Microsoft Company’s Environmental Factors and Marketing

Abstract

This paper analyzes the impact of various factors affecting domestic and global marketing. Global economic interdependence is discussed in the paper. Moreover, the influence of economic interdependence on both domestic and global marketing is analyzed. This paper also details the various factors affecting global marketing, including political, cultural, physical, and demographic factors. The importance of an organization’s social responsibility, ethics, and values is discussed in detail. Microsoft’s strategies in relation to these values are analyzed. The paper also considers the legal principles that guide global marketing and the effects of technology on Microsoft Inc.

Introduction

Global and domestic marketing decisions are affected by a number of factors. The factors are less in domestic markets in comparison to the international market where different jurisdictions are involved. Initially, a company may choose to rely solely on the domestic market. Thereafter, the company can choose to seek opportunities abroad to sell its products. Microsoft Inc., a software company, is guided by various domestic and global marketing strategies. Although it is based in the US, Microsoft Inc. has been able to grow as a global software giant. The success can be attributed to its marketing policies and its ability to adapt to various environmental factors, both locally and globally.

Influence of global economic interdependence and the effect of trade practices and agreements

Global economic interdependence has been beneficial to Microsoft Inc. in many ways. The international system that is created through politics encourages trade among countries. Thus, multinational organizations like Microsoft have been able to enter into new markets and increase their consumer base (Perreault et al., 2011). International trade is considered to be vital in the current age. The growth in international trade is attributed to the increased globalization. This has enhanced the speed and ease with which Microsoft adapts to new markets.

Trade practices and agreements usually have a political basis. Thereafter, the company can benefit or lose if the agreements among governments have not considered the company. The global market is also characterized by various factors that Microsoft has to consider in order to acquire new markets easily. The global economy also affects the domestic economy, thus the need for a company to establish itself globally. For instance, the domestic markets are usually affected by prices in international markets. Moreover, the economic well-being of foreign countries causes a significant impact on the activities of Microsoft domestically. In a case where the global economy is failing, then it means that few people are able to purchase its software products due to lack of finances (Armstrong & Kotler, 2011). Microsoft can develop effective marketing strategies to avoid losses in the unforeseen future if it is aware of global economic trends.

Importance of demographics and physical infrastructure

The demographics and physical infrastructure in domestic and global markets are important elements to be considered. These factors determine how the business responds to risks. Generally, the business flourishes if the factors are favorable. Moreover, the demographics and physical infrastructure also determine the risks that the multinational company might face. In Microsoft’s case, demographics are important in determining how many people can access their products (Armstrong & Kotler, 2011). Being a software company, its strategy depends on whether its products will attract its intended consumers or not. Physical infrastructure is also important in facilitating global marketing. Infrastructures like road networks are important for Microsoft’s distribution networks. Infrastructures such as buildings are important because distributors of Microsoft’s products are located in such premises.

Influence of cultural differences

Cultural differences play a huge role in determining the success of domestic or global marketing. Marketing culture is characterized by human behavior within a nation-state and the subdivisions that exist internally. Microsoft found it harder to establish globally due to the cultural differences that exist in different markets. The major setback that Microsoft faced was language. The languages spoken in many countries are different. Languages also vary within a country. Thus, ensuring that Microsoft’s products have been adapted to different languages is the best strategy to market itself globally (Kerin, Hartley, & Rudelius, 2011).

Initially, the biggest setbacks to international marketing for the company were boundaries that had physical forms, for instance oceans. Currently, language arising from cultural differences is the biggest setback to international marketing. Without communication, it is harder for Microsoft to enter new markets due to language barriers. Knowledge of the local language also acts as an advantage since it provides a better insight into the local market.

Cultural differences are the social forces within the micro marketing environment. Microsoft addresses these differences by conducting research to properly understand the target culture. Thus, knowledge of cultural differences is the best strategy to ensure that the company is able to attract a wider market. The marketing policies applied will be very effective in domestic markets because the company is already knowledgeable of the existing culture. Microsoft enjoys a huge market in its domestic market in the U.S. Marketing, in this case, is easier as the company is already aware of the domestic culture (Armstrong & Kotler, 2011).

Importance of social responsibility and ethics versus legal obligations

Social responsibility and ethics are important aspects to be considered by Microsoft in its marketing strategies. The same can be said about legal obligations. While social responsibility and ethics are considered highly by Microsoft, their legal obligations are also important. Microsoft’s social responsibility should ensure that its products are beneficial to the larger society within the different markets it operates in. Moreover, the company should follow the legal standards expected of it. Both requirements determine the quality of the products offered. Putting social responsibility and ethics into consideration will make the consumers gain, while the company will easily attract a wider consumer base.

Effect of political systems and the influence of international relations

Political systems existing within any foreign country will be different from the political practices encountered by an organization locally. Microsoft will have to consider all the different political systems and how to gain from them. Political systems determine whether a company will be able to establish itself within a foreign country or not. World markets are controlled by governments. Thus, even free markets have to undergo legislation by governments to determine the specific requirements of trade. Governments will set policies that they view as advantageous to their citizens.

These policies, when considered, will ensure that Microsoft’s products serve a large number of people. Moreover, trade and regulation are a source of tax income for governments (Perreault et al., 2011). Thus, political systems would want to gain financially from the business. This will influence global marketing as markets that are not oppressive will be considered with priority by Microsoft Inc. Moreover, such agreements will create a business atmosphere that will enable Microsoft to conduct its business effectively.

Influence of the Foreign Corrupt Practices Act of 1977

The Foreign Corrupt Practices Act of 1977 is a US law that was established by the government to prevent instances of corrupt dealings between multinational companies and state governments (Kerin, Hartley, & Rudelius, 2011). Various instances of corruption had occurred between US corporations and state officials of foreign governments during the 1970’s. This law sought to prevent these corrupt dealings and ensure fair trade. The Act has influenced local, national, and international legislation as each country has considered this Act to avoid illicit payments and corrupt activities within the government.

Global marketing has been impacted by this law as companies can now have a fair ground when conducting business with foreign governments. In Microsoft’s case, the company will not be forced to make any financial contributions to be considered within new markets. Instead, its success will solely rely on existing government policies and the availability of markets.

Effect of technology

Technology has played a big role in encouraging global marketing. Marketing has become easier, cheaper, and efficient for Microsoft because of technology. Technology has led to the growth of the Internet. Many people in the world use the Internet, thus Microsoft has seen this as an opportunity to increase the markets of its products abroad. The use of online advertising has been an effective marketing strategy used by Microsoft. The targeted audience for an online ad is far much greater than conventional means of advertising because many people can access the Internet. Moreover, it is easier for Microsoft to establish an online customer care service. This will lead to an increase in the number of people purchasing software from Microsoft Inc.

Conclusion

In conclusion, various environmental factors come into play to influence domestic and global marketing. An organization will easily make profits if the various factors are researched and weaknesses avoided. Microsoft has been able to consider these environmental factors and adapted accordingly in the bid to access new international markets.

References

Armstrong, G., & Kotler, P. (2011). Marketing: An introduction (10th ed.). Upper Saddle River, NJ: Prentice Hall.

Kerin, R. A., Hartley, S. W., & Rudelius, W. (2011). Marketing (10th ed.). New York, NY: McGraw-Hill Irwin.

Perreault, W. D. Jr., Perreault, J., McCarthy, E. J., & Cannon, P. J. (2011). Basic marketing: a marketing strategy planning approach (18th ed.). New York, NY: McGraw-Hill Irwin.