Bill Gates Case Study

1. Microsoft earned 25% net income in 1991. How does a firm manage to earn such a high profit?

Bill Gates set the standard. Gates made both economic and business history from 1986 to 1991. His company Microsoft’s income statements grew from 197 million dollars to 1.843 million dollars, in just five years! Gates and Microsoft came up with two products to sell. One was the operating system; the other was the application software. The application software was the best seller. It took shelf space and it was also user friendly. Microsoft began introducing its most important office products. Microsoft Works, a combined program which featured typically word processor, spreadsheet, database and other office applications. Towards the end of 1986, Apple Mac. released their first application software. Microsoft Works would later be sold with other Microsoft products including Microsoft Word and Microsoft Bookshelf. In 1987 a reference collection introduced that was the company's first CD-ROM product. Later, on August 8, 1989, Microsoft would introduce its most successful office product, Microsoft Office. Microsoft office included Microsoft Word, Microsoft Excel, and Power Point. Obviously Bill Gates couldn’t make and sell these products by himself, so he had to hire well. He had to hire “nerds” that knew what they were doing, and could work in his environment. With his employees they made the operating systems and the application software. But why were they flying off of the shelves so fast? People needed it, and it worked. The firm couldn’t run on its own without a leader, it needed someone who was capable of handling the pressure. Bill Gates set very high expectations for himself, from the time he was playing farmer chess without a computer screen when he was 13 to Gates telling his teachers that he would be a millionaire by the time he was 30.