Paraphrase and Summarize!

I want this to be paraphrased and summarized. Now, it has 5 pages long, I want 3 pages after summarize.

 

Detail:

– Strengths (Only Paraphrase)

– Threats and Opportunities (Both Paraphrase and Summarize)

  

Strength

1. 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.

2. Strong margins and cash position

Microsoft enjoys strong cash flow conversion rates. In FY2012, the company was able to convert 186% of its net income into cash from operations. Comparatively, IBM converted 118% of net income during FY2011 and Apple converted 122% of net income into cash from operations in FY2012. The strong cash conversion that Microsoft enjoys indicates the inherent strength in the company’s business model which is dominated by sticky revenues requiring lower cost of acquisitions and pricing power associated with products that command high switching costs. The company’s strong cash flow generation capability supports its growth prospects. Strong cash flows and margins provide resilience to the business operations and reduce vulnerability to market declines. Cash flows enable the company to further finance growth at feasible costs.

3. Strong Intellectual Property

Securing patent rights is important for the development of the company’s product portfolio. Strong patent portfolio creates market exclusivity to the proprietary technology, giving the company an edge over its competitors. The company’s success depends primarily on its ability to maintain and establish the proprietary nature of its technology through the patent process. The company protects intellectual property investments in a variety of ways. It actively works in the U.S. and internationally to ensure the enforcement of copyright, trademark, trade secret, and other protections that apply to its software and hardware products, services, business plans, and branding. Microsoft maintains a comprehensive U.S. and international portfolio of intellectual property which help it in protecting its technologies. As of December 2012, Microsoft is one of the leading technology companies with a portfolio of over 31,000 U.S. and international patents issued and over 38,000 pending. Microsoft is also involved in outbound and inbound licensing of related patented technologies that are incorporated into licensees’ or Microsoft’s products. The company also purchases or license technology that it incorporate into products or services. A strong patent portfolio would help the company protect its various products from being infringed, strengthen its market presence and generate revenue through milestone licensing fees.

References

http://advantage.marketline.com.ezproxy.snhu.edu/Product?pid=8ABE78BB-0732-4ACA-A41D-3012EBB1334D&view=SWOTAnalysis

http://callisto.ggsrv.com/imgsrv/FastFetch/UBER1/68489_GDTC22599FSA

Threats

1. Declines in PC market

The PC market is further set to experience a decline in 2013. According to the industry estimates the worldwide PC market is expected to decline by 1.3% in 2013 compared to a decline of 3.7% in 2012. In near term, the PC market will continue to witness lackluster growth and increased substitution of tablets will further depress the growth rates. The company’s Windows division’s revenue growth is largely correlated to the growth of the PC market worldwide, as approximately 75% of total Windows division revenue comes from Windows operating system software purchased by original equipment manufacturers. The trend of most of the growth coming from emerging markets is likely to impact the profitability also adversely. In emerging markets, average selling prices are low and piracy is high. These factors will limit growth opportunities for the Windows PC operating system and Office applications.

2. Rapid Technological Changes

The technology market is subject to rapid changes, and to compete effectively, the company must continually introduce new products that achieve market acceptance. The IT enabled communication equipment industry is characterized by fast technological changes, evolving industry standards, changing market conditions and frequent new product and service introductions and enhancements. The introduction of products using new technologies or the adoption of new industry standards can make the existing products or products under development obsolete or unmarketable. In order to remain competitive and increase its sales, the company needs to adapt to the rapidly changing business environment.

3. Availability of Pirated Versions of its Products

Microsoft is exposed to a major threat related to the availability of pirated versions of its software products. Every year, the company loses billions of dollars due to the circulation of pirated versions across the world. Microsoft loses significant amounts of revenue owing to the piracy rate of 30% or more in several countries. Though the damage is limited in the US, due to its stringent intellectual property laws, it faces enormous losses in those countries with comparatively lax copyright laws. For instance, pirated versions of Windows 7 are already available across China. This has been a major threat to the company and will always remain a cause for concern, affecting its business growth.

4. Highly Competitive Environment

Intense competition across business segments could limit the company’s business prospects. Microsoft faces stiff competition in all its operating segments. The major competitors of Microsoft include Apple, BMC, CA, Inc.,

Hewlett-Packard, IBM, Nintendo and Oracle. In the online search engine sector, the company faces competition from Google and Yahoo, which are the major players in the market. Huge competition across its business segments could make the company susceptible to market pressures, leading to a loss in market share and decline in revenue.

5. New technologies leading to erosion of competitive advantages

The windows PC franchise is destined to decline as the push into cloud computing continues. The cloud computing does away with the historical dependence on operating systems. Microsoft itself has tapped into the growing cloud market. However, the consequences include lower demand for Windows operating system. This is a significant competitive disadvantage for the company as it is a new entrant into cloud business. Furthermore, despite the expectations of Windows Azure effectively making up the loss of revenues from Windows PC, the profitability of Windows Azure will be lower. The switching costs that protected Windows PC so far, have been declining. From medium term to long term, Windows PC is likely to lose market share and pricing power. The hosted applications incur higher costs in terms of management and hardware which is likely to impact the margins. Therefore as the revenue mix shifts towards cloud computing, the profitability will tread a decelerating path. Another threat to Windows PC comes from the proliferation of several devices like tablets and smartphones. Microsoft being a late entrant into this market, the customers are exposed to alternate operating systems from Apple and Google. In the current market, the customers are looking for convergence of devices. Amid such intention, the customers might choose alternate operating systems for the PCs as well. This is likely to impact Windows PC adversely.

