I have selected 2 problems I would like to discuss. They are, constantly ongoing legal suits and declining productivity. Constant legal suits can be a problem because a lot of money goes to legal fees and possibly settlements later on. Also this creates doubt about your company and investing in it. Stock prices tend to be affected by these thing. Declining productivity is an obvious indicator that you're not doing the right things in order to keep competing in you industry.
Microsoft is a company that always has legal problems. Whether its patent infringements or anti-trust violations, you are never surprised when you open a newspaper and see this company in court. Declining productivity is also an issue. Microsoft competes in the Application Software industry. They have the largest market capitalization rate in this industry. Behind them are, Oracle, SAP AG, and Adobe Systems. I took the last quarter revenue and divided it by the amount of employees in all of these companies and Microsoft actually came up last. I think that if they want to stay in first place, they should try to avoid all the legal suits that they encounted and maybe motivate their employees to be more efficient so they wouldn't need as many or so they would be more productive and increase sales.
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4 comments:
Hello,
I am not very involved with the lawsuits that Microsoft has been facing but I understand the point that you are trying to make.
You are right, I think that these kind of issues not only bring along extra cost for the company but also little by little sets a bad position or appearance in people's mind and as we saw in the ample list of symptoms this is one of them. It can be very dangerous for the company and as I can see from the blogger, many people are now pointing the "black dots" of Microsoft.
Well, lawsuits will definitely damage the image of a company but then as a customer I would still purchase its software since we have no choice and personally I would not care much about a company lawsuit as long as it doesn't affect me.
I liked the fact that you picked constantly ongoing law suits as an indicator that a company faces strategic problems. As I was doing research on a company that we are going to make a presentation on, I ve indicated too many law suits as an external threat for the company, deteriorating its image and customer loyalty.
Personally, I dont care about ongoing law suits that a company faces as long as I am satisfied with the product unless it is something that really harms environment or deceives a customer.
Lenny,
Legal suits are a bad thing but sometimes I could understand why companies will go so far to push a smaller company to sue them. In case of Microsoft, well they are a bully and there is good product out in the market they want it just so the new software company doesn't grow big enough to challenge Microsoft. Even though it does hurt their image they will still take on the law suit just to make it harder for the other company to grow. Plus they repair their image by giving away free computer labs to schools and colleges at times.
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