The Microsoft Case

In: Business and Management

Submitted By andaiulia
Words 513
Pages 3
The Microsoft Case

Microsoft was being investigated for antitrust behavior because the company was suspect of violating the Sherman Act and obtaining monopoly power in the PC market. By doing this accusation the court had established that Microsoft Windows system was used on over 80% of the PCs that were Intel-based. To have such a higher percentage the pure monopoly was created by controlling the entire market of the product. This situation had been occurred because the firm had the patent of the product and the exclusive license to sell it. Windows was created to be an individual system of operation, and by integrated it with internet explorer, it created high barriers of entry into the PC market, by blocking their competitors Netscape to become a platform that will compete with Windows. Microsoft was also accused of anticompetitive practices by limitation the use of other companies’ products in their system of operation that were on the market. The Court also took in consideration if Microsoft acted like a monopolist. Microsoft argued that its behavior proves that it didn't act like a monopolist, but the Appellate Court disagreed. "Tellingly, the District Court found that some aspects of Microsoft's behavior are hard to explain unless Windows is a monopoly product," the decision reads. "For example, the company set the price of Windows without considering rivals' prices, something a firm without a monopoly would be unable to do." The ruling cited more examples, but the end result is that the Appellate Court ruled that Microsoft does indeed own a monopoly. The District Court also found that Microsoft's "predatory conduct" was put in place to ensure that the company would attain monopolistic power in a second market—Web browsers. Also the company making the price for their products produced a monopoly pricing in the market and without competitors their economic…...

Similar Documents

The Microsoft Case

...The Microsoft Case Microsoft was investigated for antitrust behavior after a U.S. court of appeals upheld a lower court’s finding that Microsoft used a series of illegal actions to maintain its monopoly in Intel-compatible PC operating systems (95 percent market share). (McConnell, 2012). US District Judge Thomas Penfield Jackson against Microsoft Corporation is a major blow to the largest US software company. Jackson upheld virtually all the contentions of the antitrust division of the Department of Justice, which brought suit against Microsoft for anti-competitive and predatory practices. Judge Jackson's finding of fact is unequivocal about Microsoft's crude and deliberate efforts to use its monopoly position in PC operating systems to gain control over other areas of the lucrative software industry, especially those related to the Internet and e-commerce. As the Wall Street Journal noted in its news report, "the judge came away convinced that the software company has behaved more like a thug in its dealings with competitors and customers." (McLaughlin, 2011). I do agree that Microsoft was trying to gain monopoly power in the computer software industry. Evidence that supports this are supported by the following facts: 1) During that time, Microsoft developed an entire range of products under the Microsoft Office that would cater to the various requirements of professionals in every field - Microsoft Excel, Microsoft Word, Internet Explorer, Windows Media Player...

Words: 870 - Pages: 4

Case 2 Microsoft

...CASE 2 - Microsoft’s Partnership with UNHCR – Pro Bono Publico? 1. Is partnership the answer and can the company leverage all its assets to contribute pro bono publico? By supporting the UNHCR, Microsoft engaged in a strategic partnership that is beyond satisfying shareholder expectations. The partnership with the UNHCR agency was not created to fulfill any financial gains. The concept was a long-term investment with promising outcomes for all stakeholders: Microsoft is supporting people in need with expertise and knowledge, helping through employee’s volunteer work, without direct return on investment. Microsoft has tremendous resources - tangible resources (capital and technology) and intangible resources (employees’ knowledge and management skills). Microsoft realized that its valuable resources can result in capabilities to reach social aspects, therefore creating value for all of its stakeholders (Deresky, 2011). Investing the company’s assets (human capital) in welfare projects contribute to social responsibility and provides its stakeholders with long-term benefits. To contribute to pro bono publico a company needs to find and develop partnerships with which to help them carry out whatever good they are trying to accomplish in the world. The world is shrinking due to the globalization that is going on currently with the Internet shrinking the time it takes to get things done, but I do not believe that there is any company large enough to take on the...

