Microsoft Swot Analysis

Introduction and Summary of Company History and Background Information

Microsoft over the past 27 years has positioned itself as the arterial system of almost all computers rolled into use across the world. Albeit with no competition worth the name to challenge its existence leave alone on technology advancements, the company has still managed to keep pace with both felt and perceived needs of its customers and its niche remains robust thus far. Nevertheless disturbing winds have begun to blow. Its corporate governance is under the microscope and the world is watching as to how Microsoft is bracing itself for the challenges posed both by competition (however innocuous it may be at present) and technology proliferation.

Let us look at Microsoft's expansion plans and initiatives to integrate them to its existing competencies

- Microsoft's role according to Mr. Gates himself is to provide a software platform

that allows everyone who is building applications to build far more powerful

applications.

- MOM (Microsoft Operations Manager) 2005, which is a key management software and Virtual Server product as part of simplification of the IT lifecycle

have been launched recently

- In hardware domain the company has had the benefit of exponential improvement

in recent decades. During the first half of next year, the company is expected to

have a very smooth transition from 32-bit to 64-bit systems, with total binary

compatibility. This will provide the ability to mix 32-bit and 64-bit; a simple

recompilation for any application using the full 64-bit address base. That is a

wonderful milestone no longer requiring people to buy expensive systems simply

to achieve the best possible performance.

- New graphics chips for better visualization; larger screens, moving up to 17-inch, 19-inch or multi PAL type LCD displays; and RFID for tagging information and having them available to track is on the agenda too.

- Software developments in photography, web searches and music, and advances in gaming applications are on the anvil

- Web-service protocols for connecting applications Ð'- Exchange and XML data are already in the pipeline.

All this of course does not guarantee sound sleep to Mr. Bill Gates for too long. Guarantee of success happens in no business, not even in a long-term monopoly. Competition, technology compatibility and integration needs, pricing, delivery and service parameters can precipitate substantial threat to Microsoft and afford opportunities for other players. It is not that Microsoft is not aware of this. It is focusing on R&D and business strategies to sustain market shares in its own way. But is it enough and is it taking the right direction is the big question.

Others have started to seriously innovate and compete. For example changing technologies like Wireless Communications and Networking (WAN) etc do not complement Microsoft's existing competencies. Over the next five years, in all developed countries, the majority of people will be connecting through broadband and interacting with information through many devices: PCs at work and at home, portable PCs, Tablet PCs, and pocket devices such as the phone, evolving from simply a voice device to a data device. Having all these devices work very well together and be secure and up to date are very significant challenges indeed.

Therefore there is adequate scope and opportunity to review, audit and understand through SWOT analysis the company and its competencies and facilitate a new debate on possible corporate business models and revised action plans.

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. It has to be a continuous rather than a need based exercise.

Strengths

A) Key Strengths

Ð'* Strong fundamentals-Microsoft has become synonymous to computers over the last two decades. It has a massive market share and has recorded impressive sustainability and growth even in the face of disasters like 9/11.Impressive research base takes care of business cycle changes and product life cycle limitations

Ð'* Strategic tie-ups and Business Process Outsourcing both to utilize technocrats all over the world and to optimize costs

Ð'* Multinational Corporation operating through regional subsidiaries giving it a truly global perspective of cultural, ethnic and linguistic differences in more than 60 countries. This certainly affords a better business perception and applications too

Ð'* Relatively rapid product development processes that allow for timely updating and release of new products

Ð'* Software products have high brand recall and recognition, generic corporate and consumer acceptance (Word, Excel, PowerPoint, Access), and numerous powerful features that are in use worldwide, thereby promoting standardization and competitive advantage through their ease of integration and cost-effectiveness

B) Other Strengths

Ð'* Applications and operations divisions complement each other well

Ð'* Recently created online service network divisions (MSN)

Ð'* Flexible workforce through contingent workers for special projects

Ð'* Very good Human Resource policies, in addition to good compensation, an opportunity for employees to do well financially through stock purchases

Ð'* Neptune, is a Window's interface and is an example of smart software

Ð'* Revenues and profits rising at 30% a year with merger/acquisition or investment in 92 companies over the past few years

Ð'* Top rating from Fortune for best company to work at and most admired company

Ð'* Windows series, and Windows NT are globally known as the PC desktop operating system with a market share of above 80%

Ð'* Participation in socially relevant