Free Microsoft Corporation SWOT Analysis Essay Sample
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A SWOT analysis is a strategic management method of analyzing a company's strengths, weakness, opportunities and threats. It is often carried out when there is a major projects or business undertaking the company wishes to take (Cleland and Ireland, 2007). A SWOT analysis entails identifying the purpose venture and specifying the external, internal, good or bad aspects that will or may affect the intended activity (Knox, 2010). The strengths and weaknesses are often internal factors while threats and opportunities are often the external factors, all of which affect the output of a company. A number of companies often focus on the internal factors within the company that affect their success while ignoring the external. An in depth analysis of opportunities and threats therefore challenges the company to look beyond their company confines to discover what opportunities are waiting to be exploited and which threats are looming behind the business venture. According to Knox (2010), to come up with the company's unique analysis, management should look at each issue subjectively and also be precise. More often than not customers and clients understand that the company faces competitors and other kind of threats therefore it is fundamental to act with a certain degree of realism (Boone and Kurtz, 1992). On the other hand, it is useful to use key strategies that will attract the customers and clients (Danca, 2006). A SWOT analysis basically shows the company how to make the most of their strengths, eradicate their weaknesses, exploit the best opportunities and respond to the threats (Kyle, 2008).
Microsoft Corporation in particular undertook a SWOT analysis to understand their strengths, weaknesses, threats and opportunities and in turn know what works for them and what does not. Firsts and foremost we begin with the findings of the analysis of the strengths.
Strengths are the trade's first capital that it can use to be effective. Considering the strengths of the organization relative to your rivals and from your customers' standpoint is key in realizing maximum profits (Menon, 1999). First and foremost, Microsoft Corporation is known as the largest software company with a nick for highly innovative software and hardware products (Hildebrand, 2002). The recognition extends globally with over 500 offices in 160 different countries, specially designed to cater for the local computer needs of the natives of these countries. Secondly, Windows 2007, Vista and XP are the house hold PC desktop operating systems not only in America but worldwide, with a global market share of about 88%. Thirdly the software products from Microsoft Corporation e.g. MS Word, Excel, Access, PowerPoint and numerous other features are in use worldwide thereby promoting standardization and competitive advantage through their ease of integration and cost-effectiveness. Fourthly, Microsoft's revenues and profits made are rising at a rate of 30% per annum with continuous merger, acquisition and investment in 92 companies for the past five years. Additionally, Microsoft has a developed a culture of rapid product development to ensure timely updates and release of new exciting and innovative software and hardware products.
Microsoft also has a strong, flexible and highly qualified workforce that are able to tackle complex projects to come up with a favorable product. In addition, the workforce is diverse with at least 30% being female and 20% originating for a minority group. The entire workforce, in addition, has an opportunity to invest in their company stock purchases provided to them by the Microsoft group. In addition, Microsoft has the ability to remain in touch with its customers to receive regular feedback, comments and suggestions. The products developed by Microsoft are also less expensive as compared to other software products and are at the same time highly effective which makes them the better option for many customers and clients (Hildebrand, 2002). The software products are also easy to maintain and replace seeing as Microsoft has created various avenues and channels for customers to update their systems. Further to this, Microsoft has a global reach of business as is surpasses all cultures while catering to various technological needs. Microsoft also produces authentic and patent goods that are certified by the US government.
All trades have weaknesses too. It is key to identify what they are, and attack them persistently as if they were the devil personified. Business is a battle, and it is a battle that requires Victory. In the past, Microsoft has failed to properly articulate the growth of Microsoft products which has led to major competitors overtaking Microsoft in term of productions. Also, Bill Gates the Brain child of Microsoft has adequately mastered software production but has not yet in actuality developed new products (Forbes. Com). The Microsoft software products are often sold with gross assumption that the client has already installed a Microsoft, PC operating system or any other compatible device. Fourthly, obstacles of product launches and deadlines contribute significantly to employee exhaustion. Also, employee incomes have increased from 6% for a ten year period to 7.4%. in addition, there have been declining sales in the operating systems and server software sectors.
Frequent restructuring, rules and regulations, and oppressive atmosphere diminish employee creativity leading to a loss of fundamental workforce and slowing down of communication and innovation. IRS audits also revealed employment status of temp workers for whom Microsoft did not tax nor allow to take part in Microsoft's Savings Plan or Employee Stock Purchase Plan, leading to a finding of tax liability for Microsoft in recent litigations. Also, there has been little or no noteworthy presence in the wireless market. In addition, Microsoft is hasn't been a key player in the Internet space up until the release of MSN which still faces stiff competition from the likes of Yahoo and there also have been few products for Internet applications.