Words: 1451 - Pages: 6

Microsoft Case Study

...1. In this case yes partnership was the answer. Microsoft was not always as focused on corporate citizenship as it is today. They had a negative imagine of being an unstoppable power buying up everything in their path. So when the Kosovo crisis came to be 1999 Microsoft stood to not only offer help to thousands of suffering people, but to also improve the company’s imagine. These partnerships succeed in doing just that. When both partners stand to gain for the partnership, as they do in this case, then the partnership is the way to go. UNHCR gained all the assistance in helping the refugees, and Microsoft gained a favorable public image. The company can leverage all its assets pro bono publico. Microsoft did in this partnership. They offered cash and software to UNHCR, also the time and expertise of employees, the management skills of executives and online marketing strategy. 2. I would say that Microsoft is creating the right partnerships when it comes to expanding their market and raising opportunities. Years before Microsoft’s partnership with UNHCR, citizens pictured Microsoft as a company that walked all over other companies because they had so much money and power. This created a bad image for them and I feel they needed to make a move to recreate their image. Helping out refugees showed that Microsoft as a company had good intentions and was there for struggling people. Not only did this raise opportunities for Microsoft with all of their new successful...

Words: 531 - Pages: 3

The Microsoft Case

...The Microsoft Case Microsoft was being investigated for antitrust behavior because the company was suspect of violating the Sherman Act and obtaining monopoly power in the PC market. By doing this accusation the court had established that Microsoft Windows system was used on over 80% of the PCs that were Intel-based. To have such a higher percentage the pure monopoly was created by controlling the entire market of the product. This situation had been occurred because the firm had the patent of the product and the exclusive license to sell it. Windows was created to be an individual system of operation, and by integrated it with internet explorer, it created high barriers of entry into the PC market, by blocking their competitors Netscape to become a platform that will compete with Windows. Microsoft was also accused of anticompetitive practices by limitation the use of other companies’ products in their system of operation that were on the market. The Court also took in consideration if Microsoft acted like a monopolist. Microsoft argued that its behavior proves that it didn't act like a monopolist, but the Appellate Court disagreed. "Tellingly, the District Court found that some aspects of Microsoft's behavior are hard to explain unless Windows is a monopoly product," the decision reads. "For example, the company set the price of Windows without considering rivals' prices, something a firm without a monopoly would be unable to do." The ruling cited more examples, but...

Words: 513 - Pages: 3

Microsoft-Intuit Synergy Case Report

...Microsoft/Intuit Synergies There is a great deal of synergy between the Microsoft and Intuit that would be beneficial for Microsoft if an acquisition were to take place. Intuit’s position in the personal finance market would lend a considerable benefit to Microsoft given their difficulty in that market. Microsoft would also be able to take advantage of the similarity in their products and use their considerable marketing advantages to enhance the revenue created by Intuit. In 1994, Bill Gates envisioned an emerging future market as an online marketplace to handle consumer needs. In order for Microsoft to develop its capability to control its own destiny in online entertainment and commerce, it needed to acquire additional core competencies of “cable and/or telephone networks, on-line networks, electronic shopping networks, video on demand, and business networks.” Microsoft needed to evaluate what competencies would be developed in house and which would be acquired in an effort to most efficiently use its human resources and financial assets. With Gate’s vision of the future online consumer, Intuit’s product line could be a great benefit to Microsoft being able to position them as a leader in that market. In terms of market share in the personal finance/checkbook software market, Intuit had a 69% share in units and an 85% share in value. This is in comparison to a 22% and 7% share for Microsoft respectively. Bill Gate’s vision of the future relies heavily on personal...

Words: 744 - Pages: 3

Microsoft Case

... its revenue recognition while it was in particularly happy times, it would benefit from this revenue deferred in time to smooth its results in case lower results should occur. This enables Microsoft to spread a very strong message among their investors, since they then prove that even hard times would not affect them that much. Then, recognizing software development costs as they occur (instead of capitalizing them) and delaying revenue recognition lower its EBIT, and consequently lower the tax amounts Microsoft has to pay. Finally, lessening its results as Microsoft is doing may be a human management choice. Indeed, it enables it to maintain its managers under a certain a level of pressure, whereas if they announced their results with less conservative, Microsoft’s managers could fell in the trap of taking their company’s success for granted. This manipulation of their results worried the SEC, who feared that their financial statements would not represent the economic reality of the company anymore, but would have a single goal instead: to please the financial markets and meet their requirements and expectations. ...

