The case of Microsoft Corporation is analyzed in terms of the microeconomic thinking and the relevant market structure. The analysis has revealed that the operations of the Microsoft Corporation are such that it enjoys a monopolistic position in the market with 80-90 percent of the market share of computing and operating system related products and services in the world. The elasticity of demand and its relationship in the monopolistic market for Microsoft is reviewed along with the initiates taken by the government to regulate and intervene in the market with where Microsoft Corporation has a monopolistic role.
The company itself is a multinational organization and therefore operates in numerous countries around the world selling and distributing its products to their markets. The traditional pricing strategy employed by the company until recently has been the global pricing approach whereby all the markets are charges the same price. However in the future the company is considering incorporate differentiated pricing strategy according to the different regional market it caters to. The company over the years has been involved in discriminatory pricing activities based on the customer segment and the elasticity of demand for of the target customers.
Conclusively the report provides recommendations and strategies for efficient operations, better positioning and differentiation the products and employing differentiation in an effective manner to increase benefits for the customers as well as the company.
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