An organisation’s business model is and is consisted in the essence of its existence. In the globalised environment of a market economy, it is fundamental that management leads the organisation in defining and designing an approach to the future that is tailored to and complements the organisation’s profile, exploring creative possibilities that can leverage organisational uniqueness and ensuring alignment of “strategic intent” and “strategic mission” to keep stakeholders interested and realise business bottom-line.
This paper will attempt to highlight the findings of some points of common ground between Microsoft and Red Hat, and show where and how they differ in their respective business strategies. In addition, this paper will attempt to offer insights into the crafting of business strategy by Microsoft and by Red Hat, in order to create for their respective firms what Thompson, Strickland, & Gamble (2010) speak of as “sustainable competitive advantage” en route to realising the business ‘bottom-line.’
Business Strategies: Microsoft and Red Hat
Finding commonalities within the business models of two or more firms within the same industry whose business philosophies diverge at almost polarisation is possible, but not simple, due to the subjective intent that gave rise to the respective business philosophies in the first place. Osterwalder, Pigneur, & Tucci (2005) suggests that finding common ground in this context is possible, but it is so only if “things… are understood in the same way.” Based on the business models of Microsoft and Red Hat, outlined by Thompson, Strickland, & Gamble (2010) the latter company, which is younger and smaller, takes a divergent business model approach to the former company, which is older and larger, presumably to carve out its own niche market and create and establish a “sustainable competitive advantage.”
Underpinning the ‘bottom-line’ goal, which is profitability, deeply entrenched in both...