...Creating Competition in the Market for Operating Systems: A Structural Remedy for Microsoft Thomas M. Lenard, Ph.D. Vice President for Research The Progress & Freedom Foundation January 2000 ©Copyright 2000, The Progress & Freedom Foundation. All rights reserved. TABLE OF CONTENTS EXECUTIVE SUMMARY iii I. INTRODUCTION 1 II. MICROSOFT’S OPERATING SYSTEM MONOPOLY 3 III. NEW MARKET DEVELOPMENTS 5 A. America Online/Netscape Merger 5 B. America Online/ Time Warner Merger 6 C. Linux 6 D. Information Appliances 6 E. Web-Based Computing 7 IV. ANTICOMPETITIVE ACTS: THE NETSCAPE BROWSER 8 A. Market Division Proposal 9 B. Exclusive Arrangements with Original Equipment Manufacturers (OEMs) 9 C. Exclusive Arrangements with Internet Access Providers (IAPs) 10 V. OTHER ANTICOMPETITIVE ACTS 12 A. Java 12 B. Intel 12 C. IBM 13 VI. HARM TO CONSUMERS 14 VII. ALTERNATIVE REMEDIES 16 A. Conduct Remedies 16 B. Structural Remedies 17 1. Functional Divestiture 18 2. Full Division Remedy 19 3. One-Time Licensing Auction 21 VIII. The Hybrid Structural Remedy 22 A. The Minimum Scope of the Windows Company 23 B. The Applications Company 24 C. Addition of Products into the Windows Companies 25 D. Other Operational Issues 26 1. Shareholders 26 2. Intellectual Property 27 3. Employees 27 4. Contracts 28 ...
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...The Microsoft Antitrust Case* by Nicholas Economides** Revised April 2, 2001 Abstract This paper analyzes the law and economics of United States v. Microsoft, a landmark case of antitrust intervention in network industries. The United States Department of Justice and 19 States sued Microsoft alleging (i) that it monopolized the market for operating systems of personal computers and took anti-competitive actions to illegally maintain its monopoly; (ii) that it attempted to monopolize the market for Internet browsers because such browsers would create competition for operating systems; (iii) that it bundled its browser (Internet Explorer) with Windows; and that it engaged in a number of other anti-competitive exclusionary arrangements with computer manufacturers, Internet service providers, and content providers attempting to thwart the distribution of Netscape’s browser. The District Court Judge found in most points for the plaintiffs and ordered the breakup of Microsoft into two companies, one with all the operating systems software, and one with all other products of the company. The District Court also imposed a number of severe restrictions on the business conduct of Microsoft. We analyze the economic issues related to liability. We also analyze the applicability and effectiveness of the remedies imposed by the District Court and contrast them with other potential remedies. * Forthcoming in Journal of Industry, Competition and Trade: From Theory to Policy (August 2001)...
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...Case Analysis Research in Motion: Managing Explosive Growth Introduction Since its humble beginnings in 1984, Research in Motion has come a long way. By 2008, with a market capitalization of close to 70 billion, it was poised to become one of the largest companies in Canada and the stage was set for it to become a near monopoly in world mobile communications market. RIM’s product – Blackberry had taken the world by storm (pun intended, since Blackberry Storm is one of RIM’s most profitable product), and the word “crackberry” had become synonymous with the workaholic professional. Yet, as the mobile telephony market for professionals started showing promise, RIM found itself besieged numerous competitors all over the world. RIM had a distinct first mover advantage in the market and was well known for its ultra-secure enterprise software. However, this advantage was rapidly eroding in the face of high R&D investments from RIM’s largest competitors such as Nokia, Apple, and Microsoft. This was problematic as it foreshadowed the question of whether or not RIM was well positioned to continue to meet expectations, deliver award-winning products and services and maintain its lead in the smartphone market. Oftentimes, Wall Street expectations for technology driven companies were also linked to the technology spend and RIM was clearly not ahead of the game in terms of this metric. Just to maintain status quo, it was clear to RIM’s CTO, Mr. David Yach, that he would need to...
