Microsoft in Europe-the Real Stakes
Microsoft Corporation, a global firm whose history dates back to 1975 had been undertaking its business operations with the European Commission on unveiling the controversial protocols regarding server communications for nearly three years. Disputes that arose were with reference to how much the corporation ought to share and the ratio of their financial strengths in form of success that the giant firm was willing to keep. In addition, there was a focus on the impressive strategy focused on vertical and horizontal integration of acquisitions, which paved way for the construction of a portfolio, which assisted the company to inter-link nucleus competencies. However, according to the year 2008-detailed financial report, there is evidence that enough research on the government regulations and cultural differences were inefficient thus resulting in large fines and penalties (Business Week, 2007).
On Sept. 17, 2008, Luxembourg-based Court of First Instance, which is Europe’s second-highest court, passed down a ruling on Microsoft’s official scuffle with Europe’s competition regulator that possibly decided the prospect of anti-trust policy in the technology segment together with the commercial and legal strategy of the United States software war. This judgment was because of Microsoft’s speed strategy campaign that paved way for assembly of products with faults such as Xbox, Windows Vista and other software with viruses. If the European Commission succeeded in its appeal, Microsoft could face a future in which governments around the world would scrutinize its product design decisions and licensing policies before allowing them to engage in business (Business Week, 2007).
The question of fundamental importance in Europe and beyond emerges because yet another grievance against the giant software company got a filing in the previous year with the European Commission. The complainants who included a group representing rivals of the firm such as IBM, Oracle, and Nokia squabbled that the new Vista version of Windows and Office 2007, were intimidating the unbolt nature of the internet. In addition, the new case argued that Microsoft was on the verge of extending its supremacy into areas outside the designated spheres of influence (Business Week, 2007).
Appraising the peripheral analysis would comprise forces that have an effect on the remote, industry and operating background. Therefore, in regards to the remote industry, it is worth noting that the current global anti-trust court case process and ruling undoubtedly affected the cost-effective, political, and societal factors of the firm’s business paths. The far-reaching allusions of Microsoft’s loss would lead to decisive observance of the imminent effects this ruling will have. It is worth noting that Microsoft faces new threats that it must worry about. These new competitors may rise following the new global ruling by the European Union. Further observations have it that the company had already generated market monopoly hence a negative ruling would mean that consumers would quite probably have a louder voice in having options (Business Week, 2007).
The moment that governmental rules and their consequences on Microsoft start being, there is a possible opportunity that substitute goods would surface and take over the market. The main proposal to dealing with this loss is through Microsoft carrying out a strong aggressive analysis on the possible ways of maintaining consumer loyalty and evaluating the operating environment. One can learn that top financial analysts seek methods of making organizations inventive and capitalist since these are the basic means of increasing growth capabilities and image relevance. Nevertheless, Microsoft’s strategic management team should be devoted to its mission, vision, and value statement as well as their internal aims and the external atmosphere in case the ruling went against their wish.
Researchers argue that the more competitive the second market is, the lower the price of commodities and the higher the profit maximizing will in the first market. Therefore, this means that environmental forces would compel Microsoft to make a review in the pricelist for its products in order to maintain some customers. However, this is dependent on various pre-conditions regarding the quality of the products and the level of image prestige that a company holds to the populace.
Microsoft would find it rather profitable to become the central figure in the second market because it has already created a commanding demand for its customers and thus built consumer loyalty. This would also give the company the management over a market that is of strategic significance for the potential development of the software industry as well as being a cartel for expansion of its services to other spheres of influence. Based on the ruling, an assertion made argued that by creation and maintenance of dominance in the server operating system bazaar, barriers of entry would erect thus preserving the monopoly enjoyed by windows in the personal computers operating system market (Business Week, 2007).
In conclusion, Microsoft is a company that has an impressive approach in place, which accommodates its operating environment. However, the financial report for year 2008 indicated that many of the operational divisions that include marketing, expansion, and payroll among others recorded boost due to the quantity of innovation. It is worth noting that the Commission’s main worry was about the various dynamic impacts of reduced competition in the inter-related market and not pricing. Lastly, the advice would be to keep an eye on outsourcing of these operation segments that are appropriate and those that do not affect the European economy adversely (Business week, 2007).
Business Week (Monday, 17 September 2007). Microsoft in Europe: The Real Stakes
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