On the other hand, the corporation has also been perceived by many as a cut-throat participant that uses its dominant market niche to marginalize other competitors by destroying the competition's products, suppressing product innovation, and lessening the accessibility of competitor products. Additionally, Microsoft products have a single application center and do not work well with or beside other products. Lastly, Microsoft's reputation has suffered because of embarrassing situation in antitrust brought about by various litigations. There have also been limited human resources and staff to keep up with the production needs of the consumer.
If any trade is to survive in the longer term, it must fashion and acknowledge any opportunities. Any trade that follows along using the same strategies month in month out, year in year out, without being mindful of the future, is a trade that is at the end of the day disaster-prone. So, what opportunities are at present out there for this company? One opportunity that has presented itself is cheaper international telecommunication costs and new open markets as more and more connect to the Internet. Mobile phone applications and utilization of personal digital assistants signify a growth in industry so that tactical associations could provide Microsoft with opportunity in a market where it in the past had small or no considerable presence. In addition, the popularity among people for Internet access has increased therefore Microsoft has an opportunity to step up its game. Additionally, the demand for more personal computers and software products in America and global markets remains strong despite the development and increasing attractiveness of personal handheld devices. Also, many bureaucratic regulations have often ruled in favor of the Microsoft Corporation therefore, the company has a leeway to keep creating and producing various computer devices and software without any hiccups.
lastly the most awful one of all, and the one that is so easy to disregard, and even not notice at all, until it creeps up on you, and strikes you in the revenue line is threats. Firstly, Apple and Linux threaten Microsoft's 88% market share of the desktop devices therefore if Microsoft wants to stay on top of the game, it has to come up with new and innovative products to ensure that they are one step ahead of their competitors. In addition, between 1993 and 1995, Sun Microsystems, Netscape, Oracle, IBM, AOL, and other companies moved into the Internet space and defined it while Microsoft failed and still has failed to anticipate its growth or popularity into the web (Hilderbrand, 2002). Foreign exchange rates affect demand for applications, software and hardware such that these unpredictable currencies can negatively affect revenues in the global marketplace. Also the department of Justice antitrust litigation and current appeal generates uncertainty among staff since its outcome is not known. Also, hardware manufacturers like IBM have joined forces with Microsoft on new platform technologies that replicate much of the value of Windows therefore no new products are actually coming up. Other key players like Oracle, IBM, AOL, and Apple are issuing their own pre-bundled programs on their own hardware unlike Microsoft.
In addition, their rivals like Compaq, Netscape, Oracle, Sap, Sun Microsystems, Apple Inc and Dell are also experiencing growth in their sale and client base therefore this poses a threat to Microsoft (Wilcox, 2007). Also, things mobile-phones, personal digit assistants, entertainment-oriented hand-held computers, and similar wireless products for Internet access do not need Window operating system products therefore their OS is becoming more and more necessary. Rapid development of mobile devices that will displace/replace personal computers also poses a threat. The recession/economic downturn in the U.S. and global market impacts personal computer equipment sales and their need for operating systems therefore sales have been down. Software piracy and copyrighting of commercial and consumer software products on a global scale threaten the steady revenue outcome .Lastly, technology life cycle is shorter and shorter and shorter therefore Microsoft needs to come up with new innovative products that will be needed in the society. Also, Wilcox (2007) notes that UNIX products dominate high end critical operations in companies and other major corporations and its customers do not believe Windows can handle these operations.
Benefits of a SWOT Analysis
The SWOT analysis for Microsoft Corporation gives above is an example of how management carries out the SWOT analysis to strategize a way forward for companies. A SWOT analysis is appropriate for these and other organizations because in this period of increasing globalization and a borderless hyper aggressive business atmosphere, every trade has to put together its guiding principles and lines of attack supported by well investigated data, facts and figures coupled with a comprehensive analysis of its surroundings, both internal & external to the business, that affect it (Valentin, 2001). For this sort of study of a business, it needs a strategy tool i.e. SWOT Analysis which, as mentioned can be utilized to identify the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a venture. This tool involves spelling out the goals of the venture or project and identifying the in-house and peripheral factors that are helpful or unfavorable to attain that goal (Cleland and Ireland, 2007).