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...G0961866Q | Date | 10 Jan 2013 | 1. Exective summary This case study discusses the business strategies used by Apple, Microsoft and Google in internet industry。Everyone know the Internet has developed into an enormous information infrastructure. This new economy is driven by a relentless force of technological and conceptual innovations stemming from an innumerable number of parties scattered around the globe. Its speed of change and innovation make it to a highly competitive arena. Apple, Microsoft and Google have been the most successful companies within this arena for a long time. Throughout the previous decades, they have internalized the economic laws and technological characteristics of the Internet in their business thinking. Their strategies and competitive moves did not only form the information economy as we know it today, but do also provide showcase examples of how profitable market positions can be achieved in the Internet. Table of content Introduction My report answers some questions: How did Apple, Microsoft and Google successfully navigate and define the competitive arena of the Internet? Which roles did their unique strengths play for their business strategies? Which specifics of the Internet did they have to account for? Last, how to used 4Ps sustain their competitive advantages within such a hostile environment? Development strateies of Apple, Microsoft and Google Apple was founded in 1976 by Steve Jobs and Steve...
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...------------------------------------------------- Monopoly From Wikipedia, the free encyclopedia This article is about the economic term. For the board game, see Monopoly (game). For other uses, seeMonopoly (disambiguation). "I Like a Little Competition"—J. P. Morgan by Art Young. Cartoon relating to the answer J. P. Morgan gave when asked whether he disliked competition at the Pujo Committee.[1] A monopoly (from Greek monos μόνος (alone or single) + polein πωλεῖν (to sell)) exists when a specific person or enterprise is the only supplier of a particular commodity (this contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly which consists of a few entities dominating an industry).[2]Monopolies are thus characterized by a lack of economic competition to produce the good or service and a lack of viable substitute goods.[3] The verb "monopolise" refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge high prices.[4] Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry (or market).[4] A monopoly is distinguished from a monopsony, in which there is only one buyer of a product or service; a monopoly may also have monopsony control...
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...Environmental Analysis The information technology (IT) industry has always been highly driven by innovations in technology. It is dynamic and highly competitive, with frequent changes in both technologies and business models. Each industry shift is an opportunity to conceive new products, new technologies, or new ideas that can further transform the industry and businesses. The following PESTEL analysis will try to gain an understanding of Microsoft’s business potential, future market situation and the direction of its operation. The political, economic, social, technological, environmental and legal factors are six components of PESTEL analysis. Table 1: PESTEL Analysis of IT industry | Political * Restrictions on foreign recruitments * Regulations to education * Regulations to the industry * Regulations at emerging markets | Economic * Fluctuations and unpredictable behaviours of foreign currency * Trade cycles * Economic growth rates (around the world) * Disposable income level of people * Demand and supply...
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...If you wanted to get rich, how would you do it? I think your best bet would be to start or join a startup. That's been a reliable way to get rich for hundreds of years. The word "startup" dates from the 1960s, but what happens in one is very similar to the venture-backed trading voyages of the Middle Ages. Startups usually involve technology, so much so that the phrase "high-tech startup" is almost redundant. A startup is a small company that takes on a hard technical problem. Lots of people get rich knowing nothing more than that. You don't have to know physics to be a good pitcher. But I think it could give you an edge to understand the underlying principles. Why do startups have to be small? Will a startup inevitably stop being a startup as it grows larger? And why do they so often work on developing new technology? Why are there so many startups selling new drugs or computer software, and none selling corn oil or laundry detergent? The Proposition Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast. Here is a brief sketch of the economic proposition. If you're a good hacker in your mid twenties, you can get a job paying about $80,000 per year. So on average such a hacker must be able to do at least $80,000 worth of work per year...
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...ICTs As Enablers of Development: A Microsoft White Paper December 2004 Executive Summary Information and communications technologies (ICTs) are transforming societies and fueling the growth of the global economy. Yet despite the broad potential of ICTs, their benefits have not been spread evenly. Indeed, using ICTs effectively to foster social inclusion and economic growth is among the key challenges facing policymakers today. As one of the world’s leading ICT firms, Microsoft brings a unique perspective to this issue, one informed by years of collaboration with the international development community. Microsoft firmly believes that ICTs hold tremendous promise as an enabler of social and economic development. ICTs can help underserved populations obtain, manage and disseminate knowledge and to tap into global networks of information and services. And rapid innovations in technology – the fruits of intensive R&D efforts by Microsoft and others – are making ICTs less expensive and easier to use, bringing the power of ICTs within the reach of ever more people. ICTs promote development across many dimensions. At their most fundamental level, ICTs enable organizations to be more productive, thereby spurring economic growth and helping firms be more competitive. ICTs can also expand the reach and effectiveness of social development projects and have already yielded important benefits in such areas as healthcare, education, and environmental preservation. Public-sector...
