High turnover. Small companies tend to have a small structure, then job opportunities are few, which force employees to change job. Poor customer service. Distributors mostly only care about selling off a product, then they direct customers with Microsoft. The main problem is that Microsoft Customer service is focused on developed countries, where the needs and tools are greatly different. In some cases the technical service is non-existent, heavily hurting the image of the company, not the distributor.
Poor input for further developing products. If all the deployment and input is being done and received by a distributor, then it is most likely that the information will never reach Microsoft’s engineering department. Without that knowledge products will stall for that particular market in a short period of time, inflicting loses in the long run for the company. 2. Are there countries where Microsoft’s strategy might not work? Why? Small countries with an unique language possibly are the toughest.
Microsoft strategy mean that while local partners are relied to market the products, Microsoft is still in charge of the code and language. In that regard Microsoft is very vulnerable to small IT companies that develop solutions for their language. With small partners, it is easy for local developers to attract those distribution channels for their own product, therefore using Microsoft’s resources and know-how to make profit out of other products, making Microsoft lose money. 3. What other kinds of businesses might find Microsoft’s strategy to be effective?
Please explain. Car manufacturers. They basically operate the same scheme with distributors. When a car’s manufacturer enter a new country most times they give the concession to sell the cars to a local person or company. Almost entirely those distributors operate in a very small area. The manufacturer covers Marketing and promotion, while the distributor has to develop their sales only in their area. 4. How might Microsoft need to change its strategy once it has established a strong position in a foreign market? They need to deploy a strong services net.
They need to be in constant contact with customers in order to assure that they meet their current and future needs. They need to deploy training facilities for their products in order to have a strong pool of expertise from where enterprises can nurture in order to keep fidelity with the products. They need to partner with high profile local companies to develop solutions in order to gain traction in the country. 5. Describe how host governments might react to Microsoft’s entry strategy? Governments usually react in a good way.
The way Microsoft do business benefit host countries a lot, since it creates a lot of jobs for the locals. Nonetheless there might be some countries who could think that Microsoft is a danger for their local IT industry. In those cases their strategy also soften their position a lot, since the entry in indirect. Reference Glusing, J. (2006, June 1). The third world goes high-tech: The dirt road to the information superhighway. Spiegel. Retrieved from http://www. spiegel. de/international/spiegel/the-third-world-goes-high-tech-the-dirt-road-to-the-information-superhighway-a-419034. html