Question

6 Part S Cases What's Ahead? Microsoft has been the leader in the OS market for quite some time, but it does not know much about retailing. Thus, the opening of company-owned retail stores in an at- tempt to counteract Apple's channel strategy success is indeed a bold step on the part of the OS giant. Is Microsoft going to be able to do it? One could argue that Microsoft lacks the type of innovative flare that Apple has built its business around and that has played a crucial role in the successful implementation of Apple's retail strategy. Microsoft execu- tives do recognize the numerous challenges associated with the opening of their own retail stores, but they are determined to carefully plan, develop, and improve the company's retail strategy in order to deliver higher levels of customer service and tech support to its existing and future customers. As David Porter noted Retail is an interesting business. In retail you are never finished. There's always a nevw item. There's always a better way. We can always improve our service. So let's get better tomorrow. That's what Microsoft retail will be. It will be better tomorrow than it is today, and it will steadily make progress every single day." Despite the optimistic expectations about the future of Microsoft retail among com- pany executives, Microsoft stores have been criticized for being mere copies of Apple stores. It has even been alleged that Microsoft recruited Apple store employees and store managers and that, by doing so, Microsoft would "rub off on the Apple stores.15 In short, Microsoft has been accused of "imitating" Apple's channel strategy instead of de- vising its own. Further, by opening company-owned retail stores, Microsoft is hoping to enhance its channel strategy, which has until now relied on consumer electronics super- stores such as BestBuy and CompUSA for the distribution of Microsoft products to con- sumers.1" The crucial question then is: Will Microsoft be able to enhance its channel strategy without alienating its independent retailers? iscussion Questions 1. Why do you think Microsoft decided to change 3. Do you think that by opening its own retail stores, Microsoft has employed a "me too strat- egy in order to imitate Apple? Or are there sound its long-established channel strategy by opening 2. Will the opening and operation of company owned retail stores allow Microsoft to deliver the level of customer service and experience that its customers have been looking for over the years? 16 Nick Wingfield (2009、October 15). "Microsoft Seeks to Take a Bite Out of Apple With New Stores." Wall

   3 questions

Answer 1

(1): Microsoft decided to change its long-established channel strategy by opening its retail stores as it was looking at improving its level of customer service. The consumers were dissatisfied with the company’s level of customer service and Microsoft wanted to change that. By opening retail stores Microsoft wanted to create a deeper level of engagement with its customers. Retail stores will also enable Microsoft to better understand the needs and wants of the consumers.

The company was also looking to arrest the decline in its market share and it devised a new strategy. Opening up of own retail stores was an integral part of this strategy. The strategy focused on establishing an alternate marketing channel and this channel increased the convenience level for Microsoft’s consumers.

(2): Yes, the opening of company-owned retail stores will allow Microsoft to deliver the level of customer service and experience that its customers have been looking for over the years. This will happen mainly because of coming together of several factors in favor of Microsoft. First of all it will enable Microsoft to gain a better of its service and product offerings. Secondly it will ensure that a unified and core strategy is being implemented with regards to sales and marketing of its products. Thirdly it will enable prospective buyers to try out and experience the products on a first hand basis. This will lead to customer engagement at a tangible level.

(3): By opening its own retail stores Microsoft is not employing a “me too” strategy in order to imitate Apple. In fact there are sound reasons behind the company’s decision to open its own retail stores. The sound reason was that there was a clear gap in its sales, marketing and delivery model and the company wanted to fill that gap. The systematic way to fill the gap was to open company owned retail stores which will enable Microsoft to develop its own competitive advantage by addressing the needs of the customers in a proper manner. Company owned retail stores enabled Microsoft to not only create a better relationship with customers but also enabled it to win back the trust and confidence of the customers.