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...The Art of Standards Wars Carl Shapiro Hal R. Varian S tandards wars—battles for market dominance hetween incompatible technologies—are a fixture of the information age. Based on our study of historical standards wars, we have identified several generic strategies, along with a number of winning tactics, to help companies fighting today's—and tomorrow's—battles. There is no doubt about the significance of standards battles in today's economy. Public attention is currently focused on the Browser War between Microsoft and Netscape (oops, America On-Line). Even as Judge Jackson evaluates the legality of Microsoft's tactics in the Browser War, the Audio and Video Streaming Battle is heating up between Microsoft and RealNetworks over software to deliver audio and video over the Internet. The 56k Modem War of 1997 pitted 3Com against Rockwell and Lucent. Microsoft's Word and Excel have vanquished WordPerfect and Lotus 1-2-3 respectively. Most everyone remembers the Video-Cassette Recorder Duel of the 1980s, in which Matsushita's VHS format triumphed over Sony's Betamax format. However, few recall how Philips's digital compact cassette and Sony's minidisk format both flopped in the early 1990s. This year, it's DVD versus Divx in the battle to replace both VCRs and CDs. Virtually every high-tech company has some role to play in these battles, perhaps as a primary combatant, more likely as a member of a coalition or Prepared for the Cnlifornia Management Review.Jh'is material...
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...market efficiency. A firm or firms may exercise market power for a significant period of time only if barriers to new entry exist. Thus in determining whether or not a proposed merger is against the public interest, or whether a firm (or firms) is abusing monopoly or market power in antitrust cases, analysis of entry conditions is of primary importance. One might therefore expect to see rather extensive and sophisticated analyses of entry conditions, or barriers to entry, in monopoly and merger cases that come before competition authorities in the United States, United Kingdom, or member states of the European Union (EU). One might also expect that competition authorities would have placed a great deal of emphasis and effort on achieving a coherent and consistent framework for the analysis of entry barriers in a manner that makes use of the latest thinking on the subject by industrial organization economists. However, until very recently no competition authority that we are aware of has attempted to formulate a coherent and detailed framework for the analysis of barriers to entry, despite the significant degree of effort that has been put into clarifying the related problems of market definition and the measurement of monopoly or market power. While clear and fairly precise statements and indeed, guidelines or procedures on these issues have come from the courts or government authorities charged with the implementation of competition policy, the approach to dealing with questions...
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...Strategic Management Apple & Nokia Case Analysis 1. Table of Contents 1.0 EXECUTIVE SUMMARY OF APPLE AND NOKIA CASE 2 2.0 QUESTION 1 3 2.1 Competitive analysis of Apple and Nokia – who is stronger? 3 2.1.1 Competitive Analysis 3 2.1.1.1 SWOT Analysis 5 1.1.1 Strengths of Apple 6 2.1.1.2 Value Chain Analysis 9 2.1.1.3 Resourced Base View Tool 11 3.0 QUESTION 2 14 3.1 PESTEL analysis tool 15 3.2 Porter’s Five Forces 17 3.3 The Implications for Strategic Development are; 21 4.0 QUESTION 3 21 4.1 Critical Analysis Lessons from Apple’s risky but profitable strategy 21 5.0 REFERENCE: 23 1.0 EXECUTIVE SUMMARY OF APPLE AND NOKIA CASE Apple chalked some initial success with its invention of the Macintosh (Mac) computer but with the introduction of the Windows 1.0 from its rival company (Microsoft), it was faced with a threat in the industry. Their earlier strategic decision of not cooperating with rivals in the industry was seen as a weakness which Microsoft capitalized on to make their software available to other computer manufacturers for a license fee. Apple, diversifying into a new market (mobile telephone industry) with the introduction of user friendly products sought industry cooperation when it came to the launch of subsequent products including the iPod and iPhone. This strategic decision was inspired by its past...
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...CEO announces merger with Compaq. This is the one of the most notable days in HP history and as well as PC industry. It was called Largest merger in the PC industry and dumbest deal of the decade. When analyzing this merger after 13 year picture is changed. HP share price has raised more than 150% after merger. Carly Fiorina is not CEO and HP is still one of the most profitable companies in the world. HP is one of the famous companies found in Pao Alto in the garage. It was founded in 1938 in the year when PC industry wasn’t existing, when Steve jobs and Bill Gates weren’t even born. It is the company from which PC industry giants like Apple and Microsoft inherited corporate culture. Bill and Dave were graduates of the electrical engineering program of Stanford University. They decided to start business on drawing on Bill’s study of negative feedback. So there first product became the resistance capacitance audio oscillator, used to test sound equipment. First client was Walt Disney which used HP product in his animated movie Fantasy. From the day of founding HP was distinguished from other tech companies by it’s corporate culture. They called it HP way. Even Steve Wozniak founder of Apple praises HP corporate culture and says that the Apple seed was planted in Hewlett-Packard cubicle. It was philosophy which emphasized integrity, respect for individuals, teamwork, innovation and contribution to customers. HP grow from garage to world's one of the most valuable company...
