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    Microsoft's market dominance

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    1. Is Microsoft a monopoly? Is the electric power industry in California an oligopoly? Explain your reasoning for each.

    2. Is it Microsoft's faults that they have all the wonderful technical people that can develop these systems?

    Second set of questions is international business

    1. Please explain why international strategy is important. What is the difference between domestic and international strategic planning?

    2. Are there any locations that would benefit from new products more than other countries?

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    Solution Preview

    Economic Theory
    1. There are two sides you should consider in answering this question. First, does Microsoft fit within the definition of a monopoly?

    According to AmosWEB (http://www.amosweb.com), a monopoly is "a market structure characterized by a single seller of a unique product with no close substitutes." In this sense, Microsoft is not technically a monopoly. There are several "close substitutes" in most of its product areas, including operating systems (where Windows faces competition from Apple's Mac OS X, and various UNIX/Linux-like competitors), there are close substitutes to Microsoft products are available.

    That said, because of Microsoft's market dominance (roughly 90% of PCs run Microsoft operating systems), it has many characteristics of a monopoly: it is a price maker, and t has an unusual amount of control over its suppliers and competitors. Additionally, because Microsoft also makes many of the products the typical users runs on his or her computer, it has been found to have undue control over those ...

    Solution Summary

    Microsoft's market dominance is assessed.

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