Question

Based on the closing case on "Emerging markets: Microsoft's evolving China strategy." Why does Microsoft feel threatened by Linus in China and Globally? Explain from an industry-based view. The case is called "emerging markets: Microsoft's evolving China Strategy"

Answer 1

An industry is a collection of firms operating on the same level and so one business may adversely or favourably affect the other business within the industry.Microsoft's operational problem in China was always prevalent and a change in strategy in China may mean a complete change over of the strategy of the world .So Microsoft is threatened as China supports Linux and that adversely affects Microsoft.Microsoft's market share will get small when China supports linux as its market share will increase.When there is free entry into the industry industrial rivalry increases and profits becomes less and so when new firms are not allowed to enter,the industry is in a favorable position.Thus from the time China started supporting Linux, it remained a threat to Microsoft.

The public infrastructure for a software industry that was made around Linus also appeared to be a threat to Microsoft.Linux was able to go ahead in comparison to Microsoft as it was able to provide at a cheap rate because of its infrastructure which made it cost effective.People will thus go for cheaper products rather than expensive products and that proved to be the key factor of Microsoft being threatened by Linux. .

Again the government promoted Linus operations and so Microsoft found it difficult to enter the Chinese market.The Chinese customers preferred cheaper software like Linux instead of Microsoft.