This document discusses Microsoft's use of intended and emergent strategies. It provides examples of Microsoft using an intended strategy when entering the gaming industry by developing a two-year plan for its Xbox console. This allowed Microsoft to carefully analyze the gaming market. The document also discusses Microsoft's emergent strategy of developing the Kinect in response to changing sociocultural trends of increasing health consciousness, allowing it to capitalize on a new market opportunity. While intended strategies provide clear planning, emergent strategies are better suited to adapting to changes in the external environment. The document argues that organizations should use a mix of intended and emergent strategies.

1. Steven Molloy
Strategic Management
21010815
Steven Molloy
"Evaluate the suitability of the emergent
and intended approaches to strategic
management for your chosen
organization"
Strategic Management
Individual Assignment

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Contents
1. Synopsis 2
2. Introduction 2
2.1 Intended Strategy 2
2.2Emergent strategy 2
2.3 Intended vs Emergent strategy 2
3. Intended and Emergent Strategies used by Microsoft 4
3.1 Microsoft Introduction to the Gaming Industry 4
3.2 The introduction of the Xbox Kinect 4
3.3 The Nokia Takeover 6
4. Conclusion 8
4.1 Microsoft Going Forward 8
5. Bibliography 9
6. References 10

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1. Synopsis
In this assignment I will be evaluating some of the emergent and intended strategies
used by Microsoft. I will establish the suitability of the chosen strategies and evaluate
how each strategy affected the organisation.
2. Introduction
Microsoft is a large international organisation founded in the USA in 1975. It operates
in a wide variety of industries including desktop operating systems, video gaming and
the smartphone industry. It has a net income of over $22 billion and currently
employs over 128,000 people worldwide (Microsoft 2014) making it a true household
brand name across the globe. Microsoft owns up to 90% of the market share in the
desktop operation system market contributing to it being key player within the
computing industry. (Mintel 2014)
2.1 Intended Strategy
Wendy Bodwell suggests that Intended or Deliberate strategy is the specification of
intended action the firm plans to make to achieve its goals. (W.Bodwell 2010) With
the intended approach: management of the organisation will carefully plan strategies,
with a clear vision of what they intend to achieve and how they intend to get there.
Intended strategies emphasize on central direction and hierarchy (Mintzberg 1985).
They will have clear leadership and a vision of how they are going to get to where
they want to be.
2.2 Emergent Strategy
Emergent strategy happens when companies engage in actions that evolve
unplanned from past patterns or newly recognized patterns in the business
environment. (W.Bodwell 2010) Emergent strategies open the way for collective
action and convergent behaviour. (Mintzberg 1985) These strategies are more driven
through innovation and desperation to conquer opportunities and threats presented
through external factors altering a market or industry.

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2.3 Intended vs Emergent Strategy
Intended strategies refer to the plans that managers develop, while emergent
strategies are the actions that actually take place over a certain period of time. (A.
Kozami 1991) Many theorists have argued for and against both intended and
emergent strategies. Michael Porter takes a more deliberate strategy approach and
uses models such as the “Generic Strategies” and “The Five forces” which together;
allow a business to distinguish its product differentiation or cost leadership strategy
whilst evaluating new entrants, product substitutes and buyer/ supplier power within
a market, allowing a business to effectively develop a deliberate plan of they will use
a strategy within the market. Henry Mintzberg suggests that emergent strategy
enables management to act before everything is fully understood - to respond to an
evolving reality rather than having to focus on a stable fantasy emphasizing the
necessity of emergent strategy. (K.Moore 2011) This suggests that the intended
strategy cannot be relied upon as it fails to adapt and change in coherence with the
changing/ evolving reality.
An intended strategy developed from Porter’s models will stay the same unless
completely redone, which with different outcomes will result in a completely new
strategy; rendering the previous intended strategy obsolete as it failed to change as
necessary to the changing environment. However, emergent strategies fail to provide
long term planning and focus that can lead to disjointed communication within the
organisation, leading to problems such as: a misplacement of resources or objective
clashes between internal departments. Both have negative effects on the businesses
success. Intended and emergent approaches have clear advantages and
disadvantages. A certain approach may be better suited to a certain strategy than the
other.
It could be argued that in fact a business must look to use both approaches in
coherence rather than one or the other to compete successfully within its market.
Henry Minzberg stated that: few, if any strategies are purely deliberate, just as few
are purely emergent. All real-world strategies need to mix these in some way.
(Mintzberg 1998) This reinforces the theory that both deliberate and emergent
strategies are required together for a successful business to operate effectively
suggesting that both are necessary and that an organisation will not use just one of
the approaches alone. An organisation my start with a deliberate design of strategy
and end up with another form of strategy that is actually realised. (A. Kozami 1991)

