Question

 

Case Study

 

Microsoft in India

Microsoft made its name by building two monopolies, its Windows operating system and its Office suite of personal productivity software, that are used the world over. Windows, for example, runs on about 94 percent of the world’s personal computers. Despite its global dominance, however, Microsoft has found it difficult to get traction in many developing nations. India is a case in point. Although the country has a well-educated middle class, and although India is home to some of the world’s most successful information technology outsourcing companies, the vast majority of Indians do not have access to a personal computer. India has only 25 PCs per thousand people compared to 997 per thousand in the United States.

The main reason for this is cost! Most Indians are simply too poor to afford a PC. Also, Microsoft’s Windows franchise faces two major competitors in India: pirated versions of Windows, and the free open source product Linux, which can be found on many servers and also is making its way onto desktop PCs in India. 

Dealing with these issues has forced Microsoft to rethink its global strategy of one-size fits all. In many ways, India has become a test case for Microsoft’s efforts to customize its offerings to the realities of emerging markets. To help develop local offerings, Microsoft invested heavily in an Indian R&D center in Hyderabad, which today employs 1,500 people and is the company’s largest software development center outside the United States. To protect its Windows franchise against lower-cost competitors (pirates and Linux), Microsoft developed a special version of Windows, Windows XP Starter Edition. This sells for less than half the price of Windows XP, which is itself cheaper than its recent operating systems, Windows Vista and Windows 7. Windows XP Starter Edition has limited functionality—it can run only three programs at once and is not configured for computer networking—but the low price is more appealing in the Indian market. Starter Edition comes in 10 local Indian languages, plus Hindi and English, significantly broadening its appeal.

Instead of selling packaged software, which is too expensive for many small businesses, Microsoft is selling monthly online access to some of its other offerings, such as Office and SQL Server (Microsoft’s database product), for a low subscription fee. The programs are hosted on Microsoft servers. Not only does this strategy help Microsoft gain incremental sales that would not otherwise occur, bit it also is proving to be an effective response to pirates, who cannot offer a similar service. Ironically, this strategy may ultimately be one that is favored in developed markets, such as the United States, where competitors such as Google are already starting to gain traction with similar online offerings. Other innovative offerings in India include a product called multipoint, which allows users to attach several computer mice to a single machine. 

The product is for use in schools and was developed after Microsoft observed very few Indians schools had one PC per student, and that students often lined up three or four deep behind a machine. Microsoft is developing simple educational programs that multiple students can interact with at the same time by clicking on icons. For example, children can play a game where they hear a word and then compete to identify the text on the screen that matches the sound. More generally, Microsoft has observed that in India many people are using cell phones to perform basic functions that in other countries would be done using personal computers. The PC is still too expensive to be used by many small Indian businesses (20 people or less) that account for half of India’s manufacturing. Cell phones are cheaper, they are mobile, and they are easy to use. To address this market, Microsoft is experimenting with a number of approaches. The company has created text-messaging services for farmers and manufacturers, enabling them to check prices, inventory levels, orders, and so on via their cell phones. For example, in 2008 it rolled out a project in Tirupur, a textile manufacturing center, enabling small manufacturers with cell phones to track progress with orders over the Web via text messages. All the back-end server hardware and maintenance is outsourced to a local firm, while Microsoft charges users a monthly fee for the service. By pioneering locally customized services such as these, Microsoft hopes to grow its share of the Indian software market.

 

Case Discussion Questions 

  1. What steps did Microsoft have to take to develop products that are customized to Indian consumers? 
  2. How does Microsoft vary the marketing mix of its existing product offerings to gain traction with Indian customers? What else has Microsoft done to make headway in India? 
  3. What general lessons can be derived from Microsoft’s experience in India?

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Behavioral Economics/Experimental Economics

Related Economics Q&A

Find answers to questions asked by students like you.

Q: 60. In a perfectly competitive market, which of the following will increase the economic profit the ...

A: As the demand increases, the demand curve shifts towards right and will intersect the original suppl...

Q: Mary has two dinner options available: eating a home cooked meal for $150 permeal, or at a restauran...

A: Given,   Price of cooked meal at home = $150 per meal  Price of cooked meal at restaurant = $260 per...

Q: The use of quarterly data to develop the forecasting model Yt = a +bYt-1 is an example of which fore...

A: The forecasting refers to the prediction technique for a certain situation taking into consideration...

Q: 2.6 The Production Function and Emigration. During the potato famine, many workers left Ireland. Sho...

A: Click to see the answer

Q: For each monetary policy implemented by the central bank explain how each one will increase the econ...

A: Monetary policy: Money related arrangement is the macroeconomic strategy set somewhere around the na...

Q: In the market for running shoes, all the firms face a similar demand curve and have similar cost cur...

A: Answer - "Thank you for submitting the question but we are authorized to solve 3 sub- parts of the q...

Q: A 75,000-ton limestone quarry cost $2,000,000 to develop. Annual gross income for the quarry in year...

A: Given: A 75,000-ton limestone quarry cost- $2,000,000 The Annual gross income is estimated at at- $1...

