Research Project - Strategic Recommendations Paper

Project - Strategic Recommendations - Research Paper Example However, it is important to note that mergers and acquisition would badly affect the competitiveness of a business and produce other unintended outcomes if they are planned thoughtlessly. Modern business organizations take strategic initiatives from time to time to influence the industry forces in such a way to enhance their sales and profitability. This paper intends to give the Microsoft Corporation some strategic recommendations for their future performance in the light of the company analysis and industry analysis already performed in the previous papers. While going through the financial statements of the Microsoft Corporation over the recent years, it is clear that the company had achieved a considerable financial growth throughout 2012 and 2013 fiscal periods and the first half the of 2014 before it began to experience growth declines in second half of the 2014. Although the company is currently experiencing financial setbacks, it still performs better when compared to industry benchmarks. It is interesting to see that in the fiscal year ending 2014, Microsoft was the top leading player in the business software and services industry with a market capitalization of $347.51 billion when the total market capitalization of the industry was $5.728 trillion. Although the company’s cash ratio, current ratio, and quick ratio dropped notably in the recent years, the drop was still better than the industry benchmarks. When the firm’s gross profit margin has been decreasing since 2012, the operating profit margin and net profit margin improved during the period 2012-13 but later slightly dropped in 2014. According to the annual reports, Microsoft’s operating profit margin and net profit margin were 31% and 25.42% respectively in 2014. It is observed that these values were higher than the industry benchmarks at that time, justifying