Many of giant investments and corporations strongly propose the SWOT analysis as one of the most essential tools for capital investment analysis, decision on investing in industries, sectors and locations since it gives the company a basic system that is time and again used in strategic management planning, developing company achievement, executive development and identifying competitive vantage points (Drucker, 2007). We have heard time and time again business mogul Warren Buffett talking about empowering and popularizing an idea of a company's moat. The moat is nothing but identifying a company's competitive advantage. A steady competitive advantage, or a wide moat, gives a company sustainability, which investors, we're highly interested in and attracted by. According to Valentin (2001), a SWOT analysis Sample can give us the real state of a company.
Also, a SWOT analysis helps a company in their decision making process of investing in a particular venture and shows their views on capital investment analysis as it entails large sum of money. If a company gets a chance to use the tool, they will see the following benefits to their trade: lower costs, integration, synthesis, simplicity and flexibility, helps in discovering chief abilities of the organization, serves as the basis of information for strategic planning, helps in spelling out the opportunities an organization has, helps in making out the weaknesses and threats to formulate plans to get rid of them (Armstrong, 1982). In addition, a company can maximize their opportunities by taking action quickly and in the right course; a business can trim down or conquer the threats both domestic and peripheral (Boone and Kurtz, 1992). This tool also gives a foundation to set up organizational goals and gives the vivid outline of the business's past, present and future.
It is therefore a force to analyze the company's' position and develop appropriate approaches and devices for acquiring growth: a basis for evaluating chief potentials and competences: the confirmation for, and literal key to, change: an incentive for involvement in a organizational experience.Apart from the many benefits of a SWOT analysis, it is most likely the fact that it is easy, straightforward and is cost effective from time is the best perk. Large corporations and other businesses all over the planet use this tactical planning method in order to assess the various factors that affect a company and its ability to stand through the test of time and rivalry (Armstrong, 1982). We know that every business has tits own goals and it has been confirmed helpful to know what the favorable and unfavorable circumstances are that will either send them directly or away from their goal.
Strengths, Weaknesses and Accuracy of A SWOT Analysis
SWOT analysis a very simple administration tool because it does not rely on comprehensive numerical measurements or mathematical formulas. Managers ought to make a list of their company's strengths, weaknesses, opportunities and threats relating to their activities and assess them to establish how sturdy the company is compared to rival. This analysis can be restructured or altered as the economic marketplace changes; giving administrators the mandate to create a study that can mirror present business circumstances. The elasticity of SWOT analysis can fast become a weakness, since financial changes may occur regularly in the commerce world. According to Drucker (2007), this forces administrator to continuously bring up to date their SWOT analyses for each new state of affairs. if not the analysis will become immaterial to the current requirements of the company.
An additional strength of carrying out a SWOT analysis is the capacity for administrators to include as much findings as they need or want in their analysis (Armstrong, 1996). While arithmetic figures or calculations may be included in the SWOT analysis, such data is not necessary. Taking account of thorough information allows administrators to refer back to previous SWOT analyses and establish how precise their analysis was of past situation. Assembling more facts than is required for the SWOT analysis may bind the success of this management instrument. Too much facts may lead to a "paralysis of analysis," causing administrators to spend more time on assembling and evaluating information rather than making the SWOT analysis.
The record weakness in the SWOT analysis tool is the prejudiced nature of the facts being listed as strengths, weaknesses, opportunities or threats. Strength could at times pass as a weakness, an opportunity a threat, and vice versa. According to Luck, Lucas, Ferrell and Hartline (1998), administrators must with awareness review their SWOT analyses and settle on whether strengths can also pass as weaknesses, which would alter their decision from the SWOT analysis. To steer clear of these skewed features of SWOT, managers or executives involved in the SWOT analysis should support the analysis drawn from the SWOT. All in all, a SWOT analysis is intended to do more good than bad for a company (Armstrong, 1996). An analysis of Strengths, weaknesses, opportunities and threats that are associated with an organization are key in the success and achievement of an organization (Kyle, 2008). Using the findings of this analysis, may assist the company in determining their niche in the marketplace.
Albert Humphrey form the Stamford University who fashioned the SWOT tool is the pioneer of an effective management tool that is used by various companies today to specially analyze the best way forward (Friesner, 2000). The SWOT analysis has been used as a trade model since the 1960s and has revealed its significance when applied to companies, organization structure and marketing (Menon, 1999). A SWOT analysis is subjective but still succinct. Over analysis and oversimplifications have limited value in fashioning a strategic standpoint. The features in the SWOT analysis should mirror the genuine internal condition of the trade and its upcoming prospects, as well as peripheral forces within the business so that a strategy can be arranged (Ansoff, 1987). Other tools such as Porter's Five Force analysis can supplement the SWOT analysis (Porter, 1998).
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