Business strategy is a direction, vision and objectives in terms of projects, in order to configure the total recourses that invest into the projects base on the markets needs and challenging of other competitors. After all, a scorecard will be use to evaluate the overall performance and the next step can be draw out base on the evaluation. The evaluation is about the suitability, feasibility and finally acceptability. Different company may have same or different policies on a same situation depends which way they comfort with. In this paper, Microsoft and Apple business strategy will be compare and contrast.
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Innovation is a radical or revolutionary change on doing an ordinary thing and makes it think out of the box. The process include from invention to application. Innovation can be value added if the invention is successful since the revenue and the stock market price of certain company will be increase significantly due to the uniqueness of the products. But the innovation also bare the risk of lost, this in because in the R&D process, a lot capital been invested and may not produce the return so fast or even not at all if the innovation is failed. This paper include how innovative Apple and Microsoft is and how the technology invented by them help to push the world into the next level.
1.2 Purposes/ Objectives
The first objective of this paper is to study about the business strategy between the Microsoft and Apple. The second is to study about the innovation of both company and their contributions to the technology world. As an engineer, one must be able to catch up the technology trends, make their own judgment about the incident and be innovative enough to foresee the future of the technology world. By studying history of companies, one can learn how others success and the lessons from others fails.
The sample population of our research was 100 students from Multimedia University Cyberjaya. These 100 students were come from different faculty which included students from Faculty of Engineering, Faculty of Information Technology, Faculty of Management, Faculty of Creative Multimedia and last but not least FOSEE.
1.4 Methods & Sources
Two methods are used to complete this research. The primary data are collected through the questionnaire and the online researches. A thorough comparison and categorization will be performed in the second phase research. The second phase research result will be used to provide sufficient empirical evidence and to ground truth our findings from the preliminary research. The questionnaire is as per attached in the appendices.
2.0 Literature Review
Apple Inc. is a multinational corporation which based in Cupertino, California. Apple was founded by Steve Jobs, Steve Wozniak in 1st of April 1976. By Apple to shifted itself from the computer industry to the information technology industry the coverage of business become wider, it includes computers and mobile hardware (desktop and laptop personal computers, servers, iPhone, iPod), software (Mac OS X, iLife, iWork suits) and further to the online services (Mobile me services). For more than 34 years, Apple experienced from the rise to the golden age then fall back to serious lose and climb back to the current world’s leading technology company status. For the Apple community the most important, most powerful person ever is the current CEO which is the co founder Steve Jobs. He founded the company in 1976 and get fired by the CEO that hired by him in 1985, then he back on 1997 after the acquisition of NeXT Computer which is the new company that founded by Steve been layoff by Apple. In 1997 after Steve become the interim CEO of Apple, Michael Dell founder of Dell Computers said that “What would I do? I would shut the company down and then give back the money to the shareholders,” in front of the crowd of several thousand IT executives. After more than ten years which is now, Apple worth more than 4 times of the Dell’s market value. It is not difficult to spot whether Steve Jobs in Apple campus, just look for the handicapped space in front of the Apple campus entrance. Because it is usually for him to park at there and sometime occupied both handicapped car lot. If describe the Apple as big ship, the Steve will be an erratic and temperamental captain. But this captain is capable to foresee and fulfill what the end users wishes and setting the trend in innovation and style. Moreover, Steve Jobs been award as most valuable CEO by Barron’s, The Wall Street Journal and CEO of the Decade by Fortune magazine.
