Microsoft: Vista Operating Systems - Essay Example

Vista Operating Systems: of Vista is a Windows operating system used in many personal computers, tablets, laptops,office computers, and desktops. Microsoft Company produced and introduced it in the market in the year 2007, on January 30 (Lambert & Cox, 2007). Microsoft Company is a monopoly firm in the production on Vista since it is the only one granted the right to produce the product. It cost the company long working hours and much finances in developing the windows operating system. Consequently, there have been many debates on the patent rights granted to this company since most of the people think that it would be better if many different companies were allowed to produce Vista. However, the retail market is very competitive since many retailers are allowed to sell the products in the market. Both Microsoft Company and the retailers are able to make profits; however, Microsoft Company makes a larger profit margin compared to the retailers. The monopolistic production of Windows Vista is benefactions in many ways unlike when many companies produce the product. The benefits of a monopolistic market include; more research on the product, economies of scale, and international competitive advantage leading to the success of the company. Through research, Vista Windows Operating System has been competitive internationally due to the globally increased market (Lambert & Cox, 2007). Monopolization of the product has also led to economies of scale as it leads to decreased production cost consequently leading to increased sales due to reduction on the product’s price. Additionally, it is efficient since customers are able to receive the product at a standardized cost in the market. More development on Vista is also possible since the supernormal profits gained by Microsoft Company are used in this process (Jones, 2007). However, if production of Vista was allowed to all companies, the product could have many faults. Many companies producing the product would compete and aim at gaining the largest market and making more sales to increase their profit margin. Due to this, prices of Vista Operating System could have been very high. In addition, the quality of the product would have been very poor since most companies would produce the products rashly and inefficiently in order to make maximum profits (Lambert & Cox, 2007). Most companies do not risk investing so much on a product that can be produced by any other company since most of the customers prefer to buy the cheapest products in the market. Consequently, most companies produce substandard products and sell them cheaply eventually making it hard and difficult for the producers who produce quality, but costly products. Similarly, if Microsoft Company invests more on producing Vista in this case, it would eventually result to losses and finally withdraw from producing the products (Lambert & Cox, 2007). The competitive market structure of Vista product is however different from its monopolistic production, since there are many retailers in the market selling this product. In perfect competition, no single retailer claims to have a large share of the market or the power to change the price of the product. However, the forces of demand and supply are used to determine the prices. In most cases as it is similar with Vista, when a monopoly company produces a product, it is usually competitive in the market since the products are few. Additionally, only one company, which is Microsoft, controls the Vista product in the market (Jones, 2007). The Company regulates the prices of Vista products to prevent the overcharging of the customers by the retailers. However, every retailer with the intention of attracting customers sets the prices very low, thus decreasing their profit margin. Microsoft Company however achieves a big profit margin since it is a monopolistic firm and hence sets the prices of products in the market to a level where it gains great profits. Many retailers find it difficult to remain in the market since their profit margin gained from selling the products produced by a monopolistic firm is very low. PCs and Vista Windows Operation system retailers have a small profit margin due to the perfect competitive market causing them decrease their prices with the intention of attracting more customers (Jones, 2007). However, in any perfect competitive market, it is not advisable for any retailer to withdraw from it since their profit margin is low. Conversely, it should operative by its best level to ensure that it survives in the market. Economic theories state that businesses should operate efficiently in a competitive market no matter the profit margin so long as the business experiences a positive economic profit. Similarly, no retailers of the vista products should withdraw from the market if they are not making losses. After launching Vista product by Microsoft Company in the year 2008, many other retailers have joined the market with the intention of making profits from the sale of the product (Lambert & Cox, 2007). However, through research, the numbers of retailers selling this product are very few compared to other retailers joining the market to sell other products. This observation was related to the profit margin as retailers did not prefer to join a market where the profit margin is low. It is also observed that most retailers do not prefer to sell products from monopolistic companies. This situation is so because retailers prefer selling products from competitive production companies where they can set their own prices to sell in the market. Correspondingly, this is also the same case with the computer chip market. Intel Company and Advanced Micro Devices are the only companies that produce these products (Ballew, 2008). Consequently, the two companys products compete greatly in the market since each company wishes to have a larger share of the market. To achieve this, the company reduces its prices to gain more customers and outdoes the other in the market. Consequently, the profit margin of Intel Company and Advanced Micro Devices decreases with time since they continue reducing the prices closer to the production cost of the computer chips. Comparing the two competing companies (Intel Company and Advanced Micro Devices) and Microsoft Monopolistic Company it is clear that there is a greater price competition in the former compared to the later. Consequently, their high competition causes price antagonism on their products. However, Microsoft Companys Vista products have no price competition in the market since it sets its maximum and minimum prices. In addition, Vista has no substitute products in the market as compared to the computer chips produced by Intel Company and Advanced Micro Devices (Lambert & Cox, 2007). Conclusively, it is true to say that the monopolistic production of Vista and its perfect competitive market leads to its efficiency (Lambert & Cox, 2007). Reference Ballew, J. (2008). Windows Vista. Redmond, WA: Microsoft Press. Jones, T. T. (2007). Vista vision [Microsoft Windows Vista]. Computing & Control Engineering, 18(2), 22-25. Lambert, J., & Cox, J. (2007). Windows Vista step by step. Redmond, Wash: Microsoft Press. Read More