Absence of switching costs to substitutes. This is because according to its mission ‘to empower every person and every organization on the planet to achieve more’, Microsoft products and services are highly convenient to use.ģ. The level of buyer propensity to choose substitute products or services to Microsoft’s products and services can be assessed as low. Indirect substitution for Microsoft gaming and recreation products, on the other hand, include but not limited to music, movies, sports, spending time with friends and family members etc.Ģ. Indirect substitution for Microsoft products and services belonging to productivity and business processes segment include a wide range of stationary products, planners and organizers. There is no direct substitution for these products and services, however, indirect substitution exists. The company also designs and sells hardware including PCs, tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories.Īdditionally, Microsoft offers a wide range of software applications and cloud-based computing services such as Bing, Microsoft Azure, Microsoft Dynamics CRM Online, Microsoft Office 365, OneDrive, Skype, Xbox Live, and Yammer. Range of products offered by Microsoft include operating systems for computing devices, servers, phones, and other intelligent devices server applications for distributed computing environments productivity applications business solution applications desktop and server management tools software development tools video games and online advertising. The following factors determine the level of threat of substitute products or services for the multinational technology company:ġ. Threat of substitute products or services for Microsoft is low. Threat of substitute products or services in Microsoft Porter’s Five Forces Analysis Microsoft Porter’s Five Forces are illustrated in figure below: Porter’s Five Forces analytical framework developed by Michael Porter (1979) represents five individual forces that shape an overall extent of competition in the industry.
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