Microsoft Corporation is a multinational computer technology corporation that develops wide range of software products, gamming hardware products, online services etc. But Microsoft main business and most profitable products are selling the software products such as operating system, office suits. In 1975, Microsoft was founded by two founders which is Bill Gates and Paul Allen, and for now headquarter is locate at Washington. Microsoft was developed and sold the Beginner’s All-purpose Symbolic Instruction Code (BASIC) interpreters for the Altair 8800 computer when it was founded. Then continue with The AppleSoft Complier (TASC) which compiles the BASIC written program to Apple machine language. By award the contract by IBM to Microsoft for the operating system in IBM upcoming PC, it yields the first real success for Microsoft is by delivering the Disc Operating System (DOS). Then Microsoft continues to release the new operating system which named as Windows operating system that equipped with the graphical user interface (GUI). From Windows 1.0 to the latest Windows 7 or Windows server 2008, Microsoft rose of small player to the giant in the software industry. Microsoft provides wide range of software to support the hardware products. Before January 2000 the chief operating officer for Microsoft is Bill Gates, but after Bill Gates stepped down and become the non executive chairman, he gradually transfer his duties to Steve Ballmer, an executive that joined Microsoft on 1980. Beside the operating system Microsoft also create the business software, gaming hardware such as XBOX, gamming software such as Flight Simulator 2000 and other popular games for both PC and XBOX. Microsoft also participates in the search engine, BING and provides other online services such as Windows Live. To compete with iPod, Microsoft released their own portable media player named as Zune which offer more choices to consumers.
3.0 Methods, Materials & Process
Our entire research is based on the students from MMU Cyberjaya. The objective of survey is to collect opinion of students in MMU Cyberjaya toward business strategy and innovation of Microsoft and Apple. As such, our main criteria lie on the Faculty of Engineering (FOE), Faculty of Information Technology (FIT), Faculty of Management (FOM), Centre For Foundation Studies and Extension Education (FOSEE) and Faculty of Creative Multimedia (FCM). All of the students from the research sample are chosen randomly regardless of their age and sex. We targeted a research sample of 100 students.
We started our research by using the questionnaire. The questionnaire fundamentally consists of close ended and open ended questions. Each of the questions is specially designed in correspondence with the objective of the research, which is to determine the image of both the company in students mind. The questionnaire is attached on Appendix A.
There are 5 members in our group. The different tasks on the questionnaire design and distributions have been divided evenly among the group members. Our research samples are the 100 students from every faculty. Our friends from every faculty assist us in distributing the questionnaire. Besides that, we also perform the online survey and send the link through social network such as msn, email or facebook. Every question may require more than one answer, which are the answers that come to their mind.
4.0 Survey Results:
Which company does you heard before?
In the statistic, it shows that all heard about both companies before.
Which product from Microsoft that you have used before?
As show in bar chart above, Windows and Office suite dominates the market, as the Internet Explorer and Windows Media Player bundle with the Windows operating system, so both of it also have 100% of usage. Windows Mobile is just for the one who own the smart phone that use Windows Mobile as operating system which as low as 40%. The less among all is Microsoft hardware, which includes keyboard, mouse, webcam etc.
Which product you think represents Microsoft the most?
Pie chart above shows that when people talk about Microsoft, the image or product that relate to the company is Windows.
Which product from Apple that you have used before?
Most of the people have used iPod and iPhone before compare to the other Apple products. This is because of the pricy of the Mac computers even the entry level product compare to other others.
Which product you think represents Apple the most?
Pie chart above shows that when people talk about Apple, the image or product that relate to the company is mostly iPhone and iPod.
Which company do you think is more innovative?
Peoples think that Apple is more innovative compare to Microsoft maybe due to the image that Apple keep refresh its products line and keep introduce new products.
Which company image is more mysterious or secretive?
From statistic, Apple image is more secretive compare to Microsoft. This is probably due to Apple won’t announce current or ongoing projects compare to Microsoft makes public about what its current ongoing.
Which sector do you think Microsoft monopoly?
Microsoft monopoly the software market in the PC industry due to its operating system can operate in any hardware combinations.
Which sector do you think Apple monopoly?
Apple monopoly in digital music sector and mobile sector, many iPod and iPhone can be found easily on the street as the handheld device of many users.
Usually where you get the information or news for the products?
Compare both of the pie chart above, most of the people get the information of Microsoft from email promotions and social media, but for Apple, Email promotions and social media tactics less likely to be use with.
