Google and Microsoft are two major American companies that compete in a number of fields, some of which include online search engines and online advertising. In this paper, the question of whether Microsoft should continue competing with Google, which enjoys more success in these markets, will be discussed.
Using the scheme proposed by Chen (1996), it is possible to say that Google and Microsoft have a very high degree of market commonality, as well as medium to high degree of resource similarity in the markets of search engines and online advertising. Also, the relationships between the companies in these markets are not symmetrical.
Indeed, Google has a larger piece of the market, providing 64% of search results in the U.S., whereas Microsoft’s Bing provides only 20%; and yet, Bing is the second most popular search engine in the U.S. (O’Reilly, 2015). Also, in 2011 the share of Google in the U.S. Internet-search advertising revenue was 74%, while Bing’s was 13.7% (Ovide, 2012b). Clearly, this data does not allow for direct and rigorous comparison, but the numbers for search results are still better for Microsoft in 2015 than the numbers for its ads revenue in 2011, which makes it possible to assume that Microsoft is not losing its ground. It appears a good enough reason for Microsoft to stay in the market for both online advertising and search engines.
As for the competition of Microsoft Office and Google Apps, Office “continues to have more than a 90% market share for ‘business-productivity software,’ as the category is known, and more than an 80% share of corporate email” (Ovide, 2012a), which means that Microsoft has more resources in their potential, and so it is recommendable to strive to keep their clients.
To sum up, it appears that Microsoft, despite Google’s tremendous success, has rather strong positions, and it is reasonable to strive to keep and improve them.
Uber is an American real-time ridesharing company that was founded in 2009 and rapidly became “the most valuable American company of its generation” (The Economist, 2015a, para. 1). In this paper, the source of Uber’s competitive advantage and possible challenges will be discussed.
According to Christensen and Overdorf (2000), “disruptive innovations create an entirely new market through the introduction of a new kind of product or service” (p. 72). Uber entered the market as a disruptive innovator (Stone, 2014); it provided the real-time ridesharing services that were sometimes worse in quality, but much cheaper and faster than regular taxis. Numerous people quickly started valuing this new service for its advantages, as well as owners of cars who could make some money in a convenient way.
The fact that Uber was not burdened by the needs of the traditional taxi industry, the easiness of “entry” for drivers, and the speed with which Uber could be used by clients were the features that could not have been matched by traditional taxi services; they provided the new firm with a major competitive advantage.
Noteworthy, many innovators often face legal challenges, and Uber is one of such cases (The Economist, 2015b); the company was initially unable to address all the quality issues due to the specifics of the business (the drivers were not employees of the enterpyrise). The firm initially worked counter to the legal regulations. Even today, the inability of the law to quickly incorporate the changes caused by the innovative technologies poses legal problems for the company (The Economist, 2015b). However, to deal with the challenges, it is possible to improve the quality of service. The firm has been doing it, for instance, by imposing quality regulations, and nowadays their service is “clean and reliable” (The Economist, 2015a, para. 2), which allows for better complying with the legal regulations.
To sum up, Uber entered the market as a disruptive innovator and grew rapidly thanks to the competitive advantages it had. The enterprise has some legal problems but addresses them by improving the quality of service.
References
Chen, M. J. (1996). Competitor analysis and interfirm rivalry: Toward a theoretical integration. The Academy of Management Review, 21(1), 100-134.
Christensen, C. M., & Overdorf, M. (2000). Meeting the challenge of disruptive change. Harvard Business Review, 78(2), 66-76.
O’Reilly, L. (2015). So long and thanks for all the ads! Here’s why Microsoft is exiting the $74 billion display advertising business.
Ovide, S. (2012a). Microsoft hits back as Google muscles in.
Ovide, S. (2012b). Microsoft stung by web woes. Web.
Stone, B. (2014). Invasion of the taxi snatchers: Uber leads an industry’s disruption. Web.
The Economist. (2015a). Driving hard.
The Economist. (2015b). Shredding the rules.