Partnership and Microsoft

Topics: Partnership, Limited liability partnership, Tax Pages: 5 (1679 words) Published: November 15, 2012
1. What are some relative advantages and disadvantages of using smaller local partners vs. a large local partner? Some advantages that Microsoft might have are that in general partnerships, each participant is personally responsible for the actions of the company. This includes debts, liabilities and the wrongful acts of other partners. One advantage of a limited liability partnership is the liability protection it affords. This type of partnership structure protects individual partners from personal liability for negligent acts of other partners or employees not under their direct control, states the SBA. In addition, smaller local partners are not personally responsible for company debts or other obligations. This is advantageous for smaller local partners when potential lawsuits or claims of negligence against the business are concerned. Microsoft in individual smaller local partners the Individuals in a partnership are normally liable for filing personal income taxes, self-employment taxes and estimated taxes for themselves, according to the Internal Revenue Service. The partnership itself is not responsible for paying taxes. The credits and deductions of the company are passed through to partners to file on their individual tax returns. This can be beneficial for partners who have a limited interest in the company or special tax requirements due to their interests in other businesses. One advantage of collaborating with a large local partner is that the smaller company has more money at its disposal to invest in the idea. When a large company chooses to collaborate with an entrepreneur, it is in the interest of supporting the new business concept so that it will produce more profits over time. Of course, the investment from a large company is in exchange for a piece of the new company, but it might help the entrepreneur achieve a profit level that she would not have reached on her own. The small local partner have more money the large local partner has the control of all that money. 2. Are there countries where Microsoft’s strategy might not work? Microsoft programs are considered the standard against which other software is measured and are used throughout the world. The company currently counts on sales in Europe and Japan for a substantial portion of its revenue, but feels that emerging markets such as China, India and Eastern Europe will become more important in the future. Microsoft’s strategy for entering new markets involves hiring a local manager to set up operations. The local manager then hires other locals in an effort both to gain knowledge of the local marketplace and to make a symbolic goodwill gesture toward the host country. The company then forms alliances with smaller, local companies that allow the firms to market Microsoft products. It is Microsoft’s hope that its strategy will result in local software industries specifically linked to local circumstances. Microsoft’s reliance on local partners has allowed it to be effective in product distribution and sale, minimize difficulties with local languages, and even reduce problems associated with product piracy. Critics warn, however, that relying heavily on local partners could result in long term problems including a loss of corporate culture and product quality and distribution problems. Microsoft is one of the most successful company’s in the globe they are successful because they attack the future, this means no complacency, do whatever is necessary to shape future opportunities in the market, and capitalize on them for Microsoft. They want to make favorable market change happen. That is way there’s no country in the globe that does not use Microsoft they are always innovating and looking for new ways to be successful. 3. What other kinds of businesses might find Microsoft’s strategy to be effective? Well there’s a lot of business that might find the strategy of Microsoft to be effective because, Microsoft has seven points to success the...
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