SWOT Analysis - Overview
Microsoft Corporation (Microsoft) is one of the leading providers of software and storage products and services. The
company enjoys a competitive position in the industry through its comprehensive product portfolio. Microsoft’s substantial
debt and involvement in legal proceedings are major causes for concern. The company, with focus on research and
development, and inorganic growth, could cash in on the growing demand for cloud computing and enhance its business.
The technological changes, intense competition across the segments, and the extensive use of pirated versions of its
products pose a huge threat to the company’s future growth.
Microsoft Corporation - Strengths
Strength - Comprehensive Product Portfolio
Microsoft offers a comprehensive range of software, services, and hardware solutions across different customer classes,
which enable it to enjoy a leading market position. Microsoft generates revenue by developing, manufacturing, licensing,
and supporting software and services across a wide variety of computing devices. The company does business worldwide
through offices in more than 100 countries. Microsoft carries out the development of systems (servers, personal computers,
and intelligent devices), server applications (distributed computing environments), information worker productivity
applications, business solution applications, high-performance computing applications, software development tools, video
games, and online advertising.
Microsoft also provides consulting and product and solution support service, and trains and certifies computer system
integrators and developers. It also concentrates on the development of various cloud-based solutions that provide
customers software, services and content over the Internet by way of shared computing resources located in centralized
data centers. The comprehensive product portfolio of Microsoft enables it to cater to a wide variety of customer
requirements across industries and geographies.
Strength - Consistent Increase in Revenue
Consistent increase in revenue not only helps the company to achieve financial stability, but also provides the necessary
internal funding for the expansion of its operations further. Microsoft’s revenue increased during 2009-2012 at a compound
annual growth rate (CAGR) of 5.98% from $58,437m in 2009 to $73,723m in 2012. During the fiscal year ended 2012, the
company’s revenue increased 5.4% to $73,723m, as compared to $69,943m in 2011. This significant increase in revenue is
due to strong sales of Server and Tools products and services and the Microsoft Office 2010 system, partially offset by the
decrease in Windows operating system revenue. For the fiscal year ended 2012, the Server and Tools segment reported
revenue of $18,696m, recording an increase of 12% over that in fiscal year 2011. The segment accounted for 25.27% of
the company’s total revenue in 2012. Consistent increase in revenue may indicate that the company is efficiently using the
shareholders' money and that it is generating high returns for its shareholders compared to other companies in the sector.