operations. Also, its cloud computing and artificial intelligence are one of the critical areas where the company is most innovative and is positioned to have more returns. Considering that Apple, Inc. has shrinking sales in shipments would wide and reducing a number of products being sold worldwide, Microsoft stands as the most innovative company in the world. There were several factors which were highlighted in the quantitative analysis, and the following was realized.
Equity, Profit and Share Value Management The overall performance of the company in this section is a 4. 5 because the company is on the path to profitability. For the last three years, the company has registered an increase in its operations in this aspect. This is important because the company’s benchmark has its Equity, profit and share values on the decrease in the last three years. 0 in the category, but as a giant in this industry, there is room for improvement and reduction of debt to zero. Cash Management grade 4. 0 The company has shown much credibility in handling cash flow in its operations. It has manageable liquidity which means that they can exploit opportunities when they arise. Also, there is the belief that the company has avenues to invest its money, in such a way that it does not have more liquid assets which are not productive.
Having a sound strategic positioning of the company gives it a wide spectrum of choices for future alignment and endeavors, leading to growth and productivity. Organizational Citizenship grade 4. 5 The relationship in which the company builds within its operational spectrum is fundamental in creating a reputable brand and a sense of belonging to its clients. The corporate and consumer cultures are essential to having a successful and a well-performing company. The organizational citizenship of the company creates a sense of direction which is critical to the continued success and overall performance of the company. However, having other top companies vying for top position in the technological world, the company need to continue with its innovation and creativity. Overall Commendation Microsoft, Inc. is no doubt a leading company in computer, software and programming industry and commits to continue being a leader in this section.
It is a company that has more over 40 years’ experience in the industry and has seen the best and the worse of the industry. Based on its resilience, an indication of rising against challenges and corporate structure, I would encourage everyone to consider Microsoft, Inc. is bright, and they geared towards making the technological behemoth highly rewarding investment. The figure below shows the market share advantage of Microsoft, Inc. , and Apple, Inc in overseas sales and the United States. The company is riding high on this growth on cloud computing, where the company CEO has on record saying that the commercial cloud computing currently exceeds $18. 5 billion and it is expected that the company will surpass its target in the fiscal year of 2018 to $20 billion.
The company has risen in dividend yield with a margin of 15% for the last five years, which is an indicator that the company is working its way to profitability. The company has indicated that it intends to raise its dividend payout from 39cents to 43 cents, making the yield to 2. Given the high return on equity and strong cash flows, there is a sense in which one expects to have Microsoft, Inc. to have increased dividend returns. This is, therefore, better for investors because they can be assured that they can have better returns on their investments. com. Retrieved 26 January 2018, from https://www. microsoft. com/en-us/about/default. aspx Alexander, M. Retrieved 26 January 2018, from https://www. infrontanalytics. com/fe-en/US0378331005/Apple-Inc-/beta Apple Inc.
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