SWOT analysis of Microsoft (Strategic analysis of Microsoft)

By: | Tags:

SWOT analysis of Microsoft (Strategic analysis of Microsoft)

This is a thorough SWOT analysis of Microsoft. The purpose of this article is to analyse the strengths and the weaknesses of Microsoft. It also explores the opportunities and the threats facing the company. Microsoft was founded in 1975 by Bill Gates and Paul Allen. It is an American technology giant, headquartered in Redmond, Washington.

Strengths of Microsoft

Microsoft is one of the companies that revolutionised the word of computers. Without its interventions with innovation, it is difficult to fathom how the computer world would have looked like today. Its main area of operations are software, electronics, personal computers, and related services.

Microsoft has come up with a number of excellent products and services such as Microsoft Windows, Microsoft Office, the Internet Explorer, Microsoft Edge, Xbox video game console, and Microsoft Surface computers. It is one of the top five tech companies in the United States along with Google, Apple, Amazon, and Facebook.

Microsoft Windows is the leader in global desktop operating system (OS) with around 73% market share (Liu, 2021). Microsoft’s revenue for the fiscal year 2020 was $37.2 billion – a 12% increase. Several of its products and services have seen increase in sales (Microsoft, 2021).

Microsoft a household name around the world. It is a trustworthy name in the world of computers. Consumers buy its products and services because of their general satisfaction with it and its reputation.

Microsoft has won numerous awards and accolades over the years. In 2019, it earned the first spot on the JUST Capitals Top 33 Companies for Workers by Industry. This award recognises companies which have shown their commitment to providing programmes, benefits, and incentives to keep their employees safe and healthy as well as preparing them for the future of work. In the same year, Microsoft ranked first on the Ranking Digital Rights Corporate Accountability Index.

Microsoft had secured the top rating in 2019 for both environmental and social scores on the ISS Environmental and Social Quality Score. This measures corporate performance on over 200 factors. In 2018 Microsoft ranked sixth among the top 100 companies in the world with the best CSR reputation.

Weaknesses of Microsoft

Though Microsoft has a number of successful products and services in its portfolio, it also has failed in some areas. Windows mobile, Zune, MSN, and Windows Vista are some of the failure stories. Similarly, Microsoft had decided to drop support for Windows 7. It had pushed users to stop using it as it will not fix any new bugs, or fixe any issues which may leave users venerable to hackers. This is a problem due to the fact Windows 7 is still very popular as many users use this operating system.

Microsoft has not much achieved in smartphone market. It is yet to come up with a compelling smartphone device. Likewise, it is falling well behind the major competitors in the browser market. The Internet Explorer is declining rapidly, and Edge has not made any significant gains yet. It should also be mentioned that as the usage of PC is declining, it would hurt the profit of Microsoft as it is a major provider of software and devices.

Microsoft’s corporate image has been affected by a number of controversies. Locking vendors and consumers into its products and services, bad labour practices, and ignoring unauthorized copying of its own software are some of the issues to consider in this regard.

Opportunities for Microsoft

Demand for cloud computing is on the rise and Microsoft can benefit from it with its Azure service. Likewise, Microsoft Edge has potentials to increase its global browser market share. It currently has just over 3% share (Statcounter, 2021).

Microsoft bought LinkedIn with $26.2 billion (Microsoft, 2021). LinkedIn is the world’s largest professional networking site. This acquisition has enabled the company to integrate it with its enterprise software, such as Office 365. Likewise, it can benefit from further success of LinkedIn as a social networking site. Opportunities for similar acquisitions are also worth exploring.

Threats to Microsoft

Threat is the last component of the SWOT analysis of Microsoft (Strategic analysis of Microsoft). Microsoft considers a number of threats and challenges that can jeopardise its operations. Security vulnerabilities, disclosure and misuse of personal data, legal changes and disputes, and piracy to name but a few.

One of the main threats facing Microsoft is the security threat against PCs and macOS devices. Almost a billion attacks were recorded in the second quarter of 2020. Statistics revealed by Kaspersky shows that a total of 899,744,810 were recorded from online resources across 203 countries (Moore, 2020).

Intense competition in all of the markets that Microsoft caters for, may lead to increased costs, and lower revenues. Apple’s Mac, Google Chrome, Safare, Facebook, and Twitter are all putting a lot of pressure on Microsoft in different areas and capacities.

Hope the article on the ‘SWOT analysis of Microsoft (Strategic analysis of Microsoft)’ has been useful. You may also like reading Marketing mix of Facebook. Other relevant articles for you are:

SWOT analysis of Google

Competitors of Amazon (Competitor analysis of Amazon)

PESTEL analysis of social media industry

If you liked any of these articles, please feel free to share with others by clicking on the social sharing icons.

Last update: 13 July 2021

Liu, S. (2021) Operating systems market share of desktop PCs 2013-2021, available at: https://www.statista.com/statistics/218089/global-market-share-of-windows-7/ (accessed 12 July 2021)

Microsoft (2021) Microsoft cloud strength fuels first quarter results, available at: https://news.microsoft.com/2020/10/27/microsoft-cloud-strength-fuels-first-quarter-results-2/ (accessed 13 July 2021)

Moore, M. (2020) Microsoft Office facing more security threats than ever before, available at: https://www.techradar.com/uk/news/microsoft-office-facing-more-security-threats-than-ever-before (accessed 16 June 2021)

Statcounter (2021) Browser market share worldwide, available at: https://gs.statcounter.com/browser-market-share (accessed 11 July 2021)

Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.