This document of BUS 640 Week 4 Discussion Question 1 Strategic Behavior Oligopolies includes:
An interesting example of strategic behavior comes from a 1997 article about Microsofts investment in Apple (New Straits Times 1997). The article is included in the Required Readings list. Facing tough anti-trust scrutiny from government agencies Microsoft provided financial support to Apple in order to ensure Apples survival and therefore to ensure that competitiveness in the industry remains. Moreover the partnership with Apple provided an additional market for Microsofts products the MS Office and the IE products were to be bundled with the MAC OS as one of the conditions for this financing. Discuss this case in the context of market structure and strategic behavior. What market structure do these firms operate in? Why did Microsoft need to preserve competitiveness in the industry? What was Microsoft afraid of in the event that Apple did not survive?