Microsoft In The People's Republic Of China Case Study

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Business Planning and Control – Assignment 2
Microsoft in the People’s Republic of China in 1980s and 1990s
Part A
The past business undertaking of the Microsoft in the People’s Republic of China in 1980s and 1990s (60% Marks)
History of the People’s Republic of China in 1980s and early 1990s
Microsoft Corporation
It is an American public multinational corporation established on 04th April 1975, which develops, manufactures, licenses and supports a wide range of products and services predominantly related to computing through its various products division.
At the beginning it was developed to sell BASIC (programming language) interpreters for the Altair 8800 (Microcomputer design) but however it rose to dominate the home computer operating system market with MS-DOS in the mid 1980s, followed by the Microsoft Windows line of operating systems. Eventually it comes to dominate the office suite market with its Microsoft Office.
In simple words Microsoft produces applications which are commonly used such as spreadsheets, word processors and database managers and operating systems which work with the microprocessors in order to perform the basic “housekeeping” functions like file creation, file maintenance and printing of files with the help of a graphical user interface (GUI) to link the both.
Question 1
Identify and analyse the external environment factors faced by Microsoft in doing business in the People’s Republic of China in 1980s and approximately in the first half the year 1990s?
(20 marks)
External Environment factors are factors which are uncontrollable by the organization. The factors are:
Political: It is a form of Government & its stability
Economic: The Economic Development of the environment affected
Social: Socials issues of the environment. For e.g. Customs, norms, values, Human rights, etc
Technology: The availability of technological advancement and etc
Legal: The Regulations & Laws of the affected environment circle
International: The cost of activities involves for example, bank charges, import/export duties, etc.
Environment – The Office & Natural Environment
Demographic – The availability of work force (age, race, gender, etc)

Opportunity of Microsoft
Death of Mao Zedong
The Premier Deng Xiaopin’s reforms initiated after Mao Zedong’s death in 1976 has made a transition of China to a Socialist market economy. He pointed out that Agriculture, science and technology, industry and defence were the four targeted for modernization. These targeted industries will need the uses of more advanced technology in order for it to be modernized which will open doors for Microsoft to promote its products especially its operating system and its software to help enhance the operations. As it also mentioned that the science and technology was also targeted this proved the need of technology advancement which was supported by the venture of the world’s largest supplier of information on information technology with the Technical Information Research Center, a division of China’s Ministry of Machinery and Electronics Industry which was also the responsible ministry for the development of the electronics and computer industry in China.

Diplomatic relation
In 1978, the diplomatic relations were re-established with the United States after 30 years. As Microsoft Corporation is originally from the United States with the re-establishment of diplomatic relations this prove that China and the United States have gained and maintained a good relationship with one another diplomatically this will therefore increase the trusts of the people of Republic of China to the Americans. With the increased in trust it was an opportunity for Microsoft to nourish its establishment throughout the people of China.

Population of China
Domestic Demand
China’s 3.7 million square miles which supports 1.1 billion people in 1992 has created an opportunity for Microsoft to venture in China