Strategies Used by Microsoft, Case Study Example

What is the primary barrier to entry in the operating systems market? How does Netscape’s product threaten to remove this barrier?

 The primary barrier to entry in the operating systems market focused around the significant competition in the Microsoft space. This however was made extremely difficult for other software programs that needed to interface with any specific operating system. It would be virtually impossible for a competitor to create a new operating system. Microsoft took full advantage of this with its Windows Operating system. It was the emergence of Internet Browser systems, in particular that of Netscape, that threatened Microsoft by allowing the software providers to develop software that could run under the browser platform. As such software did not have to cater specifically for the Microsoft Windows operating system and provided a new option for consumers.

What is Microsoft’s pricing and distribution strategy for Internet Explorer? How does this compare to Netscape? Why would Microsoft pursue this pricing strategy?

Microsoft realized that Netscape was threatening the monopoly position on the Windows Operating system and counter measured with a revised pricing and distribution strategy. This primarily being to issue its own browser ‘ Internet Explorer’, this leveraging upon the wide distribution channels from the Windows operating system and as such forcing other Hardware manufacturers to include Internet Explorer as part of the software bundle being offered with the sale of their computers. In addition, they leveraged off the internet service providers like that of AOL to offer a more competitive pricing strategy using Explorer.

Is the internet browser software market a separate relevant product market from the operating system market?

The Internet Browser market is a distinct market from that of computer operating systems market. However, there are linkages and major players like Microsoft can leverage off the strengths of the Operating Systems like Windows in order to promote other software applications like Internet Explorer (IE). Microsoft however recognize that they have considerable leverage with the Computer Manufacturers when it comes to bundling hardware with software applications. This enabled the Executive team at Microsoft to take a strategic stance in dissuading the Computer Manufacturers from using competitors and moving away from the Microsoft suite of software products.

How does control of the start-up sequence and desktop screen allow Microsoft to leverage internet providers to use Internet Explorer? How effective was this strategy?

By Microsoft Windows having control of the operating system and as such that of the start-up sequence and desktop function of the computer, they could set the default browser to that of Internet Explorer and ensure that this was integrated into both the operating system and other supporting software applications like that of MS Office. This proved to be a very effective strategy particularly with the Hardware manufacturers that were bundling Microsoft software applications with the sale of computers. This was very effective in removing market share away from Netscape and establishing Explorer as the dominant search engine in the market place.

What are some of the ways in which Microsoft’s actions adversely effect competition and innovation? Does this show evidence of harm to consumers?

Microsoft has been criticized for having an adverse effect on its competition in terms of stifling innovation and competition. This concept was best played out in the Office Suite Market with that of MS Office versus other players like Coral, Borland, Lotus Corporation (IBM). By adopting a standard of software integration between its software products and restricting compatibility with other products, it enabled Microsoft to retain dominance of the software market. Equally, Microsoft focused in getting its products as the established ‘standards’ in the Corporate business world and this made selection of alternate products more difficult. Equally Microsoft continued its integration amongst other products like Visio and MS Project. In more recent years the concept of controlling licensing, software updates, renewals and support through the Microsoft internet sites has further increased the dependency upon the single source supplier of software i.e. Microsoft.

Certain Corporations like Apple have been successful in forging their own identity but overall Microsoft has managed to retain a relatively monopolistic position in the market place.