The essence of any successful entrepreneurial strategy is in creating significant value for the customer (Drucker, 1985). Microsoft needs to shift towards a more open API-based product strategy that allows for more rapid innovation from hardware and services partners both. This direction alone will help Microsoft to compete more effectively over the long-term, by giving them the ability to compete for precious developer resources and times with partners and service providers. Second, Microsoft needs to think more about their phone strategy from the standpoint of how they can create the smartphone of the future as a computing platform. One of the best strategies for accomplishing this is to concentrate on having their operating systems be more oriented towards creating a technology-agnostic platform for social media websites and applications. The advent of social media websites have given every customer a much greater level of communication and clarity, so much so that an individual consumer can now have as much of an impact on the performance of a business as the largest corporate customer (Bernoff, Li, 2008). Microsoft needs to respect this specific aspect of the behavior of customers they are building their next-generation operating systems for. Third, Microsoft needs to re-orient their entire product strategy to make their hardware providers' smartphones much easier to sell and service. Today they follow the model of traditional PCs.

Finally and most importantly, Microsoft needs to use the Five Forces Model as shown in Figure 1 to better compete in an increasingly turbulent industry. This includes aligning each of the five forces to the specific customer needs their mobile platform products meet instead of staying so myopically focused on technology alone.

Figure 1: Smartphone Five Forces Analysis

Sources: (Apple Investor Relations, 2013) (Bernoff, Li, 2008) (Lee, Kwak, Kim, Kim, 2009) Based on the Five Forces Model by Dr. Michael Porter (Porter, 2008)

Conclusion

Microsoft's reliance on technological prowess alone has helped the company in the past to dominate desktop and server operating systems markets. It has however not served...

The intent of this analysis is to show that the Five Forces Model can guide Microsoft beyond its product-centric, very myopic view of smartphones and the ecosystems they require to embrace a more integrative market-driven strategy. Google will win the battle for smartphone operating systems if Microsoft doesn't' change its approach quickly, as the company continues to rely on a very myopic strategy as exemplified by Dr. Levitt in his published research and articles.