Microsoft in China and India, 1993–2007 It was early summer 2007. Craig Mundie, chief research and strategy officer at Microsoft
Corporation, had just completed a transcontinental phone call with Orlando Ayala, Will Poole, Tim
Chen, Ravi Venkatesan (HBS MBA 1992), and Ya-Qin Zhang, all members of the senior management team overseeing Microsoft’s growth in China and India. A decade ago, Mundie had begun to broaden
Microsoft’s forays into both countries. Now, he continued to mentor the China and India teams.
Mundie saw his role as one that mitigated ventures that others within Microsoft might find too risky to undertake and thus to try to fill “white spaces” in Microsoft’s offerings. Chen and Venkatesan headed Microsoft operations in
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Major Issues in China Until 1998, China represented only a minor sales subsidiary for Microsoft. The on-the-ground issues were quite lost to Redmond. Ayala, who along with Mundie was one of the first executives to visit China, would later say, “If you squinted and looked at it, China would look like the U.S. or
Europe or Japan. . . . Hey, there were judges, laws, etc., but in practice there was a lack of transparency, a lack of preparedness in dealing with business problems, and we had no way of recognizing it.” Product localization in China was one of the first complicated issues. The ideographic script used in the People’s Republic of China (PRC), referred to as the “simplified” Chinese character set, had over 7,000 commonly used characters originally created with brush and ink, while Taiwan and Hong
Kong used the “traditional” character set with 13,000 characters. Thus, products had to be localized separately for the PRC. China then had a piracy rate of 98%, the highest in the world. Almost the entire PC-installed base in the PRC had the mostly pirated English version of Microsoft DOS together with one of the many
Chinese shells. There were several regulatory, legal, and market-based initiatives to control piracy.
These included major raids and Microsoft’s signing of a licensing agreement with a company called
China Great Wall Company. There was also a memorandum of understanding
Microsoft has their dominance of the industry at stake. They could potentially come out on top if left to continue their current tactics. They are masterfully “marketing their products” and it is paying off for them (Love, 1997).
-The main function of the Microsoft is Endorsement on all offerings, Example like press conference, game studio, hardware, certified partner and executive circle
“Microsoft aspires to be a great company, and our success depends on you. It depends on people who innovate and are committed to growing our business responsibly. People who dedicate themselves to really satisfying customers, helping partners, and improving the communities in which we do business. People who are accountable for achieving big, bold goals with unwavering integrity. People who are leaders, who appreciate that to be truly great, we must continually strive to do better ourselves and help others improve.”
Microsoft has grown into an enormous and powerful corporation by a combination of aggressive business practices and having written operating systems (DOS and Windows) for personal computers. From operating systems it branched out into other software which has, along with the operating system, become something of an industry standard.
“All of these qualities were evident in Gates’s nimble response to the sudden public interest in the Internet. Beginning in 1995 and 1996, Gates feverishly refocused Microsoft on the development of consumer and enterprise software solutions for the Internet, developed the Windows CE operating system platform for networking non computer devices such as home televisions and personal digital assistants, created the Microsoft Network to compete with America Online and other Internet providers, and through Gates’s company Corbis, acquired the huge Bett mann photo archives and other collections for use in electronic distribution.
Microsoft's stated mission statement is "to help people and businesses throughout the world realize their full potential." Arguably, a statement this vague provides so little sense of mission that it lacks value. That is the point. Microsoft cannot even uphold its own mission internally, given the gap between the company's potential and the company's output. That the company has no coherent, tangible sense of its own mission is a contributing factor to that failure. Consider the company's resources. As Clarke (2010) notes, it is not for lack of ideas that Microsoft has failed to innovate. The company has great people, highly-talented, educated and experienced. It has $66 billion in cash on its balance sheet and another $10 billion in long-term investments (MSN Moneycentral, 2012). Clarke (2010) notes that the company spends $9 billion per year on research and development. The potential for innovation at Microsoft, then, is tremendous, yet its output is minimal.
“Microsoft’s share of the market for Intel-compatible PC operating systems is extremely large and stable,” 2. “Microsoft’s dominant market share is protected by a high barrier of entry,” 3. “Microsoft’s
Microsoft's struggles might seem somewhat perplexing, given its stunning success with Windows and the fact that it seems to have pursued a 'related linked' diversification strategy of primarily concentrating on products 'linked' to technology. It has not acquired businesses that are fundamentally anathema to its core product. "Companies' implements related diversification strategies in order to achieve and
Just over a few decades with Steve Ballmer, Microsoft has a new corporate leader at the helm. As Satya Nadella takes over the position that Mr. Ballmer once endured, his spirit took off with great confidence concerning his new role at the company (Microsoft, 2014). The next decade is likely to reveal the level of success his abilities bring to the future of the company and his own status as leader.
The patterns I see with Microsoft’s reactions to competition is that they rely heavily on the fact that they are leaders in the field of operating systems and they use this monopoly as leverage on what they give out to their consumers with their “bundling capabilities” (Rivkin 4). In the past I believe they have been successful against competitors even though they have gotten into legal trouble while doing it. This is because even after the law suits they still remained ahead of the pack in market shares.
This essay will utilise the following structure. It will commence by providing the reader with a brief history about Microsoft and then go onto explaining what corporate strategy is. Following this will be Microsoft’s diversification strategy in parallel with the reasons why they choose to diversify. Within this section the author plans to explore Microsoft’s related diversification approach, their corporate rationale, alongside why skill transferring is essential to them sustaining a competitive advantage and also how they achieved
Microsoft Corporation is a public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions. Established on April 4, 1975 to develop
Mr. Gates’ also explains how Microsoft tackled the challenge of integrating the Internet to be compatible with various Microsoft products. The biggest dilemmas were determining what should be incorporated into the existing Microsoft products, what should be packaged as new products, and how should the Windows Operating System support the Internet. He gives frequent examples of how the other competing computer industry giants were able to succeed in the computer industry. A lot of success he points out was made through trial and error as well as learning from one’s mistakes. He talks about how Microsoft has learned from projects that have failed such as the Multiplan spreadsheet that went on to be developed into Microsoft Excel, and the Omega database that would become Microsoft Access. One suggestion that Mr. Gates makes in achieving company success is by
Another challenge is that despite the ability to manufacture products cheaper in China, there is a flip side to this situation and that is that sometimes, that “made in America” sign on the back of a product could mean more than the few dollars more it costs to buy that product. Some Americans, in their spirit of patriotism, care more about supporting the American economy than saving a little bit here and there buying products that were manufactured outside of the United States. Balancing the stigma sometimes associated with making a product in a foreign country with the lower costs that usually comes along with that is important in doing business in China as well.
All started when Bill Gate and Paul Allen, two friends that as early as 13 years old started to mess around with computers, drop out of college to create their own business. This business founded April 4, 1975 is known today as Microsoft Corporation. Allen and Gates created a basic interpreter for computers, that was rejected by Digital Research, but later on IBM made a contract with them. The creation of the MS-DOS for IBM in mid-80’s gave Microsoft the high rock success that still last till this day, making them the dominant operating system for personal computers. Likewise, Microsoft became at a later time the leading business in office suite software better known as Microsoft Office.