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...Dynasty whose literal meaning is “hundreds of times”, signifies a persistent search for the ideal[i]. In January 2000, Baidu was founded by Chinese entrepreneur Robin Li (Li) and Eric Xu (Xu) where it conducts its operations in China providing a Chinese Internet search platform through Baidu Online and Baidu Netcom. These companies hold the required licensing and approvals to operate the Company’s websites and advertising services.[ii] Within a few years, Baidu expanded its operations and established three PRC subsidiaries and two other PRC consolidated entities. By January 2008, Baidu launched a Japanese search service with three subsidiaries. To date, Baidu has been the most popular search engine in China and has succeeded in areas where Microsoft and Yahoo have failed: Beating Google at its own game by dominating the search engine market in 2007 with 60.4% market share.[iii] The paper aims to (1) perform an internal analysis on Baidu, to identify the competencies of Baidu; (2) perform an external analysis of Baidu to identify opportunities and threats; and (3) identify business strategies by Baidu and (4) recommend strategic actions to Baidu to compete better in future. INTERNAL BUSINESS FUNDAMENTAL ANALYSIS Organisation Structure and Human Resource Management. Baidu organisation structure works on a functional departmentalisation where the Chief Executive Officer (CEO) is aided by Chief Engineer, Chief Finance Officer (CFO) and 7 Vice Presidents spanning across Finance...
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...Chapter 1: Introduction Background of The Study MBA curriculum is highly focused on mixture of theoretical and practical studies. As part of the MBA course it is essential that the student submits a comprehensive study during the Internship period and prepare and present a study report. As part of that the study topic was decided in consultation of the supervisor as “Performance Analysis of Grameenphone for The Year 2009”. Under the scope of the topic a comprehensive study was done on Grameenphone which is presented in this paper. Statement of the problem: The major objective of a business firm is to increase the wealth of its shareholders. Financials of a firm is the mirror of the ultimate performance of a firm besides its brand preference and some other indices. Even the other indices are used to assure the profitability in both short and long term. The study dealt with the financial indices to indentify the strength, weakness and opportunity for the company and tried to recommend some improvement scope from the theoretical perspective. This study aims to see the performance of Grameenphone for 2009 in various indices. Objective of the study: Telecom is the most discussed industry in Bangladesh due to its nature of touching people’s life. Grameenphone Limited is the distinct market leader with more than 43% subscriber market share. In 2009 the company came into the pick of the discussion of local business environment as it went for the IPO which was the largest in the...
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...GURU NANAK KHALSA COLLEGE OF ARTS, SCIENCE & COMMERCE APPLE INC. APPLE INC. formerly Apple Computer, Inc., is a multinational corporation that creates consumer electronics, computer software, and commercial servers Under the supervision of: Sameer Velankar Index Serial No. Particulars Page No. 1. Introduction 2. History 3 Management Board Steve Jobs 4. Apple Products 5. Apple’s comeback 6. Small Solutions & Alternatives 7. i Products 8. Acquisitions 9. SWOT Analysis 10. SWOT Analysis Conclusion & Recommendation 11. Strategic Management the Steve Jobs Way 12. PORTER’S Five Forces 13. Microsoft, Apple & Google 14. Fundamental Analysis 15. Financial History 16. Graph Analysis 17. Case Study: Apple’s lawsuit on Samsung, what happened? 18. The components of the lawsuit 19. Bibliography Apple Computer, Inc. The idea fell from a tree, literally. Steve Jobs had returned from visiting a commune like place in Oregon located in an apple or hard. Apple co-founder and jobs pals, Steve Wozniak ,picked him up from the airport. On the drive home, Jobs simply said “ I came up with a name for our company- Apple”. Wozniak said they could have tried to come up with more technical sounding names but their vision was to make computers approachable. Apple fits perfectly. INTRODUCTION APPLE INC.. , formerly Apple Computer, Inc., is a multinational corporation...
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