SWOT analysis of Skype

Skype is a telecommunication software that enables users to interact online. This could be through an instant messaging option, chat, video conferencing or voice calling. Skype also permits users to exchange documents over the Internet. In addition to this users are also permitted to exchange both video and text-based messages online.

Skype is currently part of Microsoft Technologies which reinvented the tool to accommodate more customer services. From a centralized peer to peer messaging service Microsoft moved Skype to Azure which was more centralized, had a better user interface and also made text messaging more robust. Today Skype generates an annual sale of 859.82 million USD in the year ending 2016 and is one of Microsoft flagship products.

Table of Contents

Strengths in the SWOT analysis of Skype :

Strengths are defined as what each business best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Skype are:

Robust features: Skype has a lot to offer to its customers through the instant messaging platform. The software can be used to text message, chat, video call or voice call. Users are also permitted to exchange both video and text-based messages online and to exchange documents online.
Service Quality: Skype is growing in popularity primarily because of the quality with which the calls and messaging works. Many businesses use Skype to create an ecosystem where all their stakeholders get to interact with each other across a common platform.
Payment Model: Skye works on a subscription that allows unlimited usage for a fixed span of time.There are monthly, quarterly, half yearly and yearly subscription options available.
Huge customer base: Skype currently has close to 600 million registered users. Many businesses use Skype as the official platform for carrying out communication, video conferencing and meetings.
Market Leader: Skype is the world market leader in VoIP services.
Backing by parent company: Skype is backed by Microsoft Technologies one of the biggest names in the global information services market.

Also Read SWOT Analysis of American Airlines

Weaknesses in the SWOT analysis of Skype :

Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Skype are:

Building a new brand with pricing: Skype was initially a free tool and most customer’s associate Skype with the word free. With payment coming into the picture positioning the brand will not be an easy task.
Lowered barriers to entry: Skype was initially a free service and thus many users have registered into it using it for all kinds of purposes such as dating and sexual solicitation. The lowered barriers to entry will now emerge a weakness
as Skype will not be able to track such user or limit such usage.
Security Issues: Skype has all types of users from all parts of the world. Many use Skype for the fraudulent transaction and underhand businesses. This creates various security issues for the genuine user who may be a target to such operations.
Limits brand loyalty: Today the market is filled with all kinds of messaging apps and the numbers have grown with smartphones. So getting loyal customers will pose to be a challenge for Skype.

Opportunities for the SWOT analysis of Skype :

Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include:

The increased popularity of smartphones: This not just improves the scope of operations but also the prospects in tyres of revenue for a messaging software.
The culture of telecommuting and remote working: A lot of businesses in the information technology sector encourage ether employees to work from home offices. This would increase their dependency on tools like Skype for formal interaction.
Integration with other Microsoft Tools: If Skype can be integrated to tools like X Box, Outlook, Kinect edit can open a whole new set of avenues for Skype to source business from.
Improved scalability: As the usage of smartphones and other technologies grow apps have started growing in popularity and distances have reduced. This creates an opportunity for companies like Skype to scale up their operations.

Threats in the SWOT analysis of Skype :

Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:

Competition: Skype faces a lot of competition today from both seasoned and new players. Some of its strongest competitors are Whatsapp, Viber, Tango and Talk free.
Technological advancements: Technology related to instant messaging is changing at an alarming rate with new updates coming up every day. To keep up with these changes can be a costly affair.
Restrictions: Many countries have imposed restrictions on usage of VoIP calling. Some include Dubai, Qatar, UAE, Korea and Libya. This can hamper growth prospects.
Security Issues: Instant messaging applications pose serious security threats to users starting from information pilferage to cyberbullying. There needs to be a strong protection feature in such platforms which can be costly.
Dependence on IT Infrastructure: The quality of service of an instant messaging tool depends primarily on the bandwidth and speed in that region. These may vary from place to place which in turn may create dissatisfaction.