5.1 Compare and Contrast of Business Strategies
As show in graph above the different between Apple and Microsoft business strategy is its secrecy level. Nowadays the social networking platforms such as blog, facebook, twitter, etc are very famous around the world. There are companies that use these platforms to communicate with their fans, potential customers, costumers, sharing about the new business strategy, new technology, new upcoming products or get the direct respond from the public. Such as Microsoft, there are different official blog for different department, such as IEBlog or Server Team Blog. But there is also the official Microsoft Blog for the executives or employees to deliver the news and the perspective from Microsoft. Besides that, the Microsoft team uses their blog to respond to the current related topics or what happenings in the industrial, such as Microsoft Cooperate Vice President reply the criticism of the former employee by the title “Measuring Our Work by Its Broad Impact” through the blog. 
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But this kind of the culture is banned in Apple. In Apple, no employees are allowed to share to public any tidbits about what are they currently doing. There are also no official blog for Apple. The only Apple have is their official website to provides the details to the public. Moreover, Apple has been known to spread wrong information to their workers. According to a former employee mention that Philip Schiller, senior vice president for worldwide product marketing, provided incorrect information about a product’s price or features about new products in internal meetings. By using the incorrect details, Apple then tries to track down the source of leak. For those employee that leak or accidently leak the information, they will be fired. 
Even Apple employees have no idea what are they currently working at. They just finish the task that assigned. The engineers that deal with the hardware part and the software part are separate in different buildings in order to prevent for them to know what is the whole project was. So for Apple employees they are as surprised as public about the new product launch or products update. Basically Apple secrecy reaches paranoia. A former Apple marketing manager describe as below “Employees working on top-secret projects must pass through a maze of security doors, swiping their badges again and again and finally entering a numeric code to reach their offices, according to one former employee who worked in such areas. Work spaces are typically monitored by security cameras, this employee said. Some Apple workers in the most critical product-testing rooms must cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful”.  Beside the unannounced new products, this rule also applies for the announced. Such as for new iPad that just launch and will be available in Apple Store on 3rd of April, but even few days before launch, Apple Store employees form concierge to manager haven’t seen it yet. The most interesting part is the geniuses that in charge of the problems solving and fixing don’t know how to solve and fix the potential problems yet.
Why secrecy is so important in Apple business strategy? It is because this approach has been critical to success, it will allowing Apple to attack the market share of other companies before for their competitors conscious about it. Usually if Steve found that if there are some breakage or potential products in the sectors, they will find the possibilities to connect it or create it out. Such as iPhone, it takes more than three years for Apple to figuring out how to product it should be, so that was three years ahead of their rivals. So when their rivals try to create some product to fight back, maybe Apple has brought their existing product into another level. This make Apple in lead of the sectors and their rivals keep catching up at behind.
Since Apple image is about the secrecy, before any events that held by Apple, there are sure many rumors going on the tech website or media. But there sure will have leaks about the new product information. A former Apple manager describe that “these sorts of leaks are handed down from senior Apple executives to the employees to contact major news or website outlets. The communication is always done in person or on the phone and never by e-mail. This is because if there’s ever any dispute about what transpired, there’s no physical evidence to prove the false of either party’s version of the story.” So it is all about the business or marketing tactics. By control leaks, Apple will know who the public will respond to their new products and it is a free method to survey and free method to advertise the potential new products.
All of the rumors or lawsuits that are related to Apple company well shown in their stock (AAPL) that listed on Nasdaq. The stock price will go higher before there are any events and if the new product release meets the public expectation the stock price will be rise again or remain same. But if out of expectation, the price will be drop. So as the lawsuits, by winning the lawsuit will help to push up the stock.
