Microsoft Company Adaptation to the Global, Social, and Economic Changes - Case Study Example

Microsoft Company Adaptation to the Global, Social, and Economic Changes since 1990 Since 1990, the whole world has undergone major changes in the economic, global, and social changes. These changes have been most evident in major countries and states that had the largest economies at the time, and a major factor is how its population reacted to the changes. Due to the aforementioned changes, major companies in various sectors had to adapt to the changes in order to remain solvent and remain relevant. However, not all were successful in their endeavors (Marlene, 2009:35). Most of the companies either went bankrupt or got into outsized levels of debt which they have not managed to clear even at this moment. Nevertheless, some companies not only managed to remain afloat, but also raked in huge profits during those trying times. This paper seeks to analyze the major changes that rocked through the United States of America, and how various companies in the country managed to steer through the tough times. In particular, the paper places much focus on the performance of the Microsoft Company from 1990 to the current times (Ponzio, 2009:48). In the 1990s, the US underwent the second-longest era of growth ever seen in the country’s history. The country’s fiscal position grew at a mean rate of about 3.5% per annum. In addition, the country’s unemployment figures decreased to a level that, at one time, was below 4%. The nation’s stock market experienced drastic and interesting gains. This resulted in most of the country’s biggest business ventures raking in abnormal profits. Virtually all of the country’s population managed to be in a position to buy their own houses to live in during that particular era (Marlene, 2009:113). However, this blessed era ended towards the end of 2001, when the country’s monetary position growth rate radically fell after an unprecedented collapse in its major industry sector, the complex technology sector. The American economy is, by far, the most ideal in the world. However, it has always faced numerous troubles. The nation consists of very many manufacturing industries which products and goods get their respective markets locally. However, the industries, since 1990, were unable to satisfy the total consumer demand for various products and services. This has resulted in the United States having to keep an imbalance in their foreign trade as they have to import much more than they export. Because of the 1990s boom growth, the American economy developed a two-tier fiscal position. This resulted in some percentage of the country’s population attaining outsized incomes while the rest wallowed in poverty. In addition, the era brought complex and continuous technology into the work areas. This has had the effect of restraining the country’s unskilled employees in minimum-pay or casual jobs, with no hope of advancement up the corporate ladder. By the start of 1999, a sizeable percentage of America’s population, amounting to about 12%, was still wallowing below the poverty line. In general, the country’s fiscal position has drastically improved since the dawn of the 1990s. However, a large quota of the profits realized in the country end up in the pockets of only about 20% of the total population (Marlene, 2009:147). By 1999, the most successful percentage of the country’s population amounting to about 10%, managed to earn about 29% of the nation’s fiscal profits while the bottom 10% of the nation’s citizen managed to accrue only about 1.4%. Though the country’s economy exhibits a great deal of diversity, services are the main constituents of the economy. In 1994, the services industry dominated about 80% of America’s GDP. Manufacturing dominated around only 18% while the country’s agricultural arm only had 2% (Ponzio, 2000:159). The Microsoft Company came into being because of the idea of William Gates in conjunction with Paul Allen. Initially, the venture offered only one product. It employed only three workers, and, in its first year of business, raked in only about $ 25,000 dollars in sales. Gates and his partner had decided to base their company in Alberquque, New Mexico, in order to access the MITS Computer Company easily, which had helped in constructing their Altair microcomputer equipment (Marlene, 2009:172). Microsoft’s initial product was the Microsoft BASIC, the then programming dialect of the Altair. The Microsoft BASIC was an improvement of BASIC, which was a mainframe computer dialect that the two partners had gotten wind of while in high school in Seattle. As time went by, the company made major breakthroughs in the computer field. Not only did the company improve BASIC vastly, but it also modified other present computer languages for their use. In 1977, the company unveiled a modified version of FORTRAN, and quickly followed it with another improved