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Microsoft (SWOT Analysis)

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“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”

Microsoft 

Microsoft Corporation (Microsoft) develops, manufactures, licenses, and supports software products for many computing devices. Microsoft has shown a strong performance through its operations. Strong operating performance lends financial stability to the company, which could be leveraged to seek more growth avenues in the future. However, intensifying competition could affect Microsoft’s margins and market share.

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Location of Factor

TYPE OF FACTOR

Favorable

Unfavorable

Internal

Strengths

  • Strong brand image
  • Consistent financial performance and strong balance sheet
  • Increasing research and development investments

Weaknesses

  • MSN’s low search engine market share
  • Slow adoption of Windows Vista
  • EU penalty on Microsoft

External

Opportunities

  • Expansion into consumer technology business
  • Increasing importance of virtualization
  • Software plus services

Threats

  • Intense competition
  • Open source model
  • Threat of piracy
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