Your assignment is to prepare and submit a paper on external and internal environments of microsoft corporation. Environmental internal and external factors affect the function ability of any company. Internal factors are the controllable factor prevailing within the firm. Whereas external factor accounts for those factors which are beyond the control of any firm. One of the external factors affected the pricing strategy of a single product of Microsoft. The factor was one of the macro-environmental factors of the external environment affecting the entire information technology industry. One of the factors was the political and legal forces. This did not directly affect the marketing ability of the company but indirectly clouted the marketing decisions of the company. For Microsoft, political and legal external environmental forces lead to a profound influence on the decision making and strategy department of the company. Changes in the political and legal field hugely affected the marketing decision of the company. These forces are the macroeconomics forces which affect the overall industries. XBOX 360 is one of the products of Microsoft which comes under the Interactive Entertainment Business division of Microsoft. The issue which came to the picture depicted that the use of lead-free solder was the source for lack of strength in the XBOX 360. So prohibitions were brought by the government for the usage of lead and mercury cadmium. Following this issue, the European Union announced the banning of lead and mercury Cadmium on every product used by many companies in the IT industry. It assures that the external environmental issues affected not only Microsoft but also the entire IT industry (Cornwell, n.d., pp. 1-4). Social and cultural forces of the external environment also affect the marketing concepts of the company. It assures that the firm should take a go-ahead in eliminating the detrimental product. As an effect of the same Microsoft stated working to pertain technology to noteworthy environmental issues and collaborated with the European Environmental Agency (Microsoft, Corporate Citizenship, 2013). Porter’s Five Forces: Michael Porte’s five forces of competition give a brief of a simple model helpful in assessing and scrutinizing the competitive strength and situation of a certain firm in respect to its competitors. Porter’s five forces lead to a competition of the rivals of the industry. Two of the forces are existing competitive “entry of competitors” and the second is “threats of substitute products”. Threats of substitute products are the potential threats from the competitors within the industry regarding the products. Microsoft faced threats from the competitors in the field of the personal computer software market. Its close competitors were MAC OS, Sun Solaris, Linux, various structured browser, lotus notes, etc. This lead to a high degree of competition amongst the IT companies within the industries regarding their close substitutes. But in this aspect, the government had a different view. As per the government, Microsoft did not face any such threats from the competitors regarding he close substitutes. Rather it enjoyed a monopoly in the middle-level market due to its pricing strategy.