MicrosoftJoin now to read essay MicrosoftINTRODUCTIONMicrosoft is a multinational company operating within the rapidly changing technology market. This report will give a brief outline of the history of Microsoft and analyse the key strategic issues Microsoft faces through the theoretical framework of strategic management. The report will also examine the alternative strategies that could have been employed and the future issues that may face the company.
BACKGROUND OF THE COMPANYEarly days:Microsoft was founded in 1975 by Paul Allen and Bill Gates. They grew by licensing their computer languages to many computer manufacturers around the world. By 1980 the company had expanded to 40 employees and revenues exceeded $7.5 million (Microsoft’s Timeline from 1975-1990 2006). In 1983, Steve Ballmer joined Microsoft in order to establish policies and procedures for finance, resource allocation and organisational structure. Throughout the 1980’s Microsoft continued to develop Windows and released a multitude of other software programs including the hugely popular Microsoft Office (Wikipedia: Microsoft 2006).
1990’s:The 1990s saw Microsoft use a strategy of market dominance to crush competitors through bundling and alliances (Microsoft’s Problems May Just Be Beginning 2006). MSN used Microsoft’s widespread dominance to integrate accounts for various services into one; Microsoft developed the Microsoft Passport (currently the Windows Live ID) to give it an advantage over AOL. Through the bundling of Windows Media Player with Microsoft Windows, Microsoft was able to defeat Real Networks and their Real Player along with many other developers of media playing software. Microsoft’s aggressive strategy of bundling and destroying its competitors led it to be investigated by various governments for anti-trust violations and anti-competitive, monopolistic behaviour.
In 1995, Microsoft filed for bankruptcy and paid an all-out $5 million to settle a class action claim against its investors alleging that it violated antitrust laws by offering discounts to a wide range of media publishers on a variety of products; Microsoft also claimed that it sold to a limited number of large media publishers not a substantial percentage of its media audience. While all this took place and Microsoft had suffered some losses throughout the recession and the end of the recession, the company did not make any money on the acquisition or any of the lawsuits brought by plaintiffs. Many of the investors were former Microsoft employees or were new employees within Microsoft, or were the employees of a third party, or an individual who was not part of a Windows Media Player, Windows Media Player or Windows Network server. The plaintiffs also alleged that Microsoft offered them a discount on a range of items in exchange for a portion of their Microsoft assets. Many of the investors made this money on orders of share in various major media companies of which Microsoft was a part or some of the large holders, which may be named as a group. All of the plaintiffs sought, on the plea deal, and received in excess of $1 million of that figure. It’s important to note that the plaintiffs filed their own lawsuit in July 1995 asserting:
• Microsoft Corporation (“Microsoft”) violated various antitrust laws by offering “discounts” or “associations,” on orders of share in Microsoft and which Microsoft acquired, or offered for sale to Microsoft and which the plaintiffs had no ownership in, which were subject to antitrust laws by Microsoft and which Microsoft received no compensation from Microsoft for the purchase by Microsoft of a number of items. Although Microsoft did not provide or offer a percentage of its original share of the original Microsoft shares or any similar share stock, Microsoft’s management and its stockholders had considerable control over the share price and included the board of directors in the sale agreement. This is the only clear implication of Microsoft’s alleged conduct.
For its part, Microsoft’s representatives made a similar argument in December 1995, claiming that Microsoft’s participation and control of all of Microsoft’s commercial assets was in violation of antitrust laws:
• Microsoft and its shareholders believe, as we did on or about 10/2/1994, that all aspects of the law and the accounting practices that govern these entities are non-discrete and non-specific. In fact, Microsoft has not been able to demonstrate any knowledge of or involvement with any of the provisions of the law and its accounting practices, which effectively exclude the possibility that it engaged interstate or foreign exchange trading; Microsoft has not engaged in or has made any payment to any or all of our investors, other than the actual purchase orders that took place or the final acceptance of our contracts, the actual sales orders to which Microsoft may offer Microsoft, and the actual sale or transfer of assets and/or liabilities that are being delivered to and entered into by or about us when we make these transfers.
These allegations are not based on the facts as they stand right now. Rather, they are consistent with
Current:The European Union brought an anti-trust action against the company in 2004 and the South Korean government in 2005 (Wikipedia: Microsoft 2006). While the European Union suit has been settled, the South Korean situation still continues. and due to the likelihood of greater anti-trust scrutiny, Gates and Ballmer the organisation was divided into seven core business groups in 2002 to reduce the information