The purpose of this paper is to understand the how the network effects of Microsoft’s products contributed to its rise and dominance in the market. In order to answer this question, the following points should be explained and analyzed. First of all, the environment of network industries in which Microsoft operates must be discussed. Moreover, such terms as “critical mass” and the way it is generated; “tipping points” and their impact on the products’ future, etc. should be described. Furthermore, the strategies and tactics, which are used by Microsoft to keep its positions in the market, should be outlined.
The reminder of this ...
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...uct (Economides, 1998). Also, Microsoft bundled Internet Explorer to its operating system, aiming to create a similar installed base for IE so that it would create an entry barrier to rival browsers. They moved the entry of competitors. More over, it is important to mention that a “firm like Netscape has less incentive to develop and write software applications if Microsoft can develop its own version of these software applications and bundle them with Windows” (Clements, 2002, 13).
The technical development of the Ethernet technologies also helped Microsoft. According to the With Paper, several millions were invested in intra-net networks, into servers, working networks etc. That made Microsoft first company whose products were able to operate in huge networks. This in turn, attracted large organizations and government institutions to Microsoft’s product.
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