Microsoft SWOT Analysis

SWOT is an acronym for strengths, weaknesses, opportunities and threats related to organizations. The following table illustrates Microsoft SWOT analysis:

Microsoft SWOT analysis

Strengths in Microsoft SWOT Analysis

1. Microsoft is an undisputed leader in global marketplace in cloud segment. The technology giant offers a wide range of cloud-based computing services that include Bing, Microsoft Azure, Microsoft Dynamics CRM Online, Microsoft Office 365, OneDrive, Skype, Xbox Live, and Yammer. In 2018, Microsoft had global datacenter footprint to 54 regions – more than any other cloud provider. In the same year, the revenues of Azure hyperscale cloud grew 91 percent year-over-year. Moreover, Microsoft added nearly 500 new Azure capabilities in 2017 alone.[1]

2. Effective and visionary leadership by Satya Nadella is one of the factors that set apart Microsoft from competition in positive terms. Since taking over from Steve Ballmer as Microsoft CEO in 2014, Nadella has been bold and effective in restructuring and reinvention of the company. Initiatives such as refocusingMicrosoft’s mobile-based efforts and expanding many of its services to be offered on other platforms like Mac introduced by Nadella has proved to be effective up to date. It has been noted that leadership principles of Satya Nadella are based on the values of learning, choosing to create a positive, impact, finding ways to innovate and making meaning a priority.

3. High profitability of the business and solid financial position is a notable strength possessed by Microsoft. During the fiscal year 2018 the company generated USD 110.4 billion in revenue and USD 35.1 billion in operating income. Microsoft’s high level of profitability and solid financial position of the company is a considerable strength from multiple points of view. Particularly, solid financial position of the business can play an instrumental role in terms of facilitating new product development with positive implications on the long-term growth of the business.

4. Microsoft became the most valuable company in the world in 2018, getting the title away from one of its main competitors – Apple. In November 2018, Microsoft briefly reached a market capitalisation value of USD812.93 billion today, followed by Apple at a market capitalisation of USD812.60 billion[2]. At the end of 2018, Microsoft’s market capitalisation stood at USD779.7 billion as the stock closed at USD101.57 per share.[3] A high level of market capitalisation is an important strength for any business as it is an evident indication of trust of investors and customers on the company.

5. Diversified product portfolio is another considerable strength possessed by Microsoft. Unlike the portfolio of some of its direct competitors such as Apple and Samsung, Microsoft’s portfolio of products and services is vast comprising operating systems for computing devices, servers, phones, and other intelligent devices; server applications for distributed computing environments; productivity applications; business solution applications; desktop and server management tools; software development tools; video games; and online advertising. Additionally, Microsoft designs and sells hardware including PCs, tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories. Such a diversified portfolio protects and company against downturns in any specific product or service segment.

Weaknesses in Microsoft SWOT Analysis

1. Lack of innovation is one of the Microsoft’s major weaknesses. It has been noted that “right now people are sitting on a huge installed base of old Windows XP and Windows 7 computers. These users seem to be happy right now even though Microsoft has virtually abandoned Windows XP, their most solid operating system ever. They are temporarily happy because nothing on the market has shown them a good reason to upgrade.”[4]

In other words, Microsoft has lagged behind of its major competitors such as Apple and Samsung in terms of introducing innovative products and services and adding innovative features and capabilities to its current portfolio of products and services. While competitors have been busy to introduce innovative products such as Apple Watch and Samsung SMART TV, Microsoft has not launched an innovative product or services during the past several years.

2. Loss of leadership position in internet browser segment is a noteworthy weakness associated with Microsoft. Microsoft’s Internet Explorer was a leading browser application with market share of more than 90% for about two decades since the beginning of the 1990s. However, Internet Explorer was quick to lose its market share since the launch of Google Chrome in September 2008. In 2015 the company launched Microsoft Edge, as a successor of Internet Explorer, but this browser is also far behind market leaders such as Chrome, Safari and Firefox…

Microsoft Corporation Report contains a full version of Microsoft SWOT Analysis. The report illustrates the application of the major analytical strategic frameworks in business studies such as PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Microsoft. Moreover, the report contains analyses of Microsoft leadership, organizational structure, business strategy and organizational culture. The report also comprises discussions of Microsoft marketing strategy, ecosystem and addresses issues of corporate social responsibility.

[1] Annual Report (2018) Microsoft Corporation

[2] Warren, T. (2018) “Microsoft briefly overtakes Apple to become the world’s most valuable company” The Verge, Available at: https://www.theverge.com/2018/11/26/18109784/microsoft-apple-market-cap-2018-valuable-company

[3] Novet, J. (2018) “Microsoft closes out 2018 as the top public company” CNBC Markets, Available at: https://www.cnbc.com/2018/12/31/microsoft-finishes-2018-as-the-top-public-company.html

[4] HAVE HP, DELL, APPLE, MICROSOFT AND OTHERS FORGOTTEN HOW TO INNOVATE?

HOW CAN STARTUPS BENEFIT? (2016) 3R Cubed Group, Available at: http://rcubedgroup.com/have-hp-dell-apple-microsoft-and-others-forgotten-how-to-innovate-how-can-startups-benefit/