Subject category:
Economics, Politics and Business Environment
Published by:
Harvard Business Publishing
Version: 2 August 1995
Length: 18 pages
Data source: Field research
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https://casecent.re/p/45261
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Abstract
Explores some of the economic and political tradeoffs that need to be negotiated by a firm seeking to influence industry structure. The setting is the nascent personal computer software industry in the People''s Republic of China (PRC) in 1993. Microsoft has to localize its software products for use in the PRC. This localization can either be done in- house by Microsoft, or can be contracted to the local software vendors. Explores the costs and benefits of full integration and arms-length market transaction. Also discusses the "holdup" problem that arises when assets specific to a particular partnership are created.; Structuring a newly developing industry, market entry in an emerging economy, and understanding the pros and cons of integrating into a related set of activities.
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Abstract
Explores some of the economic and political tradeoffs that need to be negotiated by a firm seeking to influence industry structure. The setting is the nascent personal computer software industry in the People''s Republic of China (PRC) in 1993. Microsoft has to localize its software products for use in the PRC. This localization can either be done in- house by Microsoft, or can be contracted to the local software vendors. Explores the costs and benefits of full integration and arms-length market transaction. Also discusses the "holdup" problem that arises when assets specific to a particular partnership are created.; Structuring a newly developing industry, market entry in an emerging economy, and understanding the pros and cons of integrating into a related set of activities.