A SWOT analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a business venture or project. In this article, we will do a SWOT analysis of Microsoft. We will look at the company’s Strengths, Weaknesses, Opportunities, and Threats.
Summary key points
An Overview of Microsoft
Microsoft was established in 1975 by the ship’s captain, Bill Gates, and his business associate, Paul Allen. Software and hardware are all part of its portfolio, including operating systems, apps and gadgets, cloud computing and office suites. Ever since its establishment, the firm has gained market share since then.
Currently, Satya Nadella is the CEO of Microsoft Corporation. The firm has its headquarters in Washington, USA.
Undoubtedly, Microsoft is the best-known American multinational technology business in the world. With over 40 years of technical growth and major contributions to technology, the industry has earned itself a worldwide reputation. Take it or leave it, the world would be a very different place to live without Microsoft company.
A Microsoft SWOT analysis is a great way to get an overview of this company’s operations and see how it stacks up against the competition. So in this short article, we are going to give you the details of Microsoft’s strengths, weaknesses, opportunities, threats, and other internal factors that have contributed to the overall success of the company. Kindly stay tuned and read through the content carefully.
Complete SWOT Analysis of Microsoft
Strengths of Microsoft
The Best Software Company in The World
Software technology, particularly cloud computing, is Microsoft’s indisputable worldwide market leader. It’s the world’s biggest creator of the Windows operating system and a major contributor to the cloud. Azure, Office 365, and Dynamics 365 are some of the commercial cloud services it provides. Microsoft Teams’ daily users grew by up to 70%, from 44 million to 75 million in only 6 weeks. It therefore increased by 110% in just four months, in fiscal Q3 2020.
World’s Largest Market Share
Microsoft is the second biggest company in the world by market capitalization. It also has the greatest market share among the other five largest cloud service providers after gaining 3 percentage points (Google, AWS, IBM, Oracle, and Microsoft).
Broad Market Reach
Microsoft works in over 190 countries throughout the world. Since the release of the promotional version of Windows 10 on July 10, over 700 million copies have been installed globally.
Microsoft’s most recent financial reports reflect its robust development in the cloud industry. Investor’s Business Daily estimates that Microsoft might be valued at $2 trillion by the end of 2022.
New SKUs (Stock Keeping Units) Are Being Introduced
Microsoft has lately introduced new products to its portfolio of brands. This consists of Microsoft 365, which incorporates Office 365 and Windows 10. M365 is a multibillion-dollar investment by the company.
A Well-Known Brand with High Customer Loyalty
Based on our research, the firm has 1.2 billion Office users, including 60 million business Office 365 clients. It has the largest client base of devoted customers. Customers have faith in the company and remain committed to it.
Large Market Capacity
Microsoft, with a market valuation of 776 billion U.S. dollars, is one of the largest high-tech companies in the world. Microsoft is projected to be the second-largest corporation in 2020 based on market capitalization and the third-most valuable brand worldwide in 2019.
Advertising Platform that Works
Microsoft has impacted people all across the world with its powerful and efficient marketing methods. Its July advertising, with the tagline “The future begins today,” impacted many people globally.
Strong Foundation Brand
Interbrand identified Microsoft as the fourth most valuable brand, with the greatest brand quality and brand recognition in the digital industry. In the 2020 Forbes Global 2000 Ranking, Microsoft is positioned thirteenth overall and sixth among the world’s most highly regarded brands.
Microsoft is renowned for its high-tech and superior technologies. The Windows operating system and Office software packages are extremely user-friendly and of the highest quality.
When it comes to breaking into new markets with cutting-edge technologies, Microsoft has an abundance of R&D resources and is in a fantastic position to do so. It had a chance to be the first firm to use online ads, but it wasted the chance. While Google and Apple dominated the mobile OS industry, Microsoft’s entry into the fray was too late.
The Reliance on Hardware Producers
When it comes to computer hardware, Microsoft does not make its own and relies on the development of Windows OS-compatible devices by other computer hardware vendors. There would be no way for Microsoft to reverse the position if a cheap and popular rival operating system were available.
The Mature Pc Market
Microsoft’s OS and software sales for desktop and laptop computers are still significantly reliant on the company’s recent entry into the mobile technology market. As a result, Microsoft will have a difficult time increasing income in these areas.
Microsoft’s greatest flaw is that its famous team did not foresee the growth of the internet as a global phenomenon, nor did it interpret the market mechanisms of cloud computing. For this reason, Microsoft was late to react, and when it later did, it resulted in monopolistic allegations, which were the firm’s mainstay in prior years.
Security problems at the company have been criticized. Windows OS, Microsoft’s core software, has long been criticized for its vulnerability to a wide range of viruses. Windows, when compared to other operating systems, is the weakest among them.
With the recent selection of Indian-born Satya Nadella as the company’s new CEO, Microsoft appears to be doing well due to Nadella’s expertise in cloud computing. He’s obviously leading the company into the next phase of its evolution.
In spite of Microsoft’s inability to predict the rise of the internet and the mobile revolution, the business still sees a light of optimism in the cloud-computing model.
The company has a substantial amount of cash on hand, so if it cannot develop organically, it may still rise inorganically (through purchases of smaller businesses with promising commercial prospects).
This is how Bill Gates made an apology for underestimating the internet by acquiring Hotmail, which was established by another Indian, Sameer Bhatia. That actually gave Microsoft an advantage for several years before Google transformed personal email services.
Microsoft’s workforce diversity data for 2018 revealed an imbalance in the company’s hired staff. The company’s HR strategy got a lot of harsh criticism and blame because there weren’t many women and people of color working there.
Microsoft’s Xbox Live online gaming service has received numerous criticisms. The firm deems references to homosexuals and gays to be “unsuitable” and “offensive” for other users, hence they cannot be included in the gamertag or user’s profile.
Microsoft competes fiercely with Google and Apple. The proven positions of these firms may pose a challenge to Microsoft’s market dominance. In June 2020, Google increased its battle for remote work by introducing video-calling capabilities, editing facilities, and other remote tools to Gmail in an effort to attract Microsoft clients.
Changing Customer Preferences
The markets for cell phones, notepads, and laptops are extremely attractive to consumers. Microsoft’s market share in these categories is minimal.
Open Source Initiatives
Similar to Linux OS and Open Source Office, a number of other open-source software products have actively entered the market by providing comparable services for free. It can be a problem for Microsoft, which sells similar things for more money.
Cybercriminal Activity and Piracy
Microsoft’s security network and infrastructure have been affected by the rise of cybercrime and software piracy in a big way.