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Microsoft Company Case Study


Microsoft Corporation has been a monopoly in computer operating systems and software market for a long period of time. It has been accused of violating anti-trust laws and using noncompetitive practices to dominate the market. The current market share of Microsoft is large, thus, enabling it to remain a monopoly in the operating systems market for decades.

Research has revealed that Microsoft has a 93% market share despite a stiff competition from other technological firms. Competitors, such as Macintosh and Linux have competed with Microsoft for a long period. However, Microsoft has managed to control the largest portion of the market. The declining innovativeness and creativity of Microsoft might have adverse effects on its market share.

Microsoft behaves like a monopoly because there are a few innovative competitors in the market. It has used several strategies that other technology firms have failed to execute in order to control and maintain the large portion of its market share. First, it has developed strong relationships with other technological companies to maintain its dominance.

For example, it has collaborated with several video and audio streaming companies to extend its monopoly in providing multimedia content to its consumers. Secondly, Microsoft has invested in emerging technology companies to eradicate competition that these companies introduce in the market. This has ensured that technological innovations are in line with Microsoft’s plan for dominance.

Thirdly, Microsoft has collaborated with several learning institutions, which have helped retain its dominance in the desktop market. Monopolies usually result from perpetuation of uncompetitive practices by companies or firms that prevent other companies from penetrating the market.

It is difficult for other companies to acquire a sizeable market share under prevailing conditions because of entry barriers created by Microsoft. From a legal and economic perspective, Microsoft’s market share is large enough for it to behave like a monopoly.

Dead weight loss refers to loss of economic efficiency by a firm, company or organization that is caused by monopoly pricing, taxes or external factors. As such, Microsoft is a dead weight loss to its economy because of several reasons. First, monopolies usually incur great expenses because they spend a lot of money in order to maintain their monopoly in a specific market.

This increases the average total cost of producing a product or service. For example, Microsoft has spent a lot of money in legal battles to maintain their monopoly. Secondly, monopolies attract high taxes from the government. The more costly a product or service is, the higher the tax a firm or corporation pays for the product or service.

If Microsoft was not a monopoly, taxes would be lower because competition from other firms would result in cheaper products that would attract lower taxes. The prices of Microsoft’s products could be compared to a private tax that has the same dead weight loss that most government-imposed taxes bear.

With current advancements in technology, Microsoft is gradually losing its monopoly. Despite the fact that it earns high profits from its products, Microsoft has been stagnant over the last decade. It is unable to compete effectively in emerging markets, such as development of software for mobile devices due to lack of innovation.

Judge Thomas Penfield’s statement that Microsoft enjoys a monopoly is true and valid. Microsoft has a large market share of operating systems that are compatible with most personal computers. In addition, it has established barriers that hinder entry of other companies and has forced consumers to depend on its operating systems due to lack of alternatives.

The judge’s ruling validated the claim that Microsoft is a monopoly and controls a large market share. The judge was correct because Microsoft has used anticompetitive strategies in the past to maintain its monopoly. Microsoft integrated its web browser into its operating system in an effort to eliminate competition from other software companies, such as Netscape.

Today, it collaborates with other software companies, thus, leading to anti-competitive agreements that eliminate competition from those companies. The ruling of the judge is consistent with the findings of recent studies on the dominance of Microsoft. Microsoft’s monopoly has elicited debates because it has eliminated competition from other companies by using anticompetitive strategies.

In addition, its monopoly has harmed consumers because they have no option but to use Microsoft’s browser and other software integrated in their operating system. In addition, the monopoly has resulted in high prices that have also harmed consumers adversely. The conduct of Microsoft of using anticompetitive strategies was intended to suppress competition from companies that produced products that were a threat to its monopoly.

Defenders of Microsoft have always reiterated that current technological advancements have reduced Microsoft’s monopoly. However, they ignore the fact that the judge put such considerations in his ruling. For example, Linux introduced an operating system that failed to quell Microsoft’s dominance in the market. However, with the current trend in the software market, Microsoft’s monopoly may soon be eradicated.

Microsoft is no longer innovative as it was in the past decades. The emergence of modern computing necessitates innovation and creativity in order to meet its demands, which Microsoft has failed to do. New entrants into the software market, such as Google are gradually eliminating Microsoft’s dominance.

In addition, Microsoft has failed to keep up with the demands of modern age computing, such as the need for software for mobile devices. The development of the Android operating system has presented a blow to Microsoft. Android is open-source software that gives software developers permission in order to adapt it to their needs.

Operating systems that are developed by Linux and the Apple are gradually becoming more acceptable for users. Most companies have developed operating systems that perform better than Microsoft’s Internet Explorer does. For example, Google Chrome and Mozilla Firefox are some of the best web browsers. They have included features that have improved security and speed when surfing the internet.

Microsoft has not improved its browser for a long time, and that is one of the causes of its waning popularity among users. Microsoft’s waning dominance of the software and operating systems market is evident from its current struggles to develop applications that guarantee its monopoly in the market. In addition, the ruling by Judge Jackson was a great blow to Microsoft’s dominance.

Even though Microsoft currently controls a great portion of the market, its dominance is waning, and in a few years, it will not be a monopoly any longer. The creativity and innovation that are exhibited by emerging technology companies is enough proof that Microsoft will soon lose its dominance and consumers will have more options. Diversity is an important aspect of the operating systems market.

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IvyPanda. (2019, August 6). Microsoft Company. Retrieved from https://ivypanda.com/essays/microsoft-company-2/

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"Microsoft Company." IvyPanda, 6 Aug. 2019, ivypanda.com/essays/microsoft-company-2/.

1. IvyPanda. "Microsoft Company." August 6, 2019. https://ivypanda.com/essays/microsoft-company-2/.


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IvyPanda. "Microsoft Company." August 6, 2019. https://ivypanda.com/essays/microsoft-company-2/.

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IvyPanda. 2019. "Microsoft Company." August 6, 2019. https://ivypanda.com/essays/microsoft-company-2/.

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IvyPanda. (2019) 'Microsoft Company'. 6 August.

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