After reviewing the textbook chapters for this unit and watching the videos by Professor Christensen, research the strategies employed by Microsoft and Google in the enterprise productivity software market (Office vs Google Docs). Create a forum posting that discusses the relationship of these two companies in this market using Professor Christensen’s concepts of Value Networks and Disruptive Innovation. How was Microsoft’s response different than that of the Yahoo! response to the idea of the mobile market?
Table of Contents
QUESTION
After reviewing the textbook chapters for this unit and watching the videos by Professor Christensen, research the strategies employed by Microsoft and Google in the enterprise productivity software market (Office vs Google Docs). Create a forum posting that discusses the relationship of these two companies in this market using Professor Christensen’s concepts of Value Networks and Disruptive Innovation. How was Microsoft’s response different than that of the Yahoo! response to the idea of the mobile market?
*Remember – Simply telling me what went on is not what’s interesting. Analyze the company responses in terms of this framework.
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After reviewing the textbook chapters for this unit and watching the videos by Professor Christensen, research the strategies employed by Microsoft and Google in the enterprise productivity software market (Office vs Google Docs). Create a forum posting that discusses the relationship of these two companies in this market using Professor Christensen’s concepts of Value Networks and Disruptive Innovation. How was Microsoft’s response different than that of the Yahoo! response to the idea of the mobile market?
Explanation of why companies would fail to recognize and react to potentially disruptive innovations.
An explanation of Microsoft’s reaction to Google Apps that employs the concepts the disruptive technology/value network concept.
An explanation of the differences between Microsoft’s and Yahoo’s reactions. Does Asymmetry of Motivation play a role in understanding the difference?
Citations for resources used in your answer (Citations should be in APA format)
***LINKS TO VIDEOS***
ANSWER
Microsoft and Google in the Enterprise Productivity Software Market: A Value Network Perspective
Introduction
The enterprise productivity software market has long been dominated by Microsoft’s Office suite, with its flagship product, Microsoft Office, serving as the industry standard. However, Google’s entry into the market with its cloud-based productivity suite, Google Docs, posed a disruptive challenge to Microsoft’s dominance. In analyzing the strategies employed by both Microsoft and Google, we can apply Professor Christensen’s concepts of Value Networks and Disruptive Innovation to understand their responses and outcomes.
Understanding the Value Network Model
The Value Network model, as proposed by Professor Christensen, refers to the interconnected system of companies, suppliers, distributors, and customers that collectively create and deliver value to the market. It emphasizes the importance of understanding the relationships and dynamics within this network to identify opportunities for disruption or innovation (Holloway & Sebastiao, 2010). The model highlights that successful companies often become deeply entrenched in their existing value networks, making it difficult for them to adapt to disruptive technologies or new market entrants.
Failure to Recognize and React to Disruptive Innovations
Companies may fail to recognize and react to potentially disruptive innovations due to several reasons. First, established companies often focus on sustaining innovations that improve their existing products or services, rather than exploring disruptive possibilities. Second, disruptive innovations often target underserved or overlooked market segments, which may not initially seem attractive to established players (King & Baatartogtokh, 2015). Third, the metrics and processes within an organization may favor sustaining innovations, making it challenging to allocate resources for disruptive initiatives.
Microsoft’s Reaction to Google Apps
When Google introduced its cloud-based productivity suite, Google Apps, it targeted a different customer segment than Microsoft’s Office suite. Google Apps offered collaborative and cloud-based features, appealing to small businesses, startups, and remote teams. Microsoft, initially viewing this as a niche market, failed to recognize the disruptive potential of cloud-based productivity tools.
Microsoft’s response to Google Apps showcased the challenges faced by entrenched players in disruptive situations. Rather than embracing the new value network and adapting their business model accordingly, Microsoft attempted to protect its existing market by launching its own cloud-based offering, Microsoft Office 365. However, Microsoft initially positioned Office 365 as an extension of its traditional Office suite, lacking the true disruptive potential of Google Apps. This response focused on sustaining innovations and failed to address the unique value proposition and customer needs of the emerging cloud-based productivity market.
Differences between Microsoft’s and Yahoo’s Reactions
The response of Microsoft to Google Apps differs significantly from that of Yahoo to the idea of the mobile market. Microsoft demonstrated an asymmetry of motivation compared to Yahoo. In the case of Microsoft, the company’s motivation to protect its existing Office suite and maintain its dominance in the enterprise productivity software market led to a defensive response. The strong position of Microsoft in the value network, along with its significant revenue streams from Office, created a vested interest in preserving the status quo.
On the other hand, Yahoo’s response to the mobile market showcased a lack of motivation and strategic focus. Despite having a strong presence in the online services market, Yahoo failed to recognize the disruptive potential of mobile technology and missed the opportunity to adapt and innovate. Yahoo’s motivation to defend its existing business and lack of a clear strategy to navigate the mobile market contributed to its decline.
In summary, Microsoft’s response to Google Apps exemplifies the challenges faced by established players in the face of disruptive innovations. The asymmetry of motivation, as observed in Microsoft’s defensive reaction compared to Yahoo’s lack of strategic focus, played a crucial role in understanding the differences between their responses.
