MICROSOFT

Microsoft



Microsoft

Introduction

Microsoft Corporation is a worldwide company that creates and supplies several different software packages, maintains a number of Internet sites, and develops computer hardware. Microsoft is the largest supplier of computer software in the world, known by software bundles including the infamous operating system Windows XP (Pro and Home editions), Microsoft Office (Word, PowerPoint, Excel, etc.) and Microsoft Visual Studio .NET (for programmers). The company has thrived on its ability to develop innovative software, and has become known for stable and reliable operating systems for use with a personal computer. Microsoft has also developed server-side software, called Windows Server 2003, to serve corporations and governmental organizations.

SWOT Analysis

Strengths

* Leadership position in client distribution and branding (Deck, 2006, 57)

* Management's experience and skills (Press Pass, 2005, 57)

* Fast and courteous customer support (Cowley, 2003, 54)

* Strong brand image

* Innovative (Microsoft.com, 2006, 54)

* Broad support from software vendors

* Capability to set and control standards

* Popularity of MS Office suite applications

Weaknesses

* Compatibility with other products.

* Dependency on hardware manufacturers.

* Perception by consumers and manufacturers.

Opportunities

* Expansion into open source software.

* Develop more online applications

Threats

* Upcoming competition from top competitors.

* Lack of affective security systems in Microsoft Internet Explorer.

Industry Evaluation

Software is an integral part of today's uncertain economy, as the push for greater globalization and efficiency drives much of the spending in business markets around the world. In order to maintain a competitive edge in an increasingly competitive global market, companies are spending more and more on hardware and software infrastructures (Yahoo!Finance, 2006, 24).

Microsoft is among 413 companies that produce and distribute application software products and services. These companies are all part of the Application Software industry within the technology sector, which is dominated by one software giant; Microsoft. More specifically, Microsoft is categorized into the Developmental Tools, Operating Systems, and Utility Software subindustry, which includes companies that "design, develop, market, and support software for developing, testing, and debugging applications; for computer maintenance; and for desktop management" (Hoovers.com, 2006, 87).

Microsoft, Oracle Corp, CA Inc., and SAP Aktiengesellschaft, with a four-firm concentration ratio of 39% dominate the industry. Most of the other 411 firms in the industry specialize in smaller niches, providing specialized software services such as accounting, business management, etcetera, and have profits under $1 billion per year. For this reason, the computer application industry has monopolistic competition (MSN Money, 2006, 57).

The top-selling software company is currently Microsoft, with $41.4 billion in sales in 2005, and is joined in the competitive arena by other top sellers such as Oracle Corp. with $12.9 billion and SAP Aktiengesellschaft with $10.4 billion. Other industry leaders in sales include CA Inc., Intuit Inc., Adobe Systems Inc., B.M.C. Software, Compuware Corp., and Novell Inc., each experiencing revenues exceeding $1 billion during 2005. Within the Developmental Tools, Operating Systems, and Utility Software subindustry, top competitors include Microsoft, International Business Machines (IBM), SAP Aktiengesellschaft, and Computer Associates International, who ranked a respective first, second, third, and fourth in application software sales (Yahoo!Finance, 2006, 24)).

Strategic Evaluation

Microsoft supports a number of values that translate into ...