Q: Explain the difference between TANF, the earned income tax credit, SNAP, and Medicaid.

A: TANF: It provides a fixed amount to the state for poor people. EITC: It works for the low-to-moderat...

Q: Given below is the Supply Schedule of Nestle Milk per liter: Price of Milk per liter (in Rs) 100 200...

A: We are given below the Supply Schedule of Nestle Milk per liter- Price of Milk per litre (in Rs)    ...

Q: (Ref 21-2 Table: Production Function for Soybeans) Use Table 21-2: Production Function for Soybeans....

A: Fixed cost is that part of the total cost which will not vary from the quantity. 

Q: 1) Large current account deficits imply large financial account surpluses. True Or False?Explain.

A: The current account deficit implies that the value of product and services a country imports exceeds...

Q: 31. Based on the above figure, for which of the following levels of output at Ike's Ice Cream Kitche...

A: Given the cost curves, the relationship between cost and product curves is that when  MC= AVC, Then ...

Q: Please copy paste. Solve on clean white paper. Explanation

A: Answer to the question is as follows :

Q: 24. When the marginal product curve is above the average product curve, ________ as output increases...

A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...

Q: 66. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’...

A: In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’s av...

Q: 2. A market analysis employed by the "Sad Student Company" reveals that the number of lots of the ga...

A: Total revenue: The total amount received by the company on the sale of a goods and services. TR = p ...

Q: Question 1 The M1 definition of the money supply includes all of the following EXCEPT Select one: a....

A: M1 is the most liquid form of money supply. This includes Currency in circulation, travellers checks...

Q: 2.7 Diminishing Returns? An economy increased employment first from 10,000 to 20,000 and then from 2...

A: Diminishing marginal returns occur we hold some input fixed​ and increase the amount of the variable...

Q: In 2020, the World Bank and International Monetary Fund (IMF) have been deeply apprehensive of gover...

A: Sovereign default refers to a situation where the government is unable to pay its debt back to a for...

Q: Demand for Orange Juice is given as Qd = 5000-2500 P + 1200 I +650E - 255 PS Suppose Income is I = R...

A: Since you have posted a question with multiple subparts, we will solve the first three subparts for ...

Q: problem, assume it is not possible to buy a fraction of a burrito, and always round down to the near...

A: The price of each burrito is $2. Therefore, to find the no. of burritos that can be bought with $700...

Q: Calculate the producers' surplus (in dollars) for the supply equation at the indicated unit price p....

A: Producer surplus(PS) refers to the difference between how much a seller(s) is willing to accept for ...

Q: QUESTION A Prepare a line graph comparing the unemployment rate for 2009 – 2018 between the Bahamas ...

A: Click to see the answer

Q: 1. How does fixed cost affect marginal cost? Why is this relationship important? 2. Is it possible f...

A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...

Q: Solve economic question

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the f...

Q: b. (i) Define the term money multiplier? (ii) Assume that Lucky Bank is required to hold a 10% depos...

A: Money multiplier tells you the maximum amount of commercial bank money that can be generated, given ...

Q: Economics Question

A: Given below is the table which gives the value of money at each price level of  Price level Val...

Q: Nimbus Ltd. makes brooms and then sells them door to door. Here is the relationship between the numb...

A: The cost table, a) Marginal product = Change in total product/ Change in the number of workers At L...

Q: Q4 Which of the following statements about the consumers’ responses to rising gasoline prices is cor...

A: Though gasoline is a necessity, in the long run there would be presence of substitutes, which would ...

Q: Ball Bearings Inc. faces costs of production as follows:Quantity Total Fixed cost Total Variable Cos...

A: In a competitive firm there are large number of firms producing identical products thus acting as pr...

Q: (b) A garment factory’s production function is provided in the table.The gross profit per unit (diff...

A: Given: To Find: If the wage rate is $1,000 a week, how many workers should the factory hire factor...

Q: An increase in the budget deficit is the result of: choose the correct answer(a) Expansionary moneta...

A: A budget deficit happens when government expenditure surpasses income and demonstrate the economic w...

Q: A consumer has income of $15,000. Masks costs $35 per mask, and sanitizers costs $70 per bottle.   ...

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for...

Q: Brit-Brick is a company that produces bricks and cement in the UK. Their largest consumer is ConstrU...

A: The utility function, U(x,y) = xb10y1-b10 If b = 8, the function is  U(x,y) = x810y1-810U(x,y) = x45...

Q: Let’s assume that a country in the Caribbean reports the following labour statistical data to its ci...

A: a) Unemployment rate = [Person unemployed / Total labor force]*100                                  ...

Q: The following information is provided about an open economy with a government. Use theinformation to...

A: Autonomous spending(A) = C'+ I ' + G' + NX' C' = autonomous consumption  I' = autonomous Investment ...

Q: In 2021 I bought 1/3 of ACO's Sushi House at BAM for 550,000TL. After 3 years I sold half of my shar...

A: Click to see the answer

Q: Empirical studies find that exchange rates are much more variable than inflation differentials. How ...

A: The exchange rate refers to the relative value of a currency in terms of other foreign currencies. T...