SWOT Analysis Microsoft Corporation

Submission Date: 21/03/2019 AIMAN JAMIL
O4151713057
BBA- 4A
SWOT ANALYSIS OF
MICROSOFT Corporation
STRENGTHS:
• Brand loyalty: Over the years, Microsoft has been the leading OS and software
provider, which resulted in more than 90% market share for PC OS. Most of us grew up
using its easy to use OS, are familiar with it and will keep using it. Few other brands are
capable to compete with Microsoft for this reason. Even open source OS, which are
completely free and well suited to use for common user, find it hard to attract users.
• Brand reputation: According to Interbrand, Microsoft’s brand is the 5th most valuable
brand in the world, valued at $ 57.8 billion. Forbes listed the corporate as the 7th most
reputable business in the world. Brand reputation leads to higher sales and greater market
share.
• Easy to use software: Windows OS and Office software products are so popular not
just because Microsoft has great monopolistic power, strong distribution channels and
good brand reputation but also because its products are of great quality and really easy to
use.
• Strong distribution channels: The company works with all the major computer
hardware producers such as Lenovo, Dell, Toshiba and Samsung and major computer
retailers to make sure computers would be sold with already pre-installed Windows
software. The company also invested in Dell and Nokia to tighten its relationships with
these companies.
• Robust financial performance: Microsoft grew its revenues by 20% from 2008 to
2012 and holds more than $63 billion of cash and cash equivalents that can be used for
acquisitions and substantial investments into R&D.
WEAKNESS:
• Poor acquisitions and investment: Few of Microsoft’s acquisitions were successful
and brought not just revenues and products but new skills and competencies to the
company. Massive, Link Exchange, WebTV, Danger are just few examples of multimillion
acquisitions made by Microsoft but soon shut down or divested.
• Dependence on hardware manufacturers: Microsoft is a giant software corporation
but it does not produce its own hardware and depends on computer hardware
manufacturers to develop products that run Windows OS. If cheap and popular alternative
OS would appear, hardware manufacturers may simple choose the alternative and
Microsoft could do little to change the situation.
• Criticism over security flaws: Windows OS, the main Microsoft product has been
heavily criticized for being so weak against various viruses’ attacks. Compared to other
OS, Windows is the least protected against such attacks.
• Slow to innovate: Microsoft has huge R&D resources and great position to enter new
markets with innovative products but constantly failed to do so. It had an opportunity to be
the first player in online advertising but missed the opportunity. It’s entrance to mobile OS
was also too late, while Google and Apple captured the market share.
OPPORTUNITIES
• Cloud based services: Microsoft could expand its range of cloud services and software
as the demand for cloud-based services is expanding.
• Mobile advertising: Mobile advertising markets are expected to grow in double digits
over the next few years and Microsoft has a great opportunity to tap into these markets
with its mobile OS.
• Mobile device industry: Smartphones and tablets markets will grow steadily over the
next few years and Microsoft could exploit this opportunity by introducing more of its own
tablets and a new company phone.
• Growth through acquisitions: With a huge reserve of cash Microsoft could start
acquiring new start-ups that would bring new technology, skills and competences to the
business.
THREATS
• Intense competition in software products: Microsoft is more than ever on the
pressure to introduce successful OS both in PC and mobile markets as such competitors
like Google and Apple have already established positions.
• Changing consumer needs and habits: Customers shift from buying laptops and
standalone PCs to buying smartphones and tablets, the markets, where Microsoft has only
a modest market share and may never establish itself.
• Open source projects: Many new open source projects are coming to the market and
some of them became quite successful, such as new Linux OS and Open Source Office.
Open source projects are free and so they can become an alternative to expensive
Microsoft’s products.
• Potential lawsuits: Microsoft has already been sued for many times and lost quite a
few large scale lawsuits. Lawsuits are expensive as they require time and money. And as
Microsoft continues to operate more or less the same way, there is high probability for
more expensive lawsuits to come.

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Submission Date: 21/03/2019 AIMAN JAMIL

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