SWOT Analysis of Microsoft Corporation

Microsoft's overwhelming strength is its financial position in the market. During fiscal 1994 (ending in June of that year), the company's revenues increased 24 percent to more than $4.6 billion; Microsoft posted a net profit of more than $1.1 billion (an increase of 20 percent over the previous year) during the same period. Revenues and profits for the company have increased at an average rate of more than 40 percent annually ("Ahead," p. 8). As a result, the company is a favorite among investors, and it has little problem generating the necessary funds for internal research and development, or to provide the necessary marketing support required to promote its diverse products.

The company's ability to generate such impressive numbers comes from the nature of the industry in which it operates. Microsoft's primary products, which produce most of its revenue and profits, cost

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nment, and the next generation of Windows, Windows95, is expected to generate more than $1 billion in sales during its first year on the market ("Ahead," p. 9). But Microsoft has moved into application software to supplement its operating systems, and application software is more expensive to develop both in terms of the research and development costs that go into the products, and in terms of the time it takes to bring a new product to market. In addition, while Microsoft and only a few other company have the industry presence to market operating systems, any number of smaller companies can develop application software for a niche market and become effective competitors to Microsoft. The decision to enter the application software arena also required changes in the internal structure of Microsoft that make it vulnerable. While operating systems are sold to manufacturers and end users are generally not the target of promotional efforts, application software is targeted directly at end users. Since Microsoft dominates the IBM PC market with its operating system, consumers who want an IBM-based computer have little choice but to go with the Microsoft operating environment since it dominates that market. But consumers who want a
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Some common words found in the essay are:
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Approximate Word count = 1460
Approximate Pages = 6 (250 words per page)

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