one of product from Microsoft Corporation. This product is exist is to help people and the businesses easier to do their work. Microsoft Office exist since 1992 which is Microsoft office 4.x and Microsoft Corporation make a new improvement year by year and in 2010 Microsoft Corporation came out with new features in the Microsoft office and the software call Microsoft office 2007. Page 4 of 9
X. CONCLUSION The most extreme examples of the way increasing returns works in the real world today appear is the computer software business like in Microsoft Company, where establishing a big user base is the key to success. It’s the reason that Microsoft wins virtually every market share battle it enters, even when its products aren’t necessarily the best. Microsoft set a standard for personal computer operating system that “locked in” and consequently gave it a huge advantage in selling its spreadsheet and word- processing software. At the short run, yes, Microsoft experience the diminishing marginal returns because they need to exert money and effort in their production and distribution of their products. In the long run, after all those production and market penetration making them standard in operating software, then, the increasing returns. That is, first, there’s the upfront cost of development, but once the product is ready to roll, manufacturing costs are relatively low. Microsoft spent millions in developing Windows Software, but it costs Microsoft almost nothing to make more copies. And in fact, the more copies the company puts on the shelves, the more it sells, because the more people use Windows, the more software gets developed for it. The more software is available, the more people buy it. Therefore, the fact that increasing return exists does not mean that diminishing returns doesn’t. This two phenomena will always coexist, normal, and are complementary. Most businesses, especially mature ones will forever remain in the competitive and unforgiving world of diminishing returns. But the new thinking about increasing returns helps us to understand why the Microsoft operates by rules that economists either had long believed impossible or had chosen to ignore. XI. REFERENCES - microsoft-begins-and-the-history-of-technology-as-well/ Page 5 of 9
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- Fall '19
- Microsoft Corporation