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Microsoft Corporation SWOT Analysis (2016)

Microsoft SWOT Analysis (2016)

CEO: Satya Nadella

Ranked No: 25 on Fortune 500 list (2016)
Microsoft (NASDAQ:MSFT) performed strongly under the leadership of Bill gates  for years. However, the rise of rivals like Apple and Google shrunk its market share. Still, in some areas Microsoft continues to rule the market. Its recent acquisition of Nokia nearly failed. The performance of Bing and Internet explorer is also not as good as their competitors. Microsoft Office however, is still the most widely used office software as is the Windows OS. Microsoft still has some superhit products in its portfolio. A detailed SWOT analysis of the Microsoft company is presented below:

 – Strengths:

– Solid  financial position

–        Leader in Desktop OS

–        A diverse portfolio

–        Efficient cloud services

–        Bing search engine with the second biggest market share after Google

The most important strength of the Microsoft brand is its leadership position in the Operating System market.
 Its Windows operating system is the most widely used OS globally. Microsoft’s financial position is solid and it has a diverse product portfolio. From operating systems to Microsoft Office software, its diverse product portfolio is a distinguished feature of the brand.  Microsoft gained an important position in the cloud services market which is an additional strength for it. Moreover, the Binge search Engine, owned by Microsoft is the second most popular search Engine after Google. Overall, it has some significant strengths that make the brand highly competitive.

 – Weaknesses:

–        Comparably lacking in innovation
–        Technical issues with Windows applications
–        Dependent on hardware manufacturers for its software business
–        Weak position of browser in the market
Compared to Google or Apple, the pace of innovation at Microsoft has remained relatively slow. Users occasionally face issues with the software and operating system. Problems with updates also led to a decline in popularity. Along with all these factors the brand depends on the makers of hardware for its software sales. Microsoft’s Browser, Internet explorer has a very weak position in the market compared to Google Chrome and Firefox. Even the Nokia deal could not bring the expected benefits for Microsoft. Overall, the brand has a few significant weaknesses that need to be addressed.

 – Opportunities:

–        Developing innovative products
–        Mobile technology
–        Mobile advertising
The opportunities of the Microsoft brand lie in the development of new innovative products as well as in mobile technology. Microsoft acquired Nokia, but the deal did not prove a major success. Still, the brand has major opportunities open before it in the smart phone market. Apart from that Microsoft can also enter mobile advertising for business growth.

 – Threats:

–        Intense competition from the likes of Google & Apple

–        Economic threats

–        Antimonopoly lawsuits

The most important threat for Microsoft comes from Google and Apple in the form of increasing competition. In  various product segments, these two competitors sell similar products which are vastly ahead of Microsoft’s. Apple is a major competitor in the OS market.  Google’s search engine has a huge market share as compared to Microsoft’s Bing. Apart from it, the changing economic conditions and the anti-monopoly lawsuits also pose a major threat to the brand’s reputation.

Recommendations:

Currently, Microsoft must focus on competition and new areas of growth. Its major strengths are the Windows platform and Microsoft Office software. However, the smartphone market and mobile technology could generate additional opportunities. These are the new avenues that are full of excellent opportunities. Microsoft being a technology giant could very well exploit these opportunities. The main threat comes from Google. Only new innovative products and services can help the brand see faster growth. Microsoft used to be mightier in the past. A lot of its business has been affected by the rise of Google and Apple who are its primary competitors.

What is a SWOT?

‘SWOT’ is an acronym  for Strengths, weaknesses, opportunities and threats. It is a powerful strategic management tool that helps to know one’s important strengths and weaknesses. It helps at planning to exploit the available opportunities and  countering the threats . Strengths and weaknesses are internal factors whereas opportunities and threats external.

Basically, SWOT is a tool to help you reduce your weaknesses and counter the threats. It can improve the business’ chances of success. Any business needs to exploit available opportunities and increase its strengths. Companies conduct a SWOT before they embark on a new strategy or before making an important business move like investing in a new project.

Written by Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.

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