Microsoft Corporation is one of the leading computing companies that supplies software, hardware, and consumer devices to various regions across the globe. The founders of the Microsoft Corporation are Bill Gates and Paul Allen that began the operations of Microsoft in 1975 (Microsoft “Facts about Microsoft” n.p.). Microsoft currently has its headquarters at Redmond, Washington in the United States of America. The motivation of the company’s founders was to fill a software market niche in the area of personal computing. Microsoft has dominated that sector by holding the largest market share against competitors since its inception. Microsoft’s primary source of revenue is through the licensing of the operating systems (OS) and computer software that it develops (Microsoft “Annual Report 2015” n.p.). Microsoft has diversified from the supply of Oss into utility applications for both personal and enterprise computing needs. The company faces challenges and good events in its operation that are worth a reflection. Below is an overview SWOT analysis for Microsoft Corporation.
Strengths
1. Efficient Distribution Channel: Microsoft supplies programs to major computer manufacturers, and that presents the company with enough strength in its distribution channels. The manufacturers are always in operation and demand Microsoft’s software to enable their devices to operate. Therefore, Microsoft enjoys a steady demand in the market.
2. Brand Reputation and Loyalty: Microsoft has created an outstanding performance record due to the production of easy to use software. That has led to a significant number of loyal consumers to the company and a strong reputation. Those aspects have enabled the company to maintain a high level of sales and market share.
3. Secure Financial Positioning: Microsoft has experienced a growth in their revenue by about 8% between 2014 and 2015 (Microsoft “Annual Report 2015” n.p.). That indicates that the company is expanding in its financial capacity and increasing the ability to make profits. Therefore, Microsoft is capable of making further investments that can extend the market leadership it already enjoys.
Weaknesses
1. Dependence on manufacturers: the biggest weakness that Microsoft has originated from the company’s business model. Microsoft’s major clients are the manufacturers of computing devices that license the operating systems. Microsoft stands to lose its revenue capacity if those companies opt for other programs outside the enterprise.
2. Susceptibility of Windows products: the company’s revenue comes mainly from the distribution of software programs. However, the applications are susceptible to virus attacks due to the low levels of protection when in comparison with other programs (Florian par. 8). That exposes Microsoft to stiffer competition as the rivals seek to beat the company on that aspect.
Opportunities
1. Entry into mobile computing: Microsoft has expanded its software offerings to the mobile industry, and that presents an excellent opportunity to grow their revenue capacity (Palmieri, Singh and Cicchetti 180).
2. Industry growth: the demand for computing devices is always rising in the markets, and that presents an advantage for Microsoft. The company already has a business model that benefits from the sales that computer manufacturers make. Therefore, the increasing demand serves to enhance Microsoft’s revenues.
Threats
1. Intense competition: Microsoft participates in a market that has stiff competition especially from open source developers (Zhu and Zhou 1). Most consumers may opt to go for software programs that do not require licensing to minimize operational costs. That may hurt the ability of Microsoft to compete effectively.
2. Changing Consumer Trends: Most buyers in the market tend to overlook the purchase of personal computers, such as desktops and laptops, in favor for smartphones and tablets (Bell 5). Microsoft has a subtle share of that market implying that they will be unable to generate sufficient revenues when the trend grows. Microsoft has to find ways of innovating in that sector to minimize the direct market threats posed by the competitors in the same market.
Works Cited
Bell, Gordon. "Moore’s Law evolved the PC industry; Bell's Law disrupted it with players, phones, and tablets: New Platforms, tools, and sevices." Microsoft Research (2014). Print.
Florian, Crisitian. Most Vulnerable Operating Systems and Applications in 2014. GFI. 2015. Web. 2 Apr. 2016.
Microsoft. “Annual Report 2015.” Microsoft Corporation. 2016. Web. 2 Apr. 2016.
Microsoft. “Facts about Microsoft.” Microsoft Corporation. 2016. Web. 2 Apr. 2016.
Palmieri, Manuel, Inderjeet Singh, and Antonio Cicchetti. "Comparison of cross-platform mobile development tools." Intelligence in Next Generation Networks (ICIN), 2012 16th International Conference on. IEEE, 2012. Print.
Zhu, Kevin Xiaoguo, and Zach Zhizhong Zhou. "Research note-lock-in strategy in software competition: Open-source software vs. proprietary software." Information Systems Research 23.2 (2012): 536-545. Print.