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3. Intended and Emergent Strategies used by Microsoft
3.1 Microsoft Introduction to the Gaming Industry
In the year 2000 Microsoft released a two-year plan to introduce a new games
console "The Xbox" entering them into the games console market. “For months
rumors have been rampant that Microsoft Corp. would enter the video game console
market with something called the X-- Box. Earlier this month Microsoft chairman Bill
Gates put those rumors to rest when he formally announced the X-Box at the annual
Game Developers Conference in San Jose, Calif” (S. Dillich 2000). The fact there
was a two-year plan in place suggests the long-term intent of this strategic decision.
Microsoft used an intended approach when entering the gaming market giving them
plenty of time to plan an entry into the market providing them with the ability to create
clear objectives, making it easier to communicate and implement plans used during
the strategy implementation, a clear advantage provided by the intended approach.
This intended strategy proved successful as evidenced through Microsoft’s financial
performance with a recorded 47% market share in 2012 within the gaming industry
providing more than $56 billion in revenue for the company (Y. Mehdi 2012)
suggesting it was a very suitable approach to use. The intended approach was
suitable for this strategy as it allowed Microsoft to analyse the gaming market in great
detail, which allowed them to design their product to make it as efficient as possible
when operating in the gaming market. This approach allowed them to conduct more
precise market research, create clear objectives and made it easy to communicate
designs and prototypes between different functions within the organizational
structure. Allowing them to prototype and then produce a more competitive product.
3.2 The introduction of the Xbox Kinect
Microsoft introduced the Xbox Kinect device as an enhancement product for the
Xbox to capitalise on a changing socio/ cultural environment in which more and more
people are becoming health conscious. Kinect was produced with fitness seeking
cultural factors as a key driver to its development; it provides a more active substitute
to conventional gaming thus providing a competitive advantage as a substitute to the
competitive rivals within the gaming market through Porter’s five forces.
Microsoft used Kinect as a strategy to adapt to a changing external environment to
maintain competitiveness with rivals in the gaming market. The strategic decision to
develop the Kinect product was an emergent strategy. Societies are becoming more
health conscious, changing behaviour, values and beliefs and also wants and needs
of customers. Emergent strategies are naturally more effective to adapt to a
changing external sociocultural environment including the way a population or
society behaves (C. Capon 2009) and this suggests that the emergent approach was
appropriate for Microsoft to employ in this specific situation.

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The strategy to implement this product to the market required a short lead-time from
the design stages to the competitive introduction of the product to avoid competitive
rivals recognising the gap in the market, developing a similar awareness of the
opportunity and producing a substitute product into the market; grasping the potential
market share before Microsoft. This strategy was experimental as the product was
new and the first of it’s kind as it differentiated from the competition suggesting it was
an emergent strategy as Microsoft could not have intended to enter a market that
simply did not exist before.
Igor Ansoff, widely regarded as the pioneer of strategic management, states that
product development strategy is risky as it is a new, untested market (H. I. Ansoff
1988) highlighting a weakness of the emergent approach. There was no guarantee
customers will want a product that has never been available to them before providing
risk to Microsoft however, an intended approach instigating long term planning would
not be suitable as this was a gap in the market that had only recently become
apparent due to changing external socio factors and also the technological factor of
motion detector technology becoming available for gaming use. The fact it was a new
market meant there was very limited information in which to establish plans and
analysis of the market. Kathleen Eisenhardt suggests that deliberate Strategic
planning gives managers almost no help in gaining insight about the future . It can
even be detrimental to managing the future when the plans are too rigid (Eisenhardt
1998). This suggests that an intended strategic approach would not have been
suitable for the introduction of Kinect. An intended approach could not have foreseen
the birth of a new market for this product resulting in an emergent strategy being a
far more suitable approach as it provided the innovation and flexibility required to
recognise the new market to then implement a new product into it.
The introduction of the Kinect was an extension of the intended strategy
implemented by Microsoft years before with the introduction of the Xbox. It was an
emergent strategy that was used to enhance the effectiveness of an overall intended
strategy, which suggests that Microsoft used both approaches coherently to
maximise the success of the business, emphasising the need for both. Without an
emergent dimension to the Xbox intended strategies the Xbox would fail to maintain
technological competitiveness with competing products.

