1. INTRODUCTIONMicrosoft founded in 1975 by Bill Gates. It is the largest information technology (IT) company. For the year 2005, its revenue was $39,788 million and net profit after taxes was $12,254. However, since the early 2000s, a series of bad news has seriously affected Microsoft's future growth. The Personal Computer (PC) and basic office operating system is the near-monopoly software of the category. The purchase of QDOS (quick and dirty operating system) from the Seattle programmer and his name in Microsoft Disk Operating System (MS-DOS) is the beginning of his strategic decision. Later, Microsoft introduced Windows, a graphical version of MS-DOS that borrowed features from its rival Apple's Macintosh system. Dramatically, Microsoft has managed to leave this pioneer company behind. Microsoft then developed Window NT to compete with UNIX. With the saturation of the desktop software market, the dot.com crash and the entertainment trend, in November 2005, Microsoft announced its new strategy.2. ANALYSIS OF THE ENVIRONMENT2.1 External EnvironmentThe general environment that has greatly influenced Microsoft is political. The U.S. Department of Justice filed antitrust charges in 1998, alleging that Microsoft had stifled Internet browser competition and limited consumer choice. In March 2004, the European Union (EU) fined Microsoft and ordered it to remove its media player software from the European version of Windows. Microsoft has already reached a settlement for the first case, but in the worst case these lawsuits could cause Microsoft to split. Economically, IT industries remain in positive growth. Even though the data shows that the IT sector in 2006 was quite gloomy, analysts had predicted that the sector would take... half of paper... similarity. Market commonality and resource similarity are the building blocks of a competitive analysis. The following table cross-references Microsoft's three divisions and the markets within which each of its competitors participates to present a picture of multimarket competition.4. CONCLUSIONWith the positive external environment offering many opportunities rather than threads for Microsoft, the internal strength arising from its core competencies, Microsoft is expected to sustain the competitive advantage. The new strategic diversification strategy is very precise in responding to the current challenge. Furthermore, the international strategy has been successfully adapted from the beginning. Microsoft also continues to seek an acquisition strategy to acquire other organizations to strengthen its core competencies in terms of acquiring new talent and technologies.