Essay about Microsoft Case Study

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1. What are the three or four most important drivers of Microsoft’s business model over the past 10 to 15 years that have accounted for the company’s spectacular results?
Microsoft’s mission of placing a “PC running Microsoft software on every desk and in every home” drove their overall strategy early on. Depending on the business segment within Microsoft, one would see in place very different business models as the strategy for each line of business could vary. In the operating system (OS) segment, Microsoft initially brought in an existing product and modified this (MS-DOS) to work with the Intel microprocessor, which were the “brains” of the IBM PC. Microsoft partnered with IBM to provide the operating system for the IBM PC. In
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The example provided in the reading mentioned the various sales channels (i.e., computer companies, retail channels, and internet) used by this segment in contrast to the OS segment which largely fell to hardware OEM sales. The strategy used by Microsoft here came as a result of evaluating other competitors and learning of high switching costs to change software and of the cost involved in developing software programs. With this information, Microsoft could develop a strategy in order to achieve the objective of the mission statement mentioned earlier. The tactics used to execute their strategy for the application software segment including bundling a suite of applications at a discounted price and a competitive upgrades program (incentives offered to users of competitors’ product). A mistake that was costly to competitors in this area is that they failed to develop software for the Windows program, while Microsoft continued to develop software for the Microsoft OS. Many competitors here also “abandoned” Macintosh development, which in the long run helped Microsoft advance their standing in the marketplace.
An overall business model for Microsoft is that the OS they designed became the foundation for many other applications. With competitors such as Lotus and WordPerfect not reaching out to collaborate with the Microsoft platform, they lost their place as the market leader in providing spreadsheet and word processing software. Excel and Word from
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