Running a company is not an easy task. Numerous things must be taken care of to make sure that everything goes smoothly. From internal factors to external factors, several risks need to be calculated and analysed to stay safe and let large companies like Microsoft run smoothly. SWOT analysis and PESTLE analysis are strategic frameworks that evaluate the external and internal environment of the business. They calculate both opportunities and risks for better decision making. PESTLE analysis is done keeping in mind the external factors affecting the company, namely political, economic, social, environmental, technological, and legal. Here is a Microsoft case study pestle analysis for your reference. Have a look:
- Political
When it comes to political factors, we usually examine new government policies, ongoing political disruptions, trade concords, matters related to the import and export of raw materials, etc. that can affect the growth of large companies. Here are the political factors that have an impact on the work of Microsoft:
1. Ongoing issues with the Chinese government about the distribution and supply system.
2. Penalties due to the violation of EU trust regulations. Microsoft lost hundreds of millions of dollars in penalties.
3. Microsoft has been labelled as a monopolist. Many trade unions have accused it of hiring lobbyists to gain political influence.
Analysing the above-mentioned points and planning strategies to deal with them can be very helpful for the company.
- Economical
Economic factors like economic growth rates, the effect of the COVID-19 pandemic on the world economy, Brexit, interest rates, inflation, exchange rates, and unemployment rates can both positively and negatively affect companies like Microsoft. Here are some of those factors:
1. The economic stability of third world countries acts as a great opportunity for Microsoft to grow.
2. The effects of the COVID-19 pandemic are visible in every business. And Microsoft is not an exception.
3. Many countries have implemented protectionist trade policies to protect their domestic businesses.
With employees all over the world, these factors must be considered while doing a Microsoft PESTLE analysis.
- Social
Social factors refer to the changing cultural trends in any society, which can equally affect the growth and development of any business. Points like health consciousness, population growth rates, age distribution, changing cultural perspectives, and career attitudes play significant roles here, and analysing them can be very beneficial for any business. Microsoft operates in different countries all over the world, so these cultural and social factors must be understood. Here is what Microsoft should look into:
1. The company is facing tough competition from the growing smartphone market. These phones are proving to be an alternative to PCs and laptops.
2. There is an ongoing shortage of STEM professionals. They are people working in departments like science, technology, engineering, and mathematics. Leading to a lack of demand for the companies' products.
3. Social and political trends keeps changing, and Microsoft has been way behind. It needs to keep up with them.
- Technological
As Microsoft is a company that majorly conducts its business in the technological arena, here are some factors that could be beneficial for the company.
1. There is fierce competition in the tech market and software development. Microsoft has competitors in the form of Google and Apple.
2. The scope of artificial intelligence has opened more and more avenues for the company.
3. Microsoft is a trillionaire company with a lot of wealth at its disposal. It should use the opportunity to invest in the R D department to invent something unique for its customers.
- Legal
The law of any state plays a significant role in setting up any business or company. It is one of the determining factors here.
1. Microsoft needs to work on the allegations of gender discrimination by its employees. The company must maintain a healthy workforce ratio.
2. There have been several lawsuits filed against Microsoft. Being a global brand comes with challenges. And the company needs to be prepared to deal with all of them.
With Microsoft operating globally, these laws, restrictions, limitations, and permits are crucial for the ease of doing business.
- Environmental
The final thing that to consider during the PESTLE analysis is environmental factors. The ecological influence of our environment is quite huge on any business, and Microsoft seems to be doing well in that department.
3. Microsoft has been working towards environmental upliftment for a long time. It is the only tech company that is 100% carbon neutral.
4. It also charges itself with a carbon tax to be more environmentally conscious. The company should keep going in this direction and inspire others to do the same.
All these factors are crucial in understanding the workings of a business like Microsoft. So, consider all of them properly while doing your Microsoft case study Pestle analysis.