Words: 710 - Pages: 3

Microsoft/Intuit Case Study

...Microsoft/Intuit Case Study Team 7 Garric Zhang Ling Liao Eric Wang 1. What factors have contributed to Microsoft’s large cash hoard?   | 1985 | 1986 | 1987 | 1988 | 1989 | Cash and Marketable Securities | 18.9 | 102.7 | 132.5 | 183.2 | 300.8 | Stockholders' Equity | 54.5 | 139.3 | 239.1 | 375.5 | 561.7 | Net Profit | 24.1 | 39.3 | 71.8 | 123.9 | 170.5 | ROE | 44.22% | 28.21% | 30.03% | 33.00% | 30.35% | New Cash and Marketable Securities | 2.8 | 4.1 | 9.3 | 18.6 | 25.2 | New Stockholders' Equity | 38.4 | 40.7 | 115.9 | 210.9 | 286.1 | New Net Profit | 23.5 | 37.4 | 67.5 | 118 | 157.7 | ROE (after adjusted) | 61.20% | 91.89% | 58.24% | 55.95% | 55.12% | Increased ratio | 38.39% | 225.71% | 93.94% | 69.57% | 81.59% |   | 1990 | 1991 | 1992 | 1993 | 1994 | Cash and Marketable Securities | 449 | 686 | 1345 | 2290 | 3614 | Stockholders' Equity | 919 | 1351 | 2193 | 3242 | 4450 | Net Profit | 279 | 463 | 708 | 953 | 1146 | ROE | 30.36% | 34.27% | 32.28% | 29.40% | 25.75% | New Cash and Marketable Securities | 39 | 57 | 78 | 91 | 105 | New Stockholders' Equity | 509 | 722 | 926 | 1043 | 941 | New Net Profit | 256 | 434 | 669 | 897 | 1077 | ROE (after adjusted) | 50.29% | 60.11% | 72.25% | 86.00% | 114.45% | Increased ratio | 65.67% | 75.40% | 123.78% | 192.57% | 344.43% | From the case, we can know that Microsoft outsold its nearest competitor several time to be the most profitable large public corporation in the world...

Words: 1432 - Pages: 6

Nokia-Microsoft Case Study

...The Nokia-Microsoft analysis has benefited from Microsoft software expertise. Microsoft has its name and brand well established in the cell phone industry. Nokia as well is a global player in this industry. Nokia was the largest manufacture of cell phones in to 2012. Both companies needed a partner that complemented them in the areas they lacked expertise. Nokia has been interested in introducing Windows software to their phones therefore this seemed like a logical alliance to make. But with this alliance strengths also come weakness, opportunities and threats. A weakness in regards to this alliance would have to be Nokia losing market share. The cell phone industry is in a constant growth and with Apple’s iPhone growing not only in the U.S. but globally, alliances as such is a way to stay in a competitive position in the market. Nokia technology is aging and this is a weakness to the alliance. Although they have already launched phones with the Windows software they are still lacking the updated technology. According to the New York Times article “One year later, Nokia and Microsoft deliver” the alliance planned seemed to work even though Nokia continues to loose share. The opportunity they have is that to expand globally as Nokia has an established global market. Google’s Android and Apple’s iPhone continue to be a threat in the cell phone industry. They continue to expand and to expand to global markets. The constant change in consumer wants and needs in the cell phone...

Words: 542 - Pages: 3

Microsoft

... scenario where a computer is not only secured for its owner, but also secured against its owner as well. On April 3, 2000, a judgment was handed down in the case of United States v. Microsoft, calling the company an "abusive monopoly"; it settled with the U.S. Department of Justice in 2004. On October 25, 2001, Microsoft released Windows XP, unifying the mainstream and NT lines under the NT codebase. The company released the Xbox later that year, entering the game console market dominated by Sony and Nintendo. In March 2004 the European Union brought antitrust legal action against the company, citing it abused its dominance with the Windows OS, resulting in a judgment of €497 million ($613 million) and to produce new versions of Windows XP without Windows Media Player, Windows XP Home Edition N and Windows XP Professional N. 2.5 Management style of Gates From Microsoft's founding in 1975 until 2006, Gates had primary responsibility for the company's product strategy. He aggressively broadened the company's range of products, and wherever Microsoft achieved a dominant position he vigorously defended it. He gained a reputation for being distant to others; as early as 1981 an industry executive complained in public that "Gates is notorious for not being reachable by phone and for not returning phone calls." Another executive recalled that after he showed Gates a game and defeated him 35 of 37 times, when they met again a month later Gates "won or tied every game. He had......