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3.3 The Nokia Takeover
In April 2014 Microsoft completed the takeover of the mobile phone company Nokia.
Nokia had seen a massive decline in market share within the mobile phone industry
over the previous 10 years. “Many blame this decline, at least in the initial stages, on
Symbian, the firm's mobile operating system. It was, to paraphrase a welter of expert
opinion, simply not up to the job.” (D.Lee 2013) Microsoft had vastly dominated the
operating system market and discovered an opportunity to penetrate the mobile
phone industry through strong bargaining power of the buyer. Nokia intended to
massively improve their operating systems and Microsoft had by far the most
successful operating systems available. The Microsoft operating systems were
exactly what Nokia sought to introduce to their smartphones to survive within the
smartphone industry. The operating system market has very high barriers of entry
due to the technological factors and the vast resources required to develop a
competing operating system. This meant Microsoft had possession of what Nokia
needed and Nokia did not have the capacity to develop operating systems to the
standard required to compete.
Mobile is an area of tremendous potential but it has been one of weakness for
Microsoft (M.Menon 2013). Microsoft's biggest competitive rivals Apple were already
established in the smartphone market and any chance of stealing market share from
Apple would help establish dominance in other markets by restricting the overall
revenue for their largest competitor. Nokia had the human resources of managers,
employees and suppliers in the smartphone industry due to them operating in the
industry for many years and the physical resource of its well-recognised brand within
the market. Microsoft could provide financial resources and the physical resource of
their unique operating systems presenting the concept of the two companies working
together which lead to the strategic decision of Microsoft buying Nokia to incorporate
it into the organisation.
The takeover of Nokia was only mentioned in late 2013. Microsoft had not
deliberately planned to take over Nokia in the long term; they saw an opportunity
arise with Nokia struggling financially. The opportunity was born to take over Nokia
and implement their superior operating system onto the Nokia devices. This became
an applicable gateway to enter the mobile industry to compete for market share with
large competitors from other currently inhabited industries such as Apple. This was a
completely emergent strategic decision as it arose from an opportunity which
became from a series of events and was not planned.
This emergent strategic decision involves risk due to the large barriers of entry to the
mobile phone market. This emergent strategic decision presents opportunity for
growth for Microsoft to complete its intended long terms objectives. The organization
now has the advantage of containing both Nokia's knowledge of the market and a
competitive operating system, which both together, provide a vast resource pool and

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the potential to be very successful within the mobile phone industry suggesting a
very suitable emergent strategic decision.
Microsoft could have implemented a clear, well-planned intended strategy to enter
the phone market at an earlier date. For example in 2007 when Apple had recently
produced the first IPhone in 2007. Critics say the firm have been too slow to respond
to the booming market of mobile devices (R. Cellan-Jones 2013) They could have
planned and developed their own mobile phones rather than implement their
operating systems onto Nokia devices. This could have saved them the $7.2 billion
used to buy Nokia and also allowed them to compete for market share within the
market more competitively with Apple, as they at that time, would not have such a
strong market share and brand within the market. This suggests that if implemented
six years earlier, an intended approach would have been the most efficient and cost
effective approach to use and therefore the most suitable.

