Structure-Conduct-Performance Analysis

This paper will perform an SCP analysis of Microsoft. The acronym SCP stands for Structure-Conduct-Performance, and is an effective method for evaluating companies. The SCP concept will form the main organization of this paper. Part I will deal with Structure and will explore the actual organizational structure of Microsoft. Part II will deal with conduct and pricing issues, including the recent anti-trust rulings. Part III will explore the profitability and performance of the company.

I. A. Type of technology and product

Microsoft has the business mission of manufacturing and selling software programs for use on personal and business computers. Its programs range from the Internet Explorer Web browser to Microsoft Office business suite to multimedia encyclopedia Encarta (Brinkley, 1998).

The dominance of its Windows operating system that has made Microsoft the world's largest software company and CEO Bill Gates the planet's richest man. The company continues to expand beyond the PC, pushing into interactive television (WebTV), television stations (MSNBC), and information appliances (Windows CE software).

It has invested billions in cable companies worldwide to assure its software will control interactive TV services. Meanwhile, online service Microsoft Network (MSN) is expanding its array of e-commerce offerings to compete with other major portals (Bank & Wilke, 1998).

I. B. Market supply and demand conditions

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