5.1.2 Open door versus closed door
The second strategy related to secrecy is about the open door versus closed door. Since the day Microsoft collaborate with IBM when IBM approach Microsoft for needing the operating system for their new to-be-announced PC. The personal computer (PC) that creates by the IBM is open architecture, which means that peripheral components and compatible software can be produce and sell by other manufacturers without purchasing licenses. Soon there comes other manufactures to reverse engineered the PC which so call the IBM PC compatible. As the success of the IBM PC lead the PC become the standard in the industry and lead many of the other companies to start to clone it. Due to the popularity of the IBM PC, it helps to push to Microsoft to world because all of the clone will use the Microsoft DOS operating system.
After more than 30 years of evolution, nowadays there are full of computer company such as Dell, Asus, Acer, etc which is PC maker and seller. It is not too over to say that each of the PC that they sold come with the pre-install Windows operating system that developed by Microsoft. The statistics showed that more than 90% of the operating system market shares are own by Microsoft. How Microsoft reach so far? The answer is collaboration with the hardware manufactures and with software programmer. Microsoft released the Application Programming Interface (API) inside the operating system for the use of the programmer. Since the PC is very popular and due to the popularity and high demand, so there are a lots of programs which is wrote to be work in Windows operating system. Back to computer manufacture, each PC that preinstall with the Windows operating system must be genuine. The charge for the operating system at the end will be pay by the end users. From there Microsoft get a lot of income from the licenses. Because of the needed of collaboration with different parties, Microsoft need to release their road map or preview of the new software in advance order to let or encourage or make sure the manufactures to build their offerings around Microsoft new systems. Sure, this will only let Microsoft a stranglehold on the software market.
For Apple, it is totally different. Apple hardware is a close architecture, so only Apple proprietary software can match with proprietary hardware. It is totally black box operations. Mac OS X is just for Apple Mac computers, iPhone OS just for Apple iPhone or iPod. Apple have different keyboard layout, different connector for video output. By using iPod or iPhone, the only software that you can sync with is by using iTunes. Unlike Windows mobile operating system or Windows operating system that is designed to work on any participating computer or handset. So there is totally no openness and interoperability in Apple compare to Microsoft. Due to that close looped and high prices, less people which the Mac OS X market share less than 5% and the software that operable on the Mac OS X is quite limited and the driver for peripherals hardware that work with Mac OS X also limited. But on the other hand, because of the ecosystem, Apple can design the combination of hardware and software that work well together, this can ensure that whole system is running smoothly and to enhance the user experience which others can’t deliver. The advantage for Apple is they only write the software for their own hardware so there are fewer problems, for Microsoft, as they need to support all of the variant hardware then it run on, so there will be more problems to deal with.
5.1.3 How to reach customers
The third point is how the both company reach their customers. Usually there are three ways to reach the customers, first is through the official online store, secondly is directly through the concept store and the last and the most important method is through advertisement. The Microsoft online store aka Microsoft Marketplace offers all the latest products from Microsoft and computer or hardware by third party manufactures. It provides all the specifications, minimum requirements, pricing, comparison between products and other details that will be need by the buyers. User can select the products and add into cart then directly pay by credit card to get the products. Unfortunately, Microsoft Marketplace just available to selected countries only which exclude Malaysia. Beside for the software for computer, Microsoft also provides the software for smart phone. For the Windows mobile platform there is a special store or platform for users to view and download the applications, games that create by third party developer which name as Windows marketplace for mobile.
The virtual store is not enough to interact with users. So why the concept store is so important? It is because there are demands for users to physically experience the stuff, to introduce to the new technology and get the direct help from the professionals. So it leads to opening of the official concept store. For Microsoft, they have total two Microsoft store at United States, both open in 2009. Microsoft store is target to improve the customers retail purchase experience for Microsoft products, provide opinions and help consumers to make decisions with their PC and software purchases. The store provide wide variety of products, it offers both hardware and software that create by Microsoft such as Microsoft windows, Microsoft office, Xbox 360, Zune potable media player etc. It also offers the personal computers that manufactured by third parties manufactures such as HP, IBM, Dell etc. Most of the PC peripherals and accessories can be found in the store too. For both hardware part and software part, customers can have a test drive at there about all the new technologies or functions that provide by Microsoft for new software and entertain their self with Xbox 360 or the Zune. There is also a corner named as Answer bar which duty by the Microsoft professional with the meaning of helps to answer and troubleshoot the problems about Microsoft products. Beside the normal customer service, they also provide the after sales service at there. For the faulty Microsoft hardware can be send to there for the repair. Class sessions also provided to introduce to the new users to highlight all the basic and new functions.
For Apple, same as Microsoft, they have both the online store and the concept store so call Apple Store. But both the Apple online store and concept store are quite different with the Microsoft. For Microsoft the main idea is for promote and introduce their product to the public and not sales. This is because personal computer can buy from the manufacture and maybe the manufacture provides more promotions or offers. For the software part, most of them are bundle with the new computers. But this is totally different for Apple. For Apple, all the software and hardware are custom by themselves. So they are the only one who provides the service or warranty. All the faulty hardware which can’t solve by the authorized distributor is send back to Apple. For Microsoft, they just provide online store for few countries, but for Apple, they provide the online store for most of the country in the world which all the price are display in the local currency. For Apple online store, they provide both the hardware and software from themselves and third party too. The special about the Apple online store is they provide the education discount for both the students and lectures. The education prices are lower than market price, so that it can encourage the students or lectures to switch to the Apple ecosystem more affordable. As mention above, Apple website is the only way to get the new information about the Apple. So as the online store, it is the only way to get information about the updates or refresh of the current Apple product lines. When the online store is down, there are only two possibilities, one is for maintenance and another is for product update. Beside the online store, there are other stores such as Apps Store which provide the applications for the ipod touch, iphone and ipad by third parties. Itunes store to sell the music, video, ringtone, drama to both the mac and windows users.
For Apple concept store, there are totally 286 stores in worldwide. Inside the store provide all the product range from Apple. In order to run the store effectively and achieve high customers stratifications, all the staff are been well trained for specific tasks. The level of training depends on the post that currently holds. First is store manager that in charge of whole team members, evaluate their performance and manage the profitability. Second is concierge/ specialist, there are quite a numbers of specialist such as Inventory Control, Back of House and Personal Shopping Specialist. For Personal Shopping Specialist they performs assorted customer service tasks, such as conduct product sales and answers enquires about Apple products and their main task is to deliver unique shopping experience to customers . Third is Creative which been well trained to provides training or advice, teach about all Apple’s software and pro applications to customers. As Apple very focus about the customer service and from the statistic of Customer Service Champs 2010 that done from the BusinessWeek magazine, Apple get 3rd rank which is highest among all the computer manufacture. Last but not least, there is also Apple Genius that serves at the Genius Bar to diagnoses and identifies the possible problems, perform repairing, replacement services for the products that under recall or needed and provide technical support to Apple users. To attract the visitors to Apple store, Apple had made many affords. One of it is the architecture and interior design. In a results, numerous architectural awards been award to its store designs, so that’s make it Apple Store so unique to each others such as the Apple Store at the 5th Avenue of New York. It is the underground store which its entrance is a big glass cube. The most unique and eyes catching interior design is the glass staircase that leads to the underground store. Beside that the glass staircase was awarded design pattern in 2002.
For the advertising part, both companies almost perform same to each other. First is by sending email. This is because it is a most cost effective way. Usually the email will introduce either the new products or the promotion of the current products. By sending the email or newsletter to the subscriber, it can create the awareness of the customers towards the advertisement, help to create loyal customers and serve as a reminder. Through the email newsletters that send, the direct sales can be increase and will lead to increase the income.
Nowadays, the usages of the search engines are part of the daily life. Just key the website or information that wishes to look for at the search engine, and you will get the page that require. So advertising through the search engine is the way to do so. Search engine company provide paid search advertising at the top of the all the results when the keywords are matched. This allow interested visitor to browse the details, increase the business revenue and reduce spending limit.
For Apple, for the major products such as iPod, iPhone and iPad, or when there are major improvements over old products, they will publish the advertisement video to introduce the features or the uniqueness of the products. Besides that, the most famous Apple advertisement is the “Get a Mac”, which use to compare between the PC and Mac computer. To compete with the advertisement, Microsoft creates “I’m PC” advertisements which focus on the price of PC which is cheaper over Mac computers.
Another strategy which use by Microsoft and later follow by Apple is use the strength of social media. By using social media, the end users or customers will help to spread out the information which is product advertising. The reviews by the professionals or pioneers are post at the Facebook or Youtube to introduce their products. Communicate with the users are important for Microsoft strategy, so they create blogs, discussion groups on forum or social networking website such as Facebook or even Twitter to provide the frequent information updates about new products and use the platform as the brand ambassador to increase to adoption rate of new products. From listening the feedback rather than self defend can help Microsoft to improve and create better products. As discussed above, the suggestions or opinions from users act as a feedback look and make a whole close loop ecosystem. For Apple, there are two official Facebook page, one for iTunes and another for Apps Store. The content include introduce the new apps or song and direct link to the store for further purchasing, which is another way to promote the items. Overall, the social media can be effective tool for marketing, it also allow user to voice their opinions and suggestions and participate in the product development cycle, which result better products for better future. 
5.2 Compare and Contrast of Innovations
5.2.1 Apple Innovations
According to the survey percent of people thinks that Apple is more innovative. It is a norm where when discuss about innovation, most computer and electronics consumers will focus and chasing for Apple, and that why Forbes Magazine ranked Apple in 1st place for most admired company for innovation. The formula for Apple is keep increase the spending for R&D, keep innovate, keep launch the new products or updates and lastly keep the competitors far behind. Apple do innovate quite a number of technologies, but it is surprise that in many cases Apple do help to push the technologies in the mainstream but Apple did not invent the core technologies. Steve jobs said that “You can’t ask people what they want next, they won’t know, they can’t tell you what they want next, they just know when they see it and feel that it gonna be right things. First of all is graphical user interface (GUI). The GUI was introduced by Apple in 1984 named as Mac OS pairing with its Apple Lisa computer and changes the computer industry since ever. Before the introduction of GUI to public, all the personal computers were power by dot matrix command line operating system, to execute any command, user need to type in the command and the interaction and it is not user friendly at all. In the truth is the GUI generally credited to Xerox because the idea is get from Xerox when Steve Jobs and other Apple executives visit the Xerox research center in 1979. On the other hand, Apple do help to innovate for GUI, Apple include the drag and drop, double click, menu bar at top of the screen with pull down menu. All the steps follow by Microsoft with release Windows 1.0 in late 1985.  With the introduced of GUI in Mac OS, Apple introduced the mouse to be the pointer for its GUI. Apple did not invent the mouse, the mouse was invent by Douglas Engelbart and ship with Xerox workstations in 1981. As a result of population, nowadays all the desktop computer must pair with a keyboard and mouse. 
The successor for Apple Lisa is Apple Macintosh. It is the first commercially successful all in one personal computer feature with GUI and mouse. All in one computer not the original idea from Apple as older 8 bit computers such as Commodore PET and Kaypro implemented this concept first.  After Steve Jobs back in 1997, he announced iMac in 1998 which is all in one computer which brightly colored transparent casing for monitor, keyboard and mouse. This is the 1st computer for Apple to return its profitability after return if Steve. Since then iMac been categorized as mid range price computer and the newest of iMac feature 21.5 and 27 inch LCD screen. As the uniqueness and the all in one pc reduce the space consumption, nowadays other manufacture such as NEC, LENOVO, DELL release their own all in one pc with Windows OS to grab the market share of all in one pc.
Another story for introduction of iMac in 1998 is abandoning old technology such as remove the floppy disk drive. The remove of floppy was
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