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4. Conclusion
I conclude through my findings that both intended and emergent strategic
approaches are important to the survival of a business. Both approaches are more
suitable in certain situations than the other however it is important for an organisation
such as Microsoft to engage in both approaches to maximise performance. Using
one and ignoring the other can be very costly, for example Microsoft’s failure to plan
an intended entry to the smartphone market in 2007. Microsoft could have used
elements of an emergent approach to recognise the future success of the
smartphone market and could have used an intended approach to enter the market
to maximum success in a similar way to the Xbox introduction in the gaming market
to increase their overall performance.
4.1 Microsoft Going Forward
Looking forward into the future Microsoft could look at introducing a smart television
into the television market they could research the performance of current established
businesses within the television market to see if any opportunities arise to implement
an emergent strategy of a takeover of an already competing company as they had
done previously with Nokia in the mobile industry to fully exploit any gap in the
market and enhance a current business strength (such as the superior operating
system) into an opportunity.
This move would allow them to establish themselves into a market large rivals Apple
currently are not, allowing them to develop brand superiority and increase
performance over all markets not just the television market individually. This could
also provide large potential through economic factors such as: the global recession is
forcing people to want products which provide many functions rather than many
products providing individual function. Microsoft have already looked at this concept
with the Xbox one "the entertainment you love is all in one place, welcome to the all-
in-one, XboxOne."(Microsoft 2014). This could be a huge potential opportunity for the
business.

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5. Bibliography
http://www.microsoft.com/en-gb/about/default.aspx
http://news.microsoft.com/facts-about-microsoft/
http://www.xbox.com/en-GB/xbox-one/meet-xbox-one
http://www.microsoft.com/investor/reports/ar13/shareholder-letter/index.html
http://www.computing.co.uk/ctg/news/2334519/microsoft-market-share-dips-below-
90-per-cent-according-to-web-counters

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6. References
David Lee, Technology Reporter, The Rise and Fall of a Mobile Giant, BBC news, 3rd
September 2013 http://www.bbc.co.uk/news/technology-23947212
H. Mintzberg, J.A Waters, Of strategies, deliberate and emergent, Strategic
Management, 1985, P.257-272
Claire Capon, Understanding the Business Environment, third edition, the
composition of the external environment, the sociocultural elements of the external
environment, P.48, 2009
Karl Moore, Porter or Mintzberg: Whose View of Strategy is the Most Televant
Today? Forbes Article, 28th March 2011 http://www.linkedin.com/groups/Porter-
Mintzberg-Whose-View-Strategy-57654.S.214697500
H. Mintzberg, Strategy safari: a guided tour through the wilds of strategic
management. Free press, New York, 1998
Paul Thurrott, Windows IT pro, Microsoft to Enter Gaming Industry with X-Box, online
article, March 14th 2000. http://windowsitpro.com/systems-management/microsoft-
enter-gaming-industry-x-box
Sandra Dillich, Computer dealer news, X-Box wants share of lucrative game console
market, V.16 issue 7, P.38 - 40, 31st March 2000.
http://search.proquest.com.lcproxy.shu.ac.uk/docview/202795109?pq-
origsite=summon
Yusuf Mehdi, Microsoft CMO, Official Microsoft Technet Blog, Xbox 360 hits 67
million sales worldwide, claims 47% market share, 30th May 2012
http://www.vg247.com/2012/05/30/xbox-360-hits-67-million-sales-worldwide-claims-
47-market-share/
H.I. Ansoff, Strategic Management, Corporate Strategy and Diversification, the
Ansoff Matrix 1988, P.229 - 231, Pearson
Kathleen M. Eisenhardt, Time Pacing: Competing in Markets that Won't Stand Still,
Havard Business Review, P.158, 1998
Manoj Menon, Managing Director of Frost & Sullivan, Microsoft to Buy Nokia's Mobile
phone Unit, BBC news, online article, 3rd September 2013
http://www.bbc.co.uk/news/business-23940171
Rory Cellen-Jones, technology correspondant, BBC news, online article, 3rd
September 2013 http://www.bbc.co.uk/news/business-23940171

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Wendy Bodwell, Technological Forecasting & Social Change, organizational
ambidexterity: Integrating deliberate and emergent strategy with scenario planning,
P193-202, 2010
Azhar Kozami, Business Policy and Strategic Management, an Overview of Strategic
Management, 2nd edition, P.28, 1991
Mintel Academic, *The Consumer – Operating System Used and Attitudes towards
Windows 8/8.1, Desktop and Laptop Computers UK 2014, 2014,
http://academic.mintel.com/display/711913/?highlight#hit1