SWOT Analysis of Microsoft
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The purpose of this paper is to discuss and investigate an organizational behavior problem within a real life situation. This paper will specifically identify the problems and challenges that is currently facing the organization and developing a SWOT analysis to identify the relevant strengths and weaknesses of the chosen organization and how to use these resources in the company’s advantage.
The year was 1975, nobody knew then that personal computers would rule the market and would be an important and essential tool in man’s everyday business life. Micro Instrumentation and Telemetry Systems (MITS) announced the first computer, MITS Altair 8800. This milestone inspired pioneer computer enthusiasts namely Bill Gates and Paul Allen to develop a computer program for the MITS Altair 8800 using the published specifications released by MITS in the magazine Popular Electronics. Working day and night Gates and Allen succeeded in creating the first version of Microsoft BASIC for the Altair machine.
Allen then went to Albuquerque, New Mexico to do a demonstration of their software to the MITS president, Ed Roberts. The program ran perfectly in the first try impressing the MITS executive. Allen and Gates were then licensed to produce and distribute the computer program.
In March 1, 1975, Paul Allen and Bill Gates joined MITS as Directors of Software. They called their partnership Micro-soft. The succeeding years saw great improvements and advancements in the fields of computers and the steady progress and development of Microsoft Corporation as a significant player in the world of computer software. IBM approached Microsoft to design computer software for the computers they are making. Microsoft agreed and it released the highly sensational MS-DOS for the IBM platform. The popularity of MS-DOS enabled Microsoft Corp. to get the biggest shares in the. It also assured that Microsoft would monopolize the software and computer industry in the years to come.
Microsoft duplicated its success in MS-DOS by releasing ground breaking software named Windows. Windows features a window management capability that allows a user to view unrelated application programs simultaneously. It also provides the capability to transfer data from one application program to another. Aside from these advantages, Windows was also easy to use and has pleasing and uncomplicated interface for its users. Windows also has a graphic user interface and it has popularized computer terms such as toolbars, icons and mouse. Microsoft released other versions of Windows like Windows 95 and 98 that featured more improvements and enhancement.
While Microsoft is growing financially today, the company is also faced with numerous problems and challenges nowadays. Alongside this apparent success is a different aspect of the company. Microsoft has been frequently sued by numerous competitors, U.S. Department of Justice and 50 states in the U.S. with regards to antitrust violations. The plaintiffs argued that Microsoft abused its monopoly power in selling operating system and web browsers when it bundled its Internet Explorer with the Microsoft Windows operating system. This move enabled Microsoft to dominate the web browser wars and elbowed its competitors since consumers now have a free version of Internet Explorer. The U.S. Department of Justice also alleged that Internet Explorer will only work with Windows and not with other software made by Microsoft’s competitors .
Aside from the antitrust suit that Microsoft eventually lost, a formidable challenge faced by the company is the problem of computer and software piracy. Microsoft software and products are being pirated and copied illegally then sold to the consumers at half the price with no revenue going to the firm. This is appalling since even products and software not yet ready for release to the global market are copied and sold. Aside from software piracy there are also notions, reports and allegations that Microsoft and its programs are very vulnerable to hackers and computer viruses proliferating in the cyber world. These viruses cause the computer to act sluggishly losing important data and files. Viruses and other problems inherent in the programs made by Microsoft creates costumer dissatisfaction, negative publicity and loss of sales .
Another huge challenge against Microsoft today is the shift of the world market to an open source program. Open Source programs like Linux are softwares much like the one’s made by Microsoft but with a fundamental difference. The difference lies in that Linux is a stable program, its source code are open and can be modified, it has the best technical support, it runs on a wide range of hardware and most of all it is free. Since the main advantage of the Linux is that it is free and can be modified freely, Microsoft and its subsidiary companies and softwares are put in an unpleasant position. The market would now gradually shift to Linux and other open source program gobbling up the huge market share and monopoly enjoyed by the company. Linux and other open source program will also force Microsoft to open up the source codes and basic programming codes of its softwares to the public since the current trend now in software programming is open sourcing .
Greater competition and struggle in the software business is also a challenge to the growth of the company. The organization is being threatened by other competitors and other business enterprises that aim to get a big market share that is solely dominated by Microsoft. Aside from competition from other companies, there has also been a trend towards liberalization of the market and the software industry.
Liberalization means the gradual decrease of control on the part of Microsoft with regards to source codes and other computer programs because of the recent anti trust rulings made by the U.S. Supreme court. Source codes and computer programs that is unique and the vital in building computers softwares will be gradually distributed to open source programmers and other independent software companies making these source codes available to the public and breaking Microsoft’s monopoly on software designing. This “liberalization” would in turn strengthen other software companies in challenging Microsoft and providing alternative products to the consumers. This move would also decrease the dependency of the market to the products offered by the company since the consumers will have a clear and distinct choice when buying.
To combat these negatives external factors, a clear cut policy must be implemented by the company. First, the company must diversify its products. Because of recent government actions and other factors such as new competitors, Microsoft must diversify the products that it offers to the market. Product diversification would mean the modification of products that would have an edge over other competitors in terms of performance, ease of use and compatibility.
