Competitive Advantage - Microsoft Case Essay Example for Free

Competitive Advantage Microsoft Case EssayWhen trying to spill the beans of MSs success, the titles of two books from Bill Gates slip into my mind. They are The Road forrader and Business the speed of thought, which I would translate into Direction and Speed and could be the reason for MSs success be good at setting strategy and adapting to the changes. However, to reframe them indoors the context of Modern Competitive Strategy, the reasons for MSs success are to create and maintain its modern COMPETITIVE ADVANTAGES. With the analysis of it competitive advantages, MSs profitability was more rely on its ability to DEFEND its market position rather than to create. To put it another way, the usage of MSs resources and capabilities can be better understood in light of separate mechanisms.On one hand, MS focus on increasing customer retention. Software is an experience good. It can be tell exactly from the name Windows XP where XP is nobble for experience. For an experience g ood, the search costs, training cost and learning cost are high, which in turn help to increase customer retention. Here is a innocent example. In 1998, Bill Gates gave his speech at Washington University and talk about piracy in China, and he said About 3 gazillion computers get sold every year in China, but people dont pay for the software.Someday they will, though. As long as they are going to divert it, we want them to steal ours. Theyll get sort of addicted, and then well somehow figure out how to collect sometime in the next decade. For the same reason, MS bundled Office Suite, expanded server platforms, and gave many stuffs/features for free like IE and Media Player. We can expect the adding to the list will grow on and on. Its broad electron orbit of merchandises and global presence also helped MS to increase customer retention.On the other hand, MS defend its market position fiercely. A typical tactical maneuver used by MS is the prohibitive development cost. For exam ple, it spent $2 billion alone in 2001 for its .net platform. When MS identifies a potential threat, it react with alone of it resources and capabilities to compete with. Through advance technology, enticement OEM manufactures, or even giving for free, it won battles over Office Suite, OS, Internet browser and media player.As a result, MS stands above its competitors and reaps its profit like printing money. For example, while application software price dropped by an average of 8.9% at 1989, MS could raise its OS price. go WordPerfect was priced at $79, MS charged $249 for upgrades of Office 2000.The challenges MS faced somehow derived from its own marketing activities. The antitrust litigation is a warning for its aggressive fall upon on its competitors. In general, Microsoft should keep focus on defending its market positions, using its resources and capabilities cautiously and smartly. Its isolation mechanisms could be enhanced by strategies like product development and acquis ition, platform integration, user and channel enticement, all happen at prohibitive cost.