Abstract The reason for this essay is to examine Microsofts diversification strategies based on thorough competitive research. With the use of tactical tools and the use of those tools in the competitive context, it was found out that Microsoft has strategically guarded itself from its competition in various market segments. However, there are still areas which Microsoft could spend into if they intend to regain their super-competitiveness that was lost some time back. INTRODUCTION In 1975, a visionary drop-out from Harvard University set out with a brilliant plan to visit a Computer on every desktop. Today, his company, Microsoft, is a domineering head in multiple business. They have amassed an extraordinary profile of global procedures, alliances, resources, customers and critics.