Mergers, Acquisitions and Takeovers Case Study

Microsoft in China: The Partnering Success

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Abstract:
Chinese people are more price sensitive and using illegal software on a large scale. The country had huge plants that churned out some 54 million illegal software packages each year. This treacherous environment was an obstacle for Microsoft's success. After stumbling for years in its earlier approaches to the Chinese market, Microsoft hired Tim Chen as head of Microsoft's Chinese business for the revival. Chen initiated several efforts like building good relation with Government, partnership with local companies, slashing the price of its Operating System (OS), educating and training people. However industry analysts doubted Microsoft's success in China. This case study explores strategies used to overcome the challenges faced by an MNC in China.

Pedagogical Objectives:

• The importance of developing economies to MNCs
• The challenges in bureaucratic developing economies
• Analyse strategies adopted by Microsoft in China.

Keywords : Illegal software; Tim Chen; Linux; China; 54 million illegal software; Joint venture; Training; open source code; price; Mergers,Acquisitions,Alliances Case Study; counter strategy; R & D; Vista; Lenovo; shareholders; turnaround

Contents : 
Dilemmas and Initiatives
Microsoft in Late 1990s
Problems Persist
The Local Players in Chinese Software Market
Piracy Rates in Different Countries