Wednesday, September 07, 2005

Microsoft compared to walmart

Walmart has been critized by many persons because they offer low pay to workers and for questionable work place practices (e.g. using illegal imigrants), but overall, Walmart's basic business strategy seems to be to gain competitive advantage by offering good products at a low price. This strategy obviously gives the consumer some benefit.

Microsoft used to also have as a business strategy offering a good enough product at a low price (i.e. early versions of DOS, Word, Excel, Windows) and they did very well in the market place. By the mid 90's it became evident that Microsoft had developed a business strategy of embrace, extend, extinguish as part of a more generral plan of eleminate competition and reduce consumer choice. Office products began using p[roprietary file formats, the operating system had undocumented api's, products such as internet explorer were offered for free to, in part, cut off competitor's income, public protocols were 'extended' with proprietary extentions (i.e. HTML extentions and Java extentions) to make them non-interoperable. Efforts to restict entry of competitors into the market place (such as prohibiting the inclusion of non microsoft procudts in the installed system) became common. These practices have been very sucessfull, but I do not think they have been, on a long term basis, to the consumer's benefit.

The sad aspect to all this is that there has not been a consumer revolt and walmart gets more critized than microsoft.