Microsofts domination of the Chinese software industry and failure to adapt their strategy to the chinese culture. Due to this, Microsoft experienced patent, piracy, and several political challenges with the chinese government and local firms. China's respect for intellecual property rights is underdeveloped and the chinese governemtn has not taken sufficient steps to defend ipr.
Alternative Solutions
1. Continue to partner with local governments, FBI, chinese officials, american politicians and corporate executives to come up with efforts and press china to crack down on piracy. Inform about the negative impact piracy has globally. Continue to set up training centers, research in fevelopment and other investments in china. Lower prices to decrease the amount of piracy in areas with significant amounts of piracy due to lack of money.
2. Continue to enter joint ventures with local chinese software vendors and computer manufacturers in different cities in china who have good connections to local govts. Hold majority stake to prevent losing technological competencies. Lobby for government intervention on piracy. Altert public about the risks associated with pirated software-malware, deliberate security vulnerabilities.
3. Focus on acquiring local companies and research and development and anti-piracy efforts.
4. Continue signing agreements with major local chinese computer companies and local electronic retailers in china to sell their pcs with pre-installