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An analysis of two Multinational Enterprises (MNEs) – Microsoft and Procter & Gamble
An analysis of two Multinational Enterprises (MNEs) – Microsoft and
Procter & Gamble (P&G)
Multinational Enterprises (MNEs) play a critical role in enhancing development across
different countries where they operate. Besides generating tax revenues for other nations, they
create many job opportunities and may impact the development of various social infrastructures
that benefit diverse communities. However, MNEs face stiff competition at national and global
levels from other companies that want to increase their market capitalization. Procter & Gamble
and Microsoft are MNEs headquartered in the U.S. and are among the largest organizations
based on their market capitalization. The continued leadership of these MNEs depends on their
abilities to produce standardized products that meet global requirements. An analysis of the
strategic marketing plans and the organizational structures of these MNEs may help understand
their preparedness in retaining large markets and penetrating new markets with standardized
Microsoft is an established MNE that specializes in the development of computer
technology hardware and software. As of March 2020, Microsoft had reached a market
capitalization of $1.1 trillion, making it rank among the top ten largest MNEs in the U.S. (Shor,
2020). It began operating in 1975 through the entrepreneurship of multibillionaire Bill Gates, one
of the world’s wealthiest businessmen. Microsoft’s headquarters are in Redmond, Washington.
By tapping into different international markets, the Company has employed over 140,000 fulltime workers. Other than the production and development of hardware and software products,
Microsoft licenses other companies to operate or produce some of its products. An example of
such companies owned by Microsoft is LinkedIn that offers networking services and develops
software and hardware products. Microsoft’s main products include OneDrive, Skype, Outlook
email system, and Microsoft Office Suite for various computer programs such as Excel, Word,
Access PowerPoint, and others.
Microsoft is not the only key player in the market providing technology software and
hardware products. According to the Forbes 2020 ranking, it was the third U.S. MNE technology
company producing superior products, which yielded about $143.02 billion (Highes, 2021).
Apple and Google took first and second positions in the rankings, implying that Microsoft must
put additional efforts to outcompete their rivals. In addition to the two competitors, Dell, HP, and
Acer, other key competitors threaten Microsoft’s market share in the global P.C. market.
Keeping phase with the vibrant competitors requires Microsoft to develop standardized products
that match or outshine their rivals.
Though not the best performing company, Microsoft has several mechanisms to thrive in
the competitive market. One of the critical pillars supporting Microsoft’s superior products that
meet global standards is its well-structured business strategy. Microsoft’s business strategy
address three key areas, intelligent Cloud, Productivity and Business Processes, and More
Personal Computing (Highes, 2021). Through the three subdivisions of the business strategy,
Microsoft prioritizes customer needs and improves satisfaction through platform security,
interoperability, extensibility, and backward compatibility.
Secondly, Microsoft has acquired over 200 technology-based companies that have
specialties in hardware and software products. The acquisition of Mojang in 2014 was a critical
decision that sought to increase Microsoft’s experience in gaming software by integrating the
Company’s expertise in producing Minecraft video games with the Microsoft gaming ConsoleXbox (Highes, 2021). Further, Microsoft acquired LinkedIn in 2016, a strategy that aims to
improve the Company’s competencies in enterprise software development. Microsoft has also
created extensive networks with partners, independent software vendors (ISVs), Value-added
resellers (VARs), and distributors who play critical roles in adding value to the Company’s
products. SAP, Twitter, and Salesforce are some influential partners that Microsoft is engaging
in furtherance of its strategic goals. Besides developing supportive cloud computing technology,
Microsoft plans to democratize A.I. to increase its accessibility to many people. Such a plan will
improve Microsoft’s public image that is likely to increase its brand loyalty. Following several
complaints on Microsoft 10 Windows failures, the Company has also made it a routine to
conduct internal testing of all its Windows through self-hosting and integration of data from
Windows Insiders (Bowden, 2018). These techniques have effectively enhanced Microsoft’s
Quality assurance standards.
Change in Microsoft’s organizational structure is a strategic decision that has
restructured many operations to increase its competitiveness. In 2015, Microsoft restructured its
organizational structure to form three engineering groups and nine divisions of business
functions (Dudovskiy, 2019). In the subsequent year, the Company scrapped about 7400
positions. Some of the reasons for restructuring included reducing chains of command and
saving on wages. Besides, a more straightforward organizational structure aims to increase focus
on specific business functions and promote innovation through specialized engineering groups.
The change was part of Microsoft’s corporate culture of dynamism, which requires doing things
in new ways while remaining competitive.
