International Trade Case Study

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ELECTRONIC BUSINESS (BEB3014) CHAPTER3: CASE STUDY CASE STUDY: Microsoft and the People’s Republic of China Software piracy has been a major challenge for software makers such as Microsoft that want to sell software in the global marketplace. Laws that protect intellectual property vary from country to country, and the laws in many countries provide little or no protection. Governments in developing countries are reluctant to increase the protections afforded by their intellectual property laws because they see no point in passing laws that protect the profits of foreign corporations by imposing higher costs on their struggling local businesses and citizens. In the late 1990s, after years of holding firm on its global pricing,…show more content…
Juliet Wu, former general manager of Microsoft China, published a book in 2000 that was highly critical of the company. The book was widely read in the PRC and received many good reviews. PRC officials have often criticized Microsoft for many things ranging from high prices to the company’s use of Taiwanese programmers (the PRC does not officially recognize Taiwan as an independent nation separate from the PRC). Government officials in the PRC are also concerned about security. Microsoft has always maintained that the code to its software products is a trade secret and has refused to allow its publication or distribution. Companies that develop software that runs on Microsoft Windows, for example, must sign a nondisclosure agreement with Microsoft to obtain information they need about how Windows operates so they can make their software compatible with it. Many PRC officials believe that Microsoft, as a U.S.-based company, might include secret code in its software that would allow the U.S. government to enter PRC government computers undetected in a time of international conflict or war. At a very basic level, the ideology of the PRC’s socialist government is a polar opposite to the highly competitive capitalist principles that have driven Microsoft to success. But the greatest challenge that Microsoft must overcome in the PRC is the attraction of open-source software. Open-source programs’ code is
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