Starting more than 30 years ago as by co-founders Paul Allen and Bill Gates as a developer of programming languages, Microsoft has become a technological giant, now being included in the Fortune 500 companies. From then it has continued to quash emerging competitors earning the impression of monopolizing the industry (Cohen, 1999). But as the time becomes more fast-paced, technological development is now making leaps with not only Microsoft’s advancements but also its competitors.
At this point, competitors are now making leaps, decreasing the gap between them and Microsoft, making them a threat to Microsoft’s industrial governance. This paper aims to analyze the current status of Microsoft using the SWOT analysis method and from there, develop new strategies for the improvement of their current position. Strengths Most of Microsoft’s strengths are focused on the nature of their policies especially with their employees, and with the nature of their vision, which, according to the company is to enable people to accomplish more tasks effectively and efficiently through the use of computers.
Microsoft develops and manufactures a wide range of products that will cater to many different things. These include operating systems of not only PCs but also other intelligent devices such as smart phones and palm tops. They also develop and innovate business application tools, web development tools, gaming products and documentation programs, internet applications and servers. The company has continuously developed and innovated their products. Periodically, Microsoft releases upgrades and newer versions of their products.
In particular, their Windows Operating System has already had more than a dozen versions; the same goes for Microsoft Office, Internet Explorer and their other products, with each subsequent version, an improvement of the version before it. Upgrades are always available in the internet. Just recently, they developed an operating system designed for mobiles. As an act to improve the status of their Home and Entertainment segment, X-box 360 was launched in 2005.
Through their continuous development, the company has made it from a small business more than 20 years ago, to become one of the Fortune 500 companies. In addition, Microsoft’s partnership with big names like Sony, Intel and Acer, in a way, ensures the company’s place in the computer industry. According to Microsoft’s 2005 Annual Report, the company has experienced growth. The company’s revenue has increased by 8% from 2004 to 2005 while their operating income has increased by more than 60% from 2004 to 2005.
A 14% increase in revenue happened from 2003 to 2004 while the operating income decreased by 5% from 2003 to 2004. This implies a continuous growth in revenue from 2003 to 2005 and a significant recovery from operating income loss in 2004. Also, according to the report they are expecting the continuity of this growth in revenues for the years to come as a result of their move to license their products. The high market share (80-88%) of Microsoft’s Operating System and the wide distribution of their products has standardized the use of programs worldwide.
For example, most people would be more familiar with using Microsoft Office than Open Office. This phenomenon can be seen as a cycle because the standardization of programs which resulted from the wide distribution of Microsoft products further increases the distribution of Microsoft products. In effect, the term “user-friendly” has become a standard based more on the characteristics and nature of a particular Microsoft product. This allows new products by Microsoft to penetrate the market more easily. Also, most softwares are designed to be compatible with Windows.
One of the things that Microsoft values, is customer connection. This makes available and allows for the continuous improvement of the company’s consulting and product support services. Help and Support is up and running in the company’s website 24 hours a day, giving the customers easy and accessible assistance regarding the company’s long list of products. Microsoft prides itself to be providing equal opportunities for all genders and nationalities, focusing more on its employees’ capabilities rather than prejudice.
This promotes a more diverse and wider range of ideas, resulting in the improvement of products and services and thus, the sales. The company also provides a graduate training program for those who want to pursue a career in their company. This equips future employees with the skills and knowledge required to be better contributors to the company’s growth. To keep the motivation and well-being of their employees as well as to attract more of them, the company provides a very attractive remunerative package.