A2 understanding business

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Microsoft Corporation, more commonly known as Microsoft, is a multinational computer and microcomputer company, founded by Bill Gates and Paul Allen in 1975. The company develops, manufactures and markets software, operating systems, personal computers and services related to these products. The most famous are its Microsoft Windows operating systems, the Microsoft Office office suite, its browser formerly called Internet Explorer, and now called: EDGE. In addition, among the flagship IT products is the Xbox game console, and Microsoft Surface tablet. Microsoft is today the largest software manufacturer in world, but also one of the most influential companies internationally. In the 90s, the company diversified more and more and bought many companies such as Skype. However, these acquisitions weren’t all successful. The company also produces a wide range of other software for desktop computers and servers, and is present in areas such as Internet research, the video game industry, the digital services and mobile phones. In 2015, Microsoft is the market leader in operating systems for PC Compatible with IBM, and office software suite markets.

Conducting a SWOT analysis will help us get a better understanding of the company and how it can excel even more but first of all what is a SWOT analysis? SWOT is an important acronym for similar individuals and organizations in the business world and it stands for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is a useful technique to assess these four attributes which play a crucial role in an organization. Strengths and weaknesses refer to internal factors like (current processes, human resources, physical and financial resources etc.) while opportunities and threats focus more on external factors such as (market trends, economic trends, political and economic regulations etc.)

The matrix in this SWOT example summarizes the critical factors for the Microsoft business. The identification of strengths, weaknesses, opportunities and threats was made through internal and external audits, allowing Microsoft to optimize its decision making.

The elements presented in this SWOT matrix will be taken up in the next part which concerns the SWOT analysis.

Microsoft SWOT Analysis: Strengths

Leader in software solutions: Microsoft is the undisputed leader in the global market for software solutions, in particular in cloud computing. Its cloud solutions (Azure, Office 365 commercial) generated $ 23.2 billion in 2018.

Easy to Use Software: Windows OS, Office software products, and the vast majority of software solutions (consumer or professional) are relatively easy to use.

Market dominance: Microsoft was the fourth largest company globally in 2018 with a presence in more than 190 countries.

Constant Growth: Microsoft's presence and strength continues to grow in the growing cloud market.

Reputable brand with high customer loyalty: Microsoft customers are very loyal to it because they have great confidence in their products and services.

Microsoft SWOT analysis: weaknesses

Dependence on the PC market: The sale of Windows-type software is directly dependent on fluctuations in the price of PC components as well as their reliability.

Cybercrime: Being the market leader, Microsoft is a perfect target for hackers who want to steal sensitive and expensive data. In addition, Microsoft software is usually quickly cracked by hackers.

Lack of innovation: In the phone and tablet market, Microsoft lags behind Apple and Google.

Unsuccessful Acquisitions: Some Microsoft acquisitions like Webtv, Linkexchange, Massive, and Danger have been unsuccessful. These unprofitable investments are a real weakness for Microsoft.

Microsoft SWOT Analysis: The Opportunities

Innovation in artificial intelligence: Microsoft has some potential to develop artificial intelligence and technologies related to video games. Investing in these areas could assert the company's leadership in this sector.

Smartphone industry: Microsoft may attempt a new approach to the mobile market despite the notable failure the company has experienced. The company is comfortably established in the PC market, it has the opportunity to expand into the mobile market.

Partnerships and Acquisitions: New acquisitions and strategic partnerships could allow Microsoft to gain market share.

Microsoft SWOT Analysis: Threats

Criticisms of HR policy: Microsoft's hiring policy has been heavily criticized because the company employs few women. The company's reputation could be damaged if such criticism is repeated.

Aggressive competition: Microsoft is in intense competition with Google and Apple. The established positions of these companies can threaten Microsoft's position in the market.