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Microsoft Case Study

In: Business and Management

Submitted By villaloa
Words 411
Pages 2
Strategies Used by Microsoft to
Leverage its Monopoly Position in Operating Systems to
Internet Browser Markets
Case Summary

Microsoft is the world’s largest supplier of computer software. It has dominant market share of PC operating systems with its Windows system. High barriers to entry prevent significant competition in the operating systems market. The primary barrier is that a large number of software programs must be able to interface with any operating system to make it attractive to end users. It would be extremely difficult for any competitor to create a new operating system and create or encourage the creation of completely new software to compete with Windows. However, the development of Internet Browser programs, specifically Netscape, threatened this barrier, by allowing software developers to create software that could run using the browser software as a platform for the program. Therefore, software could be created that could still be used with Microsoft
Windows, but would not have to be.

Microsoft recognized this development as a threat to its operating system monopoly.
Initially Microsoft attempted to divide the market with Netscape, but Netscape refused.
To defend its operating system, it set about to overtake Netscape with its own internet browser, Internet Explorer. To defeat Netscape, Microsoft leveraged its operating system monopoly to gain market share in the internet browser market. Microsoft forced computer manufacturers to include Internet Explorer and strongly discouraged them from including competing browsers with the bundled software. It also leveraged its operating system power to encourage Online Service Providers (AOL, etc.), Internet Content
Providers, and Internet Service Providers to use Internet Explorer and discourage them from making competing browsers available. The actions by Microsoft were effective...

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