Words: 7316 - Pages: 30

Microsoft Case Analysis

...Microsoft Displays The objective of this marketing research study is to investigate whether the displays of Neolux Corporation are as effective as they claim. This study will determine whether or not the displays are capable of increasing sales. This study will also determine if the displays are appealing for retailers as well as consumers. This study will show conclusive evidence of the displays sales capability. The study will show conclusive evidence of appeal to retailers. * Market Research steps Marketing Research Steps: 1. Establish the need for marketing research: * Determine whether or not the displays are capable of increasing sales. * Determine if the displays will be appealing for retailers as well as consumers 2. Define the research problem: * Conduct the required research to determine the sales capability of the displays * Microsoft needs to assess the amount of appeal the displays provide for consumers * Microsoft needs to assess the amount of appeal the displays provide for retailers 3. Establish research objectives: * Determine who would purchase a Segway and what they would pay for a Segway from regular consumers, workers, and industrial venues through various forms of media. These forms of media include telephone interviews, email, and direct response questionnaires. 4. Determine the research design: Descriptive * Identify which retailers find the display appealing * Among the identified retailers select...

Words: 364 - Pages: 2

Microsoft Case Study

...Summary: Microsoft is an American corporation that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions. Microsoft success in the computer software industry depends on employees who possess extraordinary problem solving abilities and it believes that these abilities can be measured during interviews in which applicants deal with puzzles, riddles, and insolvable questions. Microsoft realizes that its interview practices likely result in missing out on some well qualified candidates but they believe that its much worse to make a mistake of hiring someone who shouldn’t have been (a false positive) than to mistakenly pass over someone who should have been selected ( a false negative). This idea is based on the idea that it is harder to get rid of someone after they are hired and its harder for the company to thrive if too many of their employees cant solve problems under stressful circumstances. Questions: 10.1- Which abilities are measured by the specific question that Microsoft interviewing process? - The cognitive ability and the reasoning ability can measure the specific questions in the Microsoft interviewing process. Cognitive ability- refers to capabilities related to the acquisition and application of knowledge in problem solving. Cognitive abilities are relevant in the jobs that work involves the use of information to make decisions and solve problems...

Words: 533 - Pages: 3

Microsoft Case

...MGMT 550 : Innovation Management Preparatory Assignment Case Study 2 1. As Steve Ballmer, you are faced with managing consumer perceptions of Windows 7 in the wake of the public relations failure of Vista. In devising the advertising campaign, what would the ad message focus on during the launch of Windows 7? Consider the following questions as you formulate an answer. Should special consideration be given to restoring negative perceptions of the Microsoft brand? Should marketing focus on the features and qualities of Windows 7, or address its improvements over Vista and it's superiority to a Mac OS in the advertising campaign? Should Microsoft highlight Windows 7's new features or its usability? 2. In terms of pricing, should Microsoft vary the price for those upgrading their current operating system from XP or Vista versus those purchasing the operating system on a brand new computer? 1. As it is described in the case, Microsoft was facing major difficulties in the wake of the launch of Windows 7. The main problem was that the previous Operating System, Windows Vista, was a commercial and critical failure, causing Microsoft to constantly losing Market shares. Microsoft had to understand what made Vista such a failure in order to recover from the previous debacle. One of the main mistakes made by Microsoft was thinking that innovation (numerous new features such as highly-hyped Aero) brought by the new system would easily outweigh the potential losses XP system. Only...

Words: 1106 - Pages: 5

Microsoft Case

...Teaching Notes: 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...

Words: 1216 - Pages: 5

Microsoft Case Study

...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...

Words: 411 - Pages: 2

Microsoft Case Study

...Microsoft Monopoly Ali Faisal alifaisal83@hotmail.com Devry University Content Introduction…………………………………………………………………………...page 2 Case Trail and Allegations ........………….………………….………………………… page 2-4 Conclusion………………………………………………………………………....... page 4 References………………………………………………………………………....... page 4 Introduction Microsoft is of the largest organization in terms of making software's for small, medium and large businesses and for end users as well. Microsoft made such well know software's like MS-office, windows Xp, vista and win-7 and some hardware such as mice, keyboards, etc. there are also varieties of Server operating systems, programming software's like Visual basic and Dot.net offered by Microsoft that are implemented all over the world. Microsoft was being investigated first by the Federal trade commission for various Anti-trust allegations during 1991 till 1994. Unfortunately, Federal trade commission(FTC) were failed to win the case against Microsoft. Allegations on Microsoft There are number of allegations on Microsoft, that the company is trying to gain all market share, trying to create monopoly in the software industry, restricting consumers and vendors to use Microsoft...

Words: 818 - Pages: 4