Swot Analysis of Microsoft

SWOT Analysis: Microsoft Corporation

Strengths

· Applications and operations divisions along with recently created online service network divisions (MSN)

· Flexible workforce through contingent workers for seasonal/cyclical projects

· Loyal, hardworking, and diverse workforce (20% minority, 26% women) who, in addition to good compensation, have an opportunity to do well financially through stock purchases

· Multinational corporation operating through regional subsidiaries to minimize cultural differences in more than 60 countries

· New product, Neptune , is a Window's interface and is an example of smart software

· Relatively rapid product development processes that allow for timely updating and release of new products

· Revenues and profits rising at 30% a year with merger/acquisition or investment in 92 companies over past five years

· Software products have high name recognition, broad-based corporate and consumer acceptance (Word, Excel, PowerPoint, Access), and numerous powerful features that are in use worldwide, thereby promoting standardization and competitive advantage through their ease of integration and cost-effectiveness

· Top rating from Fortune for best company to work at and most admired company

· Windows 95, 98, 2000 series, and Windows NT are globally known as the PC desktop operating system with a market share of about 88%

· World's largest software company with global name recognition and strong reputation for innovative products

Weaknesses

· Between 1990-1995, Microsoft leadership failed to correctly anticipate the growth or popularity of the Internet

· Bill Gates has become Microsoft's chief software architect but has not yet developed a substantially new line of products

· Dependency on hardware manufacturers to pre-install Microsoft's PC operating system

· Downside of product launches and deadlines contributes substantially to employee burnout

· Employee turnover has increased from 6% for a ten year period to 7.4%

· Falling sales in the operating systems and server software sectors

· Frequent reorganization, red tape, and autocratic atmosphere dampen employee creativity leading to a loss of key personnel and chilling of communication and innovation; 5-layers of management

· IRS audits in 1989 and 1990 revealed employment status of contingent workers for whom Microsoft did not withhold taxes nor allow to participate in Microsoft's Savings Plus Plan or Employee Stock Purchase Plan, leading to a finding of tax liability for Microsoft in the "permatemps" Vizcaino litigation

· Little or no significant presence in the wireless market and Windows CE has been disappointing

· Not a key player in the Internet space and few products for Internet applications

· Perceived by many as a cut-throat competitor that uses its dominant market position to marginalize competition by stealing/destroying the competition's products, stifling product innovation, and decreasing the availability of competitor products

· Products have a single application focus and do not work well with or on-top of other products

· Reputation has suffered because of entanglement in antitrust and "permatemps" Vizcaino litigation

Opportunities

· Cheaper global telecommunication costs open new markets as people connect to the Internet

· Federal