Case study: Microsoft Opens the Gates: Patent, Priacy, and Political Challenges in China.
Q1: What are the risks that Microsoft has faced in operating in China and dealing with the Chinese government? Do you see these risks as increasing, diminishing, or changing in the future?Are these risks unique to China or present in other developing countries?
A: There are two major risks that Microsoft has faced in operating in China. Firstly, after China joined WTO. Although Chinese government taks some actions for its IPR, especailly for foreign compnies, the rate of piracy still not decreasing a lot. So the Microsoft’s risk is need to dealing with the government of China, to decreasing the piracy rate of Microsoft business in China. Secondly, the Microsoft faced another risk is nationalism in China, it could leads to people and firms relutant to buy foreign products, and do business with foreign companies. It is not good for Microsoft’s security and independence in China. These risks are diminishing in the future. The reason of this is Microsoft already opened another international company in Shanghai, and Microsoft also opened market of Windows XP, MSN, and Vista in China. China becomes a large international market for Microsoft in the world. These risks are present in other developing countries. Piracy rate is higher than developed countries because the piracy products are cheap. The individuals of countries would like to buy local products than international products. For these two major risks, Microsoft also need to faced in other developing countries
Q2: What approaches did Microsoft take to manage its political risks in China? Why might it have favored some of these techniques versus others? Which do you feel worked best? What should Microsoft do going forward?
A: Microsoft opened international company in Shanghai, and it also opened market of Windows XP, MSN, and Vista. In order to work with other local companies in China, Microsoft allowed...