I believe Microsoft’s organizational structure and business strategies are practical and functional.
Coming third in the Forbes 2020 rankings is evidence that that the Company is competitive
enough. However, I think Microsoft should consider increasing its cloud technology
infrastructure to keep in phase with competitors such as Amazon and Apple. They have
extensive cloud networks that allow them to offer cheaper services (Highes, 2021). Developing
and retaining experienced employees is also necessary for Microsoft’s competitiveness.
Procter and Gamble
Procter and Gamble is an MNE that deals with a wide variety of consumer products. It
has about $225 billion market capitalization and ranks among the top ten largest U.S MNEs
(Shor, 2021). P&G began its operations in 1837 as a merger venture of two entrepreneurs,
William Procter and James Gamble. Its headquarters are in Cincinnati, Ohio, and it has over
92000 employees in different subsidiaries worldwide. P&G’s common brands include Gillette,
Ivory, Charmin, Crest, Pampers, Swiffer, Tide, Old Spice, and Mr. Clean. The Company’s Key
competitors include S.C. Johnson, Johnson & Johnson, Unilever, Colgate-Palmolive, Clorox
Henkel, and Revlon. Rating by the Comparably (2021), P&G ranks sixth among other
multinational enterprises. However, it ranks 2nd in product quality after Clorox. This data shows
that P&G has unique strengths that make it shine among competitive MNEs.
One of the critical strengths of P&G that ensure its superiority in brand value is its
integrated business strategy. P& G’s integrated strategy focuses on three main areas customer
needs, new business trends, and its retail and distributor partners (P&G, 2021). Additionally, the
Company has several compliance mechanisms that ensure all products meet internal and external
standards regulated by laws. While dealing with third parties such as suppliers and distributors,
P&G has clearly outlined policies that regulate its conduct. Formalized procedures and policies
ensure that P&G works jointly with its partners to achieve common goals such as improving and
protecting brand loyalty through value addition. P&G has created a company culture based on
Purpose, Values, and Principles (PVPs) that pillar the Company’s competitive advantage.
P&G has set several approaches that contribute to producing authentic products that are
competitive across global markets. P&G values the significance of trademarks and patents that
protect their products and technologies used in manufacturing, ensuring the production of
superior brands. Most of the strategic choices made in P&G are interdependent, ensuring that all
production methods utilize multiple inputs that contribute to advanced innovation. Besides, P&G
provides quality packaging of its products. The Company has automatic Custom-built
checkweigher machines from OCS CheckWeighers that ensure products have the correct weight
and proper package materials (Pierce, 2015). The machines automatically detect incorrectly
packaged or sealed cartons, reducing the need for manual inspection. Besides, the OCS machines
can automatically reject faulty and record various operational data on speed, rejects, or correct
weights. This technology ensures that P&G sells quality products.
In November 2018, P&G announced plans to change its organizational structure. The
new structure was necessary to increase P&G’s feasibility on six business units prioritizing
strategy, product, and package innovation. Besides, it seeks to improve supply chain logistics in
its largest markets such as China, North America, Japan, France, Uk, Germany, and Spain (Lash,
2018). The new structure with six industry-based sector business units (SBUs) would reduce
bureaucracy and enable the SBUs’ CEOs to report directly to the P&G chairman, president, and
CEO. Besides, the change would save resources that will increase efficiency and accountability.
The restructuring is one of the most significant changes in P&G for the last two decades and is
likely to increase the Company’s competitiveness.
I am not fully contented with the changes made by P&G in restructuring its
organization because other competitors have performed better in various rankings. Other than
increasing innovation and production efficiencies, P&G should put more effort into mitigating
financial and transactional exposures in multiple nations (P&G, 2021). The Company may
leverage technology to use analytic data to make accurate forecasts on market changes, customer
preferences, or external factors that interrupt its supply chain operations
In conclusion, Microsoft and P&G are vibrant MNEs with higher ranks among U.S.
companies with the largest market capitalization. Microsoft has invested in cloud technology and
acquired many I.T. companies that contribute to innovations that improve its products’ quality. It
has also formulated an effective business strategy and changed its organizational structure to
increase competitiveness. Similarly, P&G has invested in automated technology to inspect its
product’s quality and provide critical data for reviews. It also has an integrated business strategy,
formalized working guidelines, and renewed organizational structure that enhances efficiency in
operations. Generally, both companies must invest more in modern technology to remain
competitive among other MNEs.
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Hughes, J. (2021). Microsoft Competitors Analysis : Top 5 Competitors - Business
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