Microsoft has to implement a business model change to defend market share in an environment where cloud adoption has been rapid. Business model transition is fraught with many risks and failure to adapt its products to a subscription model will materially affect the company’s market share.

6. Foreign Currency Exchange Rate Risk

Exchange rate volatility could have an adverse effect on the company’s financial results. The company is geographically diversified and has operations in many parts of the world. The company operates in over 100 countries and a significant part of its revenue comes from international sales. The asset values, earnings and cash flows are influenced by a range of currencies. A substantial portion of overseas sales could be affected by foreign currency exchange rate fluctuations. A significant portion of revenues generated from overseas business operations are denominated in currencies such as U.S. Dollar, Chinese Renminbi, European Euro, U.K. Pound Sterling and Canadian Dollar. It is exposed to currency risks associated with the purchases, sales and borrowings from different markets. Changes in the exchange rates could affect the consolidated results of operations and thereby impact its overall profitability.

Opportunity

1. Demand for Smartphones

The company could capitalize on the growing demand for smartphones, which are emerging as a major growth opportunity for mobile device manufacturers. According to industry analysts, the global market for smartphones, is predicted to reach from 487 million units in 2011 to more than 675 million units (approximately 35%) in 2012, more than 907 million units (approximately 35%) in 2013 and surpass 1 billion by 2014. The growth would be driven by factors including lower product cost, improved handset design and functionalities, the expansion of global mobile email and browsing services, the emergence of 3G and 4G network technologies, and the standardization and upgrades of operating systems. Considerable demand is expected from developing countries, particularly the Asia-Pacific region, besides North America. Emerging countries including China, India and Brazil are expected to witness significant usage in smartphones other than the US and the UK. By 2016, China would be leading the smartphone market with approximately 20% of market share, followed by the US (approximately 15%), India (approximately 10%), Brazil (approximately 5%) and the UK (approximately 4%). The company could look forward to increase its market presence across the emerging countries to fuel its revenue growth.

2. Partnerships and Collaborations

The company could benefit from the various strategic partnerships that it enters. In February 2013, Microsoft introduced the Microsoft 4Afrika Initiative, a new effort to help place tens of millions of smart devices in the hands of African youth by 2016. Also during the month, the company in collaboration with the government of Kenya’s Ministry of Information and Communications and Indigo Telecom Ltd., launched a pilot project to deliver low-cost wireless broadband access to locations near Nanyuki and Kalema, Kenya. In January 2013, Microsoft signed a patent licensing agreement that gives BMW access to the latest Extended File Allocation Table (exFAT) to enhance the digital entertainment offerings in BMW’s line of automobiles. The company entered into a transformative three-year Joint Enterprise Licensing Agreement with the U.S. Army, U.S. Air Force and Defense Information Systems Agency for expanded access to its solutions.

In December 2012, Microsoft announced plans to make Microsoft Surface available at additional retailers and transition of several of the stores into permanent Microsoft retail outlets. In April 2012, the company entered into strategic partnership with Barnes & Noble, Inc to accelerate the transition to e-reading. The company also acquired over 800 patents and their related patent applications from AOL Inc. In February 2012, the company entered into a strategic application partnership with Good Technology to enable the use of the Good for Enterprise solution on Windows Phone devices. In January 2012,

Microsoft and TechStars enhanced their relationship through the new BizSpark Plus program for accelerators and incubators. Partnerships and collaborations would enable the company to enhance its product and service offerings and serve its customers better.

3. Growth of cloud offering catalyzed by positive market trends

The cloud computing is estimated to grow at a fast pace, catalyzing growth opportunities for the company’s cloud offering. According to the industry estimates, during 2013, the spending on public cloud platforms is expected to increase by 18.5%. Furthermore, businesses are expected to spend $300 billion annually on cloud services. As the rate of businesses moving to the cloud continues to accelerate, Microsoft has several unique advantages that can be leveraged to drive growth from its cloud offering which primarily includes Windows Azure and Office 365. The enterprises are moving to the cloud on their terms and often use hybrid solutions that include the cloud and their existing datacenter investments. The Windows Azure platform allows businesses to connect existing investments and develop new applications reducing the time from concept to deployment with little upfront cost.

4. Continued opportunities in the server and tools space

The company’s server and tools market continues to experience a surge in demand. The server market seemed to have experienced a rebound in fourth quarter of 2012. The server market is expected to continue growth until 2015 as several large customers are expected to demand servers to support the datacenter growth. Worldwide application server market revenue is expected to grow 17% year-over-year from $7 billion in 2011 to $21.2 billion by 2018. Microsoft’s server and tools division has been witnessing strong revenue growth. Continued demand in this space will further enhance the company’s growth prospects.