Chapter 1381 – Microsoft’s strategy
“Lenovo Kingsoft’s office software has added several foreign languages, and there’s not much different from ours. Their selling prices are also half of ours. How are we going to handle this situation?” Bill Gates asked.
“Feng is a shareholder of Lenovo Kingsoft, right? We should speak to him and prevent this vicious competition. If we can work together, we can raise the barriers and share the market. A healthy competition will give us the highest profits.” A director said.
Paul Allen waved his hand. “Why are we holding a Board of Directors meeting if it is so simple? Feng had dropped by two days ago, but he refused to cooperate with us. The next day, he started targeting our market, catching us off guarded.”
Paul Allen felt his face burning with embarrassment when he said this. Feng Yu had warned them that he would compete with them before he left. But they thought it was only the Chinese market.
Although the Chinese market is huge, it created the lowest profit for Microsoft. That’s why they are not worried. They had the time to take precautions, but they are too complacent.
That Director did not continue. That’s right. Feng was kicked out of Microsoft in the past and had become the World’s Richest Man now. It’s normal for him to be arrogant.
Furthermore, Feng Yu is young, and people his age are rash and stubborn. It’s not a surprise for him to suffer losses to compete with Microsoft.
To that Director, everyone at Feng Yu’s age is the same, including the World’s Richest Man.
Ballmer frowned and asked. “Since Feng wants to compete with us, then we will accept his challenge. With our cash reserves, we don’t need to worry about that company.”
“Steve, do you know what you are saying? We are talking about money now. If we lower the retail price by half, our profits will plunge. Our share prices will also be affected if we do this, and we will lose the investors’ trust!” Paul Allen shouted.
“Then what do you suggest? Do you have a better solution, or can you persuade Lenovo Kingsoft to raise their price? Can you sell our products when our product is inferior to theirs and priced doubled of theirs? I need to remind you that you are in charge of our R&D department now!”
“What do you mean? Are you saying that the R&D department had failed after I took over?! Some of that WPS’s functions had exceeded us when I took over!”
Paul Allen is furious because Ballmer is pinning the blame on him. Did he think that he is superior after becoming the President and CEO? He should be given any shares and let him enter the Board of Directors in the first place!
“Since WPS had already exceeded us when you took over, why is the gap not narrowed after so long, and it had widened further? Do you even know what you are saying now? Is this the time to talk about our selling prices and share prices? We should focus on retaining our users and protect our market share now.”
“Our Office has the most users globally, and all other office software has to follow our standards to be compatible with us.”
“But now? A new product with better functions than us has appeared. This product is not inferior to ours, and what does this represent? It means the standards had been raised, and we are not the ones who raised them! This is the fault of the R&D department under your charge! What have you been doing these few years?!”
“You have your own company but still want to hold on to your authority in Microsoft. Did you fulfill your responsibility? You had spent most of your time on your company, and you should bear the responsibility for this situation!”
Ballmer had shocked other Directors. This is a fallout between Paul Allen and him, and he is forcing Paul to give up his authority in the company.
Ballmer has already become the President and CEO of Microsoft. What else does he want? That’s right. He has become the top person of the company, but Paul’s department doesn’t listen to his orders. Coupled with their previous grudges, it’s not a surprise for them to fallout now.
The other Directors are surprised that Bill Gates did not stop them. Did he agree with Ballmer?
Paul Allen also notices something. No one is supporting him and everyone, including Bill Gates, looks at him with disapproving looks.
But Paul Allen will not hand over his authority, and the easiest solution is to divert everyone’s attention.
“Alright. Then tell me, what should we do now? Lowering our selling price by half can get back our market share? Do you think they will not lower their prices further? Look at their selling price in China, and you will know Lenovo Kingsoft’s production cost.”
“No. We still have an advantage in the English-speaking market. Although their Chinese developers are cheaper than us, their mother tongue is Mandarin. They have to work with other companies to develop other languages. That means their cost for foreign language version will be higher.”
“We are different. We have branches in many countries and hired many employees. Many of our versions are developed by ourselves, and our cost is lower. We might not be their match in China, but we are still advantageous in other markets.”
Before Ballmer can continue, a Director interrupts. “Who says we will lose in the Chinese market?”
Everyone looks at that Director. Did they miss anything that can turn things around?
“What will happen if we stop piracy protection and stop using activation codes?”
Everyone is shocked. This will increase piracy, and no one will buy their original version anymore. Wait a minute. He says that we can use pirated software to snatch the market share, just like what they did in the past.
This solution will harm the other party without benefiting Microsoft.
“We can stop the upgrades to this version and introduce a new version in three years. This will cause Lenovo Kingsoft to have no profits and suffer losses. It will be a devastating blow to them if no one is buying their software after investing so much into it.”
“2 to 3 billion losses annually is nothing to us. We can recover the losses in the future if we still own the market share!”
