Mini Case Study on Google vs Microsoft Business Models by Kate Bernadette Madayag University of the Philippines Strategic Management

1. Competing on Business
Models:
Kate Bernadette T. Madayag
BA 190 - Strategic Management
University of the Philippines
Prof. Mita Angela M. Dimalanta

2. Vision Statement:
To help individuals and
businesses realize their
full potential.
M
I
C
R
O
S
O
F
T

3. Mission Statement:
To organize the world’s
information and make
it universally
accessible and useful.
Vision Statement:
To provide access to the
world’s information in
one click.
GOOGLE

4. How is a strategy different from a business model?
How is it similar?
• Business model defines basic structure and
methods of the business to maximize
revenues and profits while strategy addresses
how a business engages competition to
achieve its goals and objectives.
• Main purpose of business models and
strategy is to offer value to customers and
gain competitive advantage for the success of
company operations.

5. Strategy and Business Model
According to Forbes, Microsoft is the new Google and
Google is the old Microsoft.
Both try to enter competitor territory because they
are looking for dominant positions in the Internet.
They offer the same product and service portfolio.
Why are Microsoft
and Google
becoming
increasingly direct
competitors?

6. Annual Growth Rates

7. Annual Growth Rates
Growth Rates (Microsoft) 2009-2010 2010-2011 2011-2012 2009-2012
Windows and Windows Live
Division 32.48 2.35 -3.47 24.88
Server and Tools (Windows) 6.96 10.40 12.02 32.28
Online Services Division -25.71 13.64 9.97 -7.16
Microsoft Business Division 1.916 16.92 6.56 26.98
Entertainment and Device
Division -21.59 46.65 7.61 23.73
Unallocated and Other 75.86 -23.92 9.793 46.90
Total Consolidated Revenues 6.41 11.94 5.40 25.55
Growth Rates (Google) 2009-2010 2010-2011 2011-2012 2009-2012
Google websites 23.67 34.46 19.41 98.57
Google Network Member's
Websites 22.69 18.13 20.02 73.95
Total Advertising Revenues 23.36 29.38 19.59 90.86
Other Revenues 42.39 26.64 71.32 208.92
Total Google Revenues 23.97 29.28 21.46 94.6

8. What trend emerges?
What conclusions can you draw?
• All business segments of Google are
experiencing drastic growth which reflects
Google’s good management in all of its
business segments.
• Microsoft is experiencing slow growth rate in
the last three years.
• Microsoft is suffering negative growth
especially on its Online Services Division, Bing,
over time.

9. Recommendations
• Microsoft could
• Drop its money-losing online business, Bing.
• Find other ways to maximize their other
business segments to compete for the free-
service offering of Google.
• Focus on innovation.

10. Recommendations
• Google could
• Improve their vision and mission statements to
incorporate all its business segments like
operating systems, projects and other tangible
products.
• Keep an eye on its core business while adding
and improving other product and service
offerings.

11. References
Bort, J. (2015). Google shares its plan to nab 80% of Microsoft’s Office
business. Retrieved from: http://www.businessinsider.com/google-plan-
to-beat-microsoft-office-2015-2
Brown, M. (2015). Microsoft Windows Is 30: A Short History Of One of the
Most Iconic Tech Products Ever. Retrieved from:
http://www.ibtimes.com/microsoft-windows-30-short-history-one-most-
iconic-tech-products-ever-2194091
Ross, S. (2015). Apple Vs. Microsoft Vs. Google: How Their Business
Models Compare (AAPL, MSFT) Retrieved from:
http://www.investopedia.com/articles/markets/111015/apple-vs-
microsoft-vs-google-how-their-business-models-compare.asp
Rothaermel, F. (2015). Strategic Management. McGraw-Hill Education.