Diversification would also mean the production of new and unique products that would be bought by the market following the example made by Apple Corporation and their portable music players. Microsoft must also venture producing products and not concentrating all its resources and manpower on a specific area which is software development and design. It must increase its focus on game design, software publishing and home entertainment system to to ease the pressure of competition. Diversification would also mean entering new markets such as China to relieve competition from market rich regions of the world. Microsoft would benefit greatly if it totally enters the Chinese market because of the huge consumer base and the cheap labor cost being offered by China.
SWOT Analysis of Microsoft Corporation
- Microsoft is a huge global brand. It is recognizable for two main reasons. It was one of the largest software developers it has developed a customer base of around 30 million people. It has built its reputation on the successful development of its computer softwares namely the Windows line of products.
- Brand is all-important. Microsoft is one of the most established and healthy IT brands in the World, and has a very loyal set of enthusiastic customers that advocates and uses the brand. With loyal customers, it means that Microsoft does not only recruits new customers but retains old ones.
- The company is composed of different main offices inside the United States and around the globe making the distribution and development of its products easily accessible to the consumers. It has its offices in Germany, United Kingdom and Europe and sub offices in countries such as China, France and Korea.
· Microsoft lacks a solid client and service support center on the internet. This is important since problems and bugs with regards to their products must be fix rapidly to attain efficiency. The lack of a customer service center would erode the integrity and quality perceived by costumers on Microsoft products.
· Microsoft products have compatibility issues with other hardwares and softwares manufactured by other companies. This compatibility issue would then limit the ability of the customer to buy all products made by Microsoft since it would affect the stability and performance of a computer.
· Microsoft does not share the programming codes of its softwares making modification difficult if bugs and other malfunctions are detected by programmers not affiliated to the company.
- Microsoft moved into the Chinese market by producing computer programs based on the Chinese language and giving discretionary authority to the Chinese government to censure and to eaves drop on emails, documents and webpage.
- Microsoft has also diversified its products. During the past years the company has ventured into fields such as game design, game developing and publishing and the production of game consoles such as the Xbox.
- The company has also branched out to provide free email and news services to its costumers. It has also developed softwares and computer programs that is vital in organizing business spreadsheets and data.
· The success of Microsoft in software development has spawned other competitors to follow the footsteps of the company towards success. The primary competitor of the company in the operating systems industry is the Linux program developed by independent programmers. This program is easy to use and can be obtain free of charge.
· Since the company is diversifying in other fields it competes its products with the products being made by companies who have been experts in their chosen industry. The company might eventually lost its battles in making its products competitive when put side by side with products made by corporations which has established their name and reputation to the customers.
· Another threat that is being faced by Microsoft is the different lawsuits and indictments against the company being made by independent companies, programmers and software developers. These lawsuits do not only exhaust the financial resources of the company but it also promotes negative publicity and bad public image.
Microsoft with its apparent success in the present must face problems that will be evident in the near future. Although Microsoft is a leading company in its chosen field of software industry, the dominance and the monopoly that it enjoys can be erased and its dominance in the market can be eclipsed by other new companies in the industry. The paper has identified several problems inherent to the company and have highlighted the effects that these negatives factors will bring on the over all stability of the company in the future. Problems such as poor designs, the challenge of other competitors like Linux and tightening government control are some of the hindrances that will eventually obstruct Microsoft in its road to progress. To eliminate and to diminish the impact of these problems and difficulties, the company must undertake needed reforms and initiate policies that will improve certain aspects of the company.
To fully combat the problems being faced by Microsoft, the paper recommends some course of actions stated below.
Microsoft should adapt stringent maintenance and reliability on its products. It must implement measures that would help curb the effects of computer viruses and the company must employ stiff computer firewalls against hackers and identity thieves. Assuming viruses do get into the system, Microsoft must have an immediate manpower and technical resources to remedy the situation and in addressing the issues, and helping the costumers with regards to their computer problems. This is very vital since the absence of frequent maintenance and a costumer service hotline could adversely affect the company’s reputation, profits and costumers.
With regards to its products and softwares, Microsoft must be extra watchful when it is going to release a product. It must consider all legal and political changes occurring in the society to avoid being sued and fined with a heavy sum. This incident is not only counterproductive to the goals of the company but also damaging to a company’s reputation. Microsoft can also win against piracy by making its products pirate proof, making all softwares and products unable to function when they are recopies of the original. Employees should also be checked and security measures should be implemented in the office to prevent the leak of current projects and new softwares not yet released for the market.
In relation to the challenge posed by Linux and the advent of open source system, Microsoft can use and improve its quality management and maintenance with regards to a proper operations management. First, Microsoft in order to survive, must step up its quality management in relative to its products and softwares. Stepping up the level of quality management is not only improving the excellence and superiority of its products but also listening to the desires and wishes of the costumers since they are ones that must be satisfied by the company. Microsoft must replicate the steps and actions that they took that enabled their Xbox to be a success. It must listen to feedbacks from the publics regarding its products and implementing these feedbacks as a solid answer to the expansion of Linux.