Microsoft Corporation is a multinational technology company of American origin that was founded in the year 1975. Microsoft is one of the largest IT companies in the world in terms of annual revenue generated, consumer electronics sold, licensed software sales, and related services. The company has made remarkable progress in its 40-years old history and is one of the earliest members of the Fortune 500 list of companies. Microsoft is also a part of the esteemed ‘Big Five’ of the US, with the other members being Meta, Apple, Amazon, and Google. Microsoft has a number of advantages over its competitors in terms of technology, widespread distribution of services, marketing, etc. All of these factors combined help to make sure that Microsoft retains its strong position in the global markets. In this article, we shall be taking a look at the competitive advantages that Microsoft enjoys. However, it must be noted that the list is not exhaustive.
Brand value
Microsoft is one of the largest IT companies in the world and almost anyone even remotely familiar with technology would know of the name Microsoft. Users can trust the brand without any worries, knowing the previous history of Microsoft. A survey conducted in 2020 confirmed the same, with as many as 60% of users stating that they were more likely to purchase Microsoft products than those of any other generic IT company.
Large user base
Having a large user base is perhaps one of the most important and essential competitive advantages that Microsoft enjoys. The majority of the PCs and laptops, nearly 70%, use Microsoft Windows as their default Operating System. This makes it much easier for Microsoft to reach out to customers when a new product or service is launched. The reviews and feedback received from all around the world also help the company to customize its product accordingly.
Free cash flow
Microsoft is one of the most profitable businesses in the world, with the gross profit margins in the last Financial Year exceeding 68%. This ensures a smooth cash flow within the company and gives some much-needed breathing space. The free cash flow also allows Microsoft to take some risks and push for aggressive marketing strategies; thus, facilitating a steady growth of the company.
First mover advantage
Microsoft was established much earlier than brands such as Google and Meta (formerly, Facebook). This allowed the company to gain immense popularity, trust, and consumer strength in its initial years. The first-mover advantage is considered to be the most important one in the case of Microsoft, with customers in the IT brand generally preferring to be sticking to a single company.
Technological advantage
Microsoft has access to the best technologies in the world, developed right at their laboratories. The company was the first to introduce upgraded security systems, high-speed processing CPUs, and many more. The company boasts of hiring the best minds in the world, who can surely create wonders with the keyboard in hand. The technology ensures that Microsoft does not fall behind its competitors.
Intellectual Property Rights
Microsoft owns rights to a large number of products through Intellectual Property rights and patents. The smart acquisition strategy of the company in recent history has proved to be of great success to the company. A few notable ones include LinkedIn, Activision Blizzard, etc. Additionally, there are thousands of patents that the company enjoys and anyone wishing to work on those would automatically be required to pay Microsoft.
Conclusion
We have seen in this article that Microsoft holds a number of advantages over its competitors. Microsoft does not seem to be facing any serious issues that affect its stronghold in the market, but nothing can be taken for granted in the IT field. The people at Microsoft need to continue their good work so as to continue to prove beneficial to both the customers and the company itself.
Frequently Asked Questions
Question. Who are the major competitors of Microsoft?
Microsoft faces stiff competition from a number of companies in different domains of its operations. Companies such as Google, Amazon, Apple, Samsung, etc. virtually operate at the same domains where Microsoft does.
Question. What are the strategic goals of Microsoft?
Microsoft has a simple motto, following which, the company has had tremendous success over the years. It aims to provide sustainable technology for the future by reinventing productivity and business processes.
Question. How satisfied are customers with their experiences at Microsoft?
Microsoft is one of the most well-reviewed companies worldwide. Customers are generally satisfied with the products they receive and in case they face any problems, the customer executives at the company are always willing to help out.
Question. What is Microsoft’s vision statement?
Quoting from the company’s website, Microsoft’s vision is “to help people and businesses throughout the world realize their full potential”.