version of COBOL in 1978. By the dawn of 1979, the company had successfully managed to relocate its operations to Washington. At the time, the venture boasted of about $ 3 million dollars in annual income. In addition, it had raised its employee figures to around 30 workers (Kim, 2002:97). In 1980, the venture made a life changing decision businesswise. In that year, it entered into a contractual agreement with IBM to help in the construction and development of the personal computer. In return, IBM required Microsoft to improve the current versions of COBOL, FORTRAN, PASCAL, and BASIC further to enable their smooth use on the IBM computer versions (Baumol, 2011:79). In addition, towards the end of the same year, Microsoft entered into an additional agreement with IBM that put them up with the responsibility of developing the operating system that was to run the personal computer. The operating system is a major factor of all computers (Kim, 2002:117). In addition to it being the lifeline of the computer, it has also been the major influential factor behind Microsoft’s success. In 1981, the company unveiled the DOS 1.0 operating system for use by the IBM computer. This move proved to be a major landmark in the company’s history. When other computer manufacturing companies, including Compaq, invented computers that were compatible with the IBM versions, they unknowingly enabled the Microsoft’s disk-based operating system, known as MS-DOS, to access a multi-billion dollar market base. In addition, this move also greatly favored the sales of other Microsoft computer software systems. The Microsoft management, on analyzing the great potential benefits that this happening offered, decided to incorporate, and subsequently formed a nation-wide sales network (Wright, 2007:186). Since 1981, the personal computer sector and the Microsoft Company have both experienced drastic growth rates. This growth was the result of the changing of the computer industry by the IBM computer. The general industry’s income has steadily grown at a consistent rate of approximately 25%. In addition, Microsoft sales figures have also steadily risen at a consistent 36% rate (Baumol, 2011:107). By 2008, Microsoft stood as the globe’s biggest software manufacturer for personal computers. Since its inception, the company has unveiled numerous operating systems. These include Windows 3.0 in 1990, MS-DOS in 1981, Windows Vista in 2005, Windows XP in 2001, Pocket PC in 2000, Windows 7 in 2009, and Windows Mobile in 2003. The highlight of Microsoft’s success in innovation in the software category has been Microsoft Office. This is a combination of inter-blended programs, which are very crucial for personal and business use. The 1990s were a very eventful era for the company. This is because most people in the world had begun to appreciate the function ability of the personal computer (Kim, 2002:138). In addition, while other industries struggled to adapt to the current changes flowing across the world, Microsoft was enjoying high sales and, in fact, had trouble satisfying monumental orders. Most hardware producers installed Windows as the basic tool on their machines due to the compatibility of the Windows Ready-to-RUN software. The venture’s hardware division also benefited greatly, with the company’s Mouse selling about 6 million units in 1991 alone. During this era, the company expanded greatly. In 1991, it acquired a 25% share stake in Dorling Kindersley Company, which was a London publishing and packaging venture (Baumol, 2011:129). In early 1992, it merged with Fox Software Inc by offering about 1.3 million shares for the whole company. In 1993, it unveiled the Microsoft Mouse 2.0, which was equally good for both right and left-handed individuals. In the same year, it launched Microsoft Windows NT, a program that greatly favored business inventories (Kim, 2002:159). By 1996, the company had invented the Microsoft ActiveX technology, which helped in the constructing of live content for use on the Internet. In late 1998, it restructured its management, appointing Steve Ballmer as president. Generally, the 1990s were a very successful era for the company. This is because the economic, social, and global changes called for the introduction of technology in all sectors (Marlene, 2009:289). Therefore, Microsoft had an unlimited market base, thus their sales shot up. At one time, it accounted for about 24% of Washington’s revenue. Bibliography Baumol, J. (2011) Economics: Principles and Policy. London: Cengage Learning. Kim, S. (2002) RiskGrade Your Investments: Measure Your Risk and Create Wealth. New York: John Wiley & Sons. Marlene, T. (2009) America in the 1990s. New York: Twenty-First Century Books. Ponzio, J. (2009) F Wall Street: Joe Ponzio's No-Nonsense Approach to Value Investing For the Rest of Us. Westchester: Adams Media. Wright, E. (2007) Left-handed History of the World. Mission City: Murdoch Books. Read More