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While Microsoft is growing financially today, the company is also faced with numerous
problems and challenges nowadays
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Microsoft has been frequently sued by numerous competitors, U
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Department of
Justice and 50 states in the U
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with regards to antitrust violations
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This move
enabled Microsoft to dominate the web browser wars and elbowed its competitors since
consumers now have a free version of Internet Explorer
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S
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Aside from the antitrust suit that Microsoft eventually lost, a formidable challenge faced
by the company is the problem of computer and software piracy
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This is appalling since even products and software not yet ready
for release to the global market are copied and sold
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These viruses cause the computer to act
sluggishly losing important data and files
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Another huge challenge against Microsoft today is the shift of the world market to an
open source program
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The difference lies in that Linux is a
stable program, its source code are open and can be modified, it has the best technical support,
it runs on a wide range of hardware and most of all it is free
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The market would now gradually shift to Linux
and other open source program gobbling up the huge market share and monopoly enjoyed by
the company
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Greater competition and struggle in the software business is also a challenge to the
growth of the company
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Aside from competition from other companies, there has also been a trend towards
liberalization of the market and the software industry
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S
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Source codes and computer programs that is unique and the
vital in building computers softwares will be gradually distributed to open source programmers
and other independent software companies making these source codes available to the public
and breaking Microsoft’s monopoly on software designing
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This move would also decrease the dependency of the market to the
products offered by the company since the consumers will have a clear and distinct choice
when buying
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First, the company must diversify its products
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Product diversification would mean the modification of products that
would have an edge over other competitors in terms of performance, ease of use and
compatibility
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Microsoft must also venture producing products and not concentrating all its
resources and manpower on a specific area which is software development and design
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Diversification would also mean entering new markets such
as China to relieve competition from market rich regions of the world
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SWOT Analysis of Microsoft Corporation

Strengths
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Applications and operations divisions along with recently created online
service network divisions (MSN)
Flexible workforce through contingent workers for seasonal/cyclical projects
Loyal, hardworking, and diverse workforce (20% minority, 26% women) who,
in addition to good compensation, have an opportunity to do well financially
through stock purchases
Multinational corporation operating through regional subsidiaries to minimize
cultural differences in more than 60 countries
New product, Neptune , is a Window's interface and is an example of smart
software
Relatively rapid product development processes that allow for timely updating
and release of new products
Revenues and profits rising at 30% a year with merger/acquisition or
investment in 92 companies over past five years
Software products have high name recognition, broad-based corporate and
consumer acceptance (Word, Excel, PowerPoint, Access), and numerous
powerful features that are in use worldwide, thereby promoting
standardization and competitive advantage through their ease of integration
and cost-effectiveness
Top rating from Fortune for best company to work at and most admired
company
Windows 95, 98, 2000 series, and Windows NT are globally known as the PC
desktop operating system with a market share of about 88%
World's largest software company with global name recognition and strong
reputation for innovative products

Weaknesses
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Between 1990-1995, Microsoft leadership failed to correctly anticipate the
growth or popularity of the Internet
Bill Gates has become Microsoft's chief software architect but has not yet
developed a substantially new line of products
Dependency on hardware manufacturers to pre-install Microsoft's PC
operating system
Downside of product launches and deadlines contributes substantially to
employee burnout
Employee turnover has increased from 6% for a ten year period to 7
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Jackson's breach of judicial discretion and
conduct in the Microsoft antitrust case clouded the proceedings in Microsoft's
favor
Mobile phone applications and exploitation of personal digital assistants
represent a growth industry so that strategic alliances could provide Microsoft
with opportunity in a market where it currently has little or no significant
presence
Popularity among people for Internet access
The demand for personal computers in American and global markets remains
strong despite the growth and increasing popularity of personal handheld
devices

Threats
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Apple and Linux threaten Microsoft's 88% market share of the desktop
operating market
Between 1993-95, Sun Microsystems, Netscape, Oracle, IBM, AOL, and other
companies moved into the Internet space and defined it while Microsoft failed
to anticipate its growth or popularity
Currency exchange rates affect demand for application/operation software
and hardware, and fluctuating currencies can negatively impact revenues in
the global marketplace
Department of Justice antitrust litigation and current appeal creates
uncertainty among employees since its outcome is not known
Hardware manufacturers (Sun Microsystems, Oracle, IBM) have collaborated
on new platform technologies that replicate much of the value of Windows
Hardware manufacturers (Sun Microsystems, Oracle, IBM, AOL, and Apple)
are issuing their own pre-bundled programs on their own hardware
Linux influence growing from 7% in 1998 to 17% in 1999
Personal computers, mobile-phones, personal digit assistants, entertainmentoriented hand-held computers, and similar wireless products for Internet
access do not require Window operating system products
Rapid development of mobile devices that will displace/replace personal
computers

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Recession or economic slowdown in the U
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or global market impacts
personal computer equipment sales and their need for an operating systems
Software piracy of commercial and consumer applications software on a
global scale threatens revenue streams
Technology life cycle is shorter and shorter
Unix dominates high-end mission-critical applications and its customers do
not believe Windows can handle these operations



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