Competitive Advantage †Microsoft Case Essay

When act to spill the beans of MSs success, the titles of deuce books from line Gates slip into my mind. They ar The Road Ahead and Business the locomote of thought, which I would translate into bearing and Speed and could be the reason for MSs success be veracious at setting strategy and adapting to the changes. However, to reframe them inwardly the context of Modern Competitive Strategy, the reasons for MSs success ar to occasion and maintain its modern COMPETITIVE ADVANTAGES.With the analysis of it competitive advantages, MSs profitableness was more rely on its king to DEFEND its market position quite than to create. To put it another way, the usage of MSs resources and capabilities green goddess be separate understood in light of separate mechanisms.On one hand, MS centralise on increasing customer retention. software product is an incur good. It can be verbalise exactly from the name Windows XP where XP is short for experience. For an experience good, the search costs, training cost and schooling cost are high, which in cultivate help to addition customer retention. here(predicate) is a classic example. In 1998, Bill Gates gave his speech at uppercase University and talk about piracy in China, and he said About 3 million computers get sold all year in China, but raft dont pay for the software.someday they will, though. As long as they are going to detach it, we want them to steal ours. Theyll get sort of addicted, and then well someways figure out how to collect former(prenominal) in the next decade. For the same reason, MS bundled Office Suite, expanded server platforms, and gave many a(prenominal) stuffs/features for free homogeneous IE and Media Player. We can expect the adding to the list will drive on and on. Its broad scope of products and worldwide presence also helped MS to increase customer retention.On the other hand, MS defend its market position fiercely. A typical tactic used by MS is the prohibitive develop ment cost. For example, it washed-out $2 billion alone in 2001 for its .net platform. When MS identifies a potential threat, it contradict with all of it resources and capabilities to compete with. Through cost increase technology, enticement OEM manufactures, or even handsome for free, it won battles over Office Suite, OS, lucre browser and media player.As a result, MS stands above its competitors and reaps its profit like feeling money. For example, while application software wrong dropped by an average of 8.9% at 1989, MS could raise its OS price. While WordPerfect was priced at $79, MS charged $249 for upgrades of Office 2000.The challenges MS faced somehow derived from its own market activities. The antitrust litigation is a inform for its aggressive assault on its competitors. In general, Microsoft should keep focus on argue its market positions, using its resources and capabilities cautiously and smartly. Its closing off mechanisms could be enhanced by strategies li ke product development and acquisition, platform integration, user and channel enticement, all happen at prohibitive cost.