Microsoft Corporation SWOT and PESTLE Analysis
COMPANY PROFILE -Microsoft Corporation
Business Sector :Information Technology
Operating Geography :United States, North America, Global
About Microsoft Corporation :
Microsoft Corporation is an American multinational technology company headquartered in Redmond, Washington. Microsoft develops, manufactures, licenses, supports and sells computer software, personal computers and consumer electronics. Microsoft’s portfolio of products and services is varied and huge which comprises of operating systems for computing devices, servers, phones, and other intelligent devices. It also makes server applications for distributed computing environments, productivity applications, business solution applications; desktop and server management tools. It has a high market share for software development tools. Also, in the segment of video games it has made its mark. Microsoft designs and sells hardware such as PCs, tablets, gaming and entertainment consoles, phones, other intelligent devices, and also other accessories. The company generates substantial revenue by offering a wide range of cloud-based and other services to individuals and organizations, licensing and supporting an array of software products, designing, manufacturing, and selling devices, and delivering relevant online advertising to a global audience. As of early 2023, Microsoft employs nearly 221,000 people on a full-time basis of which 122,000 are based in U.S. and 99,000 internationally.
Microsoft's USP or Unique Selling Proposition lies in being the world's biggest personal-computer software company, based on sales and the world's largest companies based on its revenue. It also belongs to one of the Big Five companies in the U.S. information technology industry, besides Google, Apple, Amazon, and Facebook. Microsoft’s mission statement reads “to empower every person and every organization on the planet to achieve more.”
Microsoft Corporation Revenue :
US $ 198.27 billion – FY ending 30th June 2022 (y-o-y growth of +18%)
US $ 168.08 billion – FY ending 30th June 2021
Competitive Analysis of Microsoft Corporation
1. Strong market share, diverse products and global reach 2. R&D focus help to maintain competitive advantage 3. Consistently strong financial performance 4. New business lines in cloud computing driving growth | 1. Failure in phone segment 2. Dwindling market position of Internet Explorer 3. UBS analyst downgrades Microsoft citing weakness in cloud business 4. Microsoft's layoff of ethics team raises responsible AI concerns |
1. Integration of LinkedIn data with Dynamics CRM 2. Artificial Intelligence to be the next big growth driver 3. Strategic partnerships and acquisitions to facilitate growth 4. Expansion in telco and space services by Microsoft Azure | 1. Threats from established and emerging competition 2. Cyber security attacks increasing in sophistication 3. Anti-Monopoly and other lawsuits risks 4. Increasing pressures on Microsoft to address compliance issues |
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Detailed SWOT Analysis of Microsoft Corporation
Strength
1. Strong market share, diverse products and global reach: Microsoft’s Windows desktop operating system is a household name and holds majority of market share. Microsoft has a strong and established brand that is recognized worldwide. The company is known for its reliable and high-quality products. The vast and varied portfolio is what essentially makes this company have such a huge customer base. The wide range of products include cloud-based computing services that include Bing, Microsoft Azure, Microsoft Dynamics CRM Online, Microsoft Office 365, OneDrive, Skype, Xbox Live, and Yammer. Microsoft’s software is popular not only in the western countries but across the globe. Microsoft has a large and loyal customer base that includes consumers, businesses, and government organizations. Its products and services are used by millions of people worldwide, which gives the company significant market power.
2. R&D focus help to maintain competitive advantage: Microsoft strongly focuses on Research and Development (R&D) through internal development which also helps it to achieve product differentiation and closer technical control. The R&D expenditure in FY22 and FY21 was 2.4 billion and $2 billion respectively which represented 12% of the company’s revenues in both the years. Microsoft has been significantly investing in its key business, for instance in order to make computing more personal, Microsoft is engaged in devising and selling first-party devices to help drive innovation, build new device categories, and spur demand in the Windows ecosystem. Surface Book 3 and Surface Go 2 were a few among several new products and accessories that were included in the Surface family in 2020. These new Surface products affiliate Surface Pro 7, Surface Laptop 3, and Surface Pro X. Also, the company's key focus has been on investing in content, community, and cloud services to pursue the expansive opportunity in the gaming industry.
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Weakness
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Opportunity
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Threat
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References used in Microsoft Corporation SWOT & PESTLE Analysis Report
1. Annual Report 2022 - https://www.microsoft.com/investor/reports/ar22/download-center/
2. Microsoft Internet Explorer is dead - https://timesofindia.indiatimes.com/gadgets-news/microsoft-internet-explorer-is-dead/articleshow/97924386.cms?from=mdr
3. Microsoft drops after UBS analysts say company faces cloud weakness - https://www.cnbc.com/2023/01/04/microsoft-drops-after-ubs-analysts-say-company-faces-cloud-weakness.html
4. Microsoft lays off an ethical AI team as it doubles down on OpenAI - https://techcrunch.com/2023/03/13/microsoft-lays-off-an-ethical-ai-team-as-it-doubles-down-on-openai/
5. NVIDIA and Microsoft to Bring the Industrial Metaverse and AI to Hundreds of Millions of Enterprise Users via Azure Cloud - https://nvidianews.nvidia.com/news/nvidia-and-microsoft-to-bring-the-industrial-metaverse-and-ai-to-hundreds-of-millions-of-enterprise-users-via-azure-cloud
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SWOT & PESTLE.com (2025). Microsoft Corporation SWOT and PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/microsoft-corporation/ [Accessed 23 Jan, 2025].
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