Microsoft and Intel: Histories, Experiences, Organizational Structures, Marketing

Organizations in the same industry may take different paths, but others may collaborate to gain economies of scale and market dominance. Products, services, and market forces affecting firms determine their strategic posture. Both Microsoft Corporation and Intel Corporation are American multinational companies that operate in the personal computers (PCs) and mobile devices industry. The two have had converging and diverging histories as each has tried to exert market dominance. This essay will compare and contrast the two companies in areas such as histories and experiences, organizational structures, human resource practices, and marketing approaches.

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There are several similarities and differences between the histories of the two companies. The first similarity is that both have been dominant competitors in their respective market segments. Microsoft started dominating the PCs operating systems market in the 1980s, while Intel capitalized on the popularity of PCs to establish market leadership in the microprocessors' segment. Although each company has remained in their market segments for a long time since their inception, they have diversified into other markets. Microsoft entered the PC production market in 2012, despite being a predominantly software manufacturer. Additionally, Intel diversified into other areas such as software and services. One interesting historical fact about the two corporations is that they have collaborated for many years. The two started working together in the 1980s when they entered into an agreement that allowed Intel to produce processors for all PCs that used Microsoft's operating systems (Casadesus-Masanell & Yoffie, 2007). Since they had the best quality products in their respective market segments, their cooperation provided them with a competitive advantage due to economies of scale and market reach. Despite their cooperation, their parting was imminent because Intel did not seem to have capabilities to produce processors for tablets produced by Microsoft. Its attempt has produced dismal results as compared to the performance of Android devices that use ARM processors. One difference between the companies is that although Intel has maintained its leadership in the semiconductor segment throughout its history, Microsoft has lost its overall operating systems market share leadership to Android.

 

The organizational structures of Microsoft and Intel differ, but have aspects that are similar. Microsoft uses a divisional structure where its organization is done according to product lines. According to Bao and Wang (2012), organizations using the divisional structure divide roles and responsibilities by geographic regions, markets, or product lines. Microsoft's divisions include server and tools, online services, Windows, Microsoft business, entertainment, and devices. The divisions have autonomy as they deal with specific products and services. In turn, Intel uses a matrix organizational structure that combines functional and divisional elements. The structure has divisions such as information technology, human resources, legal, knowledge management, finance, change and control, common directory information management, data warehousing, and cost reduction teams. Cross-functional teams complicate the structure and differentiate matrix from the divisional structure. Similarities between the two structures include the presence of boards of directors and various committees at the corporate level. Microsoft has four committees with distinct functions, which include audit, responsibilities and calendar, compensation and governance, as well as nominating committee charters. Intel has four committees that include audit, executive, finance, compensation and corporate governance, as well as nominating committees. The work of the committees and the boards of directors is to ensure proper governance structures that allow transparency and adherence to laws and regulations. As such, both companies focus on guarding the welfare of their shareholders by strengthening the existing systems for wealth creation and maximization of shareholders' return.

Both Intel and Microsoft have varying approaches to human resources and striking similarities. Microsoft uses platforms such as social media, referrals from the current personnel, digital job placement on its website, and other traditional channels to attract talent. After hiring, Microsoft develops its employees depending on its business priorities in order to meet customer and industry needs. Learning for current employees takes place through a portal that displays various aspects such as training schedules. Such information allows workers to plan their time. The corporation has a talent retention strategy that focuses on employee benefits. Matching employees' needs with motivational packages can increase their engagement and willingness to stay (Arora, 2015). Microsoft has a dashboard of benefits for storing employees' various needs and preferences. The information allows the company to offer appropriate motivational packages and benefits. Microsoft's HR approach is aimed at reflecting its technology-based strategies and attracting the millennials that will form the bulk of the workforce. For instance, prospective employees have access to the company's candidate experience app on their mobile devices. They can access interview schedule and details about their interviewer. Such an app equips them with prior knowledge on what to expect during the interview. Intel's HR strategy focuses on attraction, development, and retention of employees. Intel attracts its workers through different channels such as trade shows, industry conferences, job fairs, and employee referral programs. As such, one of the similarities between the two companies is the use of referrals to fill vacancies. Intel has an employee portal for services and benefits, which is a feature similar to that of Microsoft. Intel maintains its employees' competitive edge by training them on the job and providing them with tuition assistance. Training at Intel is different from that at Microsoft because it is manual and involves managers training their subordinates physically. Intel prevents high employee turnover by offering attractive motivational packages such as personal and divisional awards to recognize high performance, work-life balance, on-site day care, dry cleaning services, as well as wellness and health programs. Both approaches have placed the firms at competitive positions because they are among the most preferred workplaces.

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It is imperative to understand components of the marketing mix to understand marketing approaches that both Intel and Microsoft use. The components include product, place, price, and promotion. Microsoft sells operating systems that most PCs use. The versatility of Microsoft's products empowers the company for mass production to meet the high demand. The main products are Windows operating systems that almost every PC can utilize. Consequently, Microsoft standardizes them for each market segment. The ‘place' in the mix refers to the market where the firm sells its commodities. Microsoft targets both large and small Original Equipment Manufacturers (OEMs). The OEMs pre-install the software on new PCs, tablets, smartphones, and servers. Microsoft concludes agreements with large OEMs so that their demand drives production. Microsoft sells to small OEMs through its operating system distribution channel. Additionally, the corporation serves its clients through its online platform for support services. Moreover, those who purchase its cloud-based services access them through the company's digital platform. Other customers that do not fall under the two categories include application developers, individuals using PCs, and internet service providers. Since the company produces products in bulk for mass consumption, its prices are relatively affordable. It promotes its goods and services through various channels such as digital and traditional channels.

There are numerous similarities between Intel and Microsoft in their marketing practices. Like Microsoft, Intel sells its products to OEMs and people who own PCs and mobile devices. The company also concludes contracts with large manufacturers for long-term contracts and utilizes traditional distribution channels to reach the mass markets. Products that the company sells include microprocessors and other electronic hardware. The two corporations also use digital and mainstream media to promote their offers. Prices are also affordable because of their bulk production. Therefore, one difference between Intel and Microsoft is what they offer to the market. Another difference concerns the fact that the nature of their commodities requires them to adopt different marketing strategies. The operating systems that Microsoft sells are visible to users every time they use their electronic gadgets. However, Intel is at a disadvantage because its microprocessors are inside the hardware beyond the users' reach during use. As such, Intel may remain in the background, which may harm its brand equity. Due to such uniqueness, Intel has started rebranding, using everyday objects to demonstrate how its work affects people's daily lives (Walker, 2016). The rebranding objective is to appeal to the young generation and remain relevant in the minds of its target customers.

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In conclusion, similarities in the two companies' history include their dominance in their respective market segments and their diversification strategies. They collaborated in the past, but their cooperation is almost over. Intel is still dominant, but Microsoft has lost its overall operation systems market share leadership. Microsoft's organizational structure is divisional, while that of Intel is a matrix. Both have boards of directors and various committees. Microsoft's human resource practices involve talent attraction through social and traditional media, referrals, and website, while Intel uses job fairs, conferences, referrals, and trade shows. Microsoft develops its talent through an online portal, while Intel uses an on-the-job training approach. Both retain talent by using a combination of motivation packages. Similarities in their marketing approaches include targeting similar clients, using the same promotional means, and employing similar pricing tactics. The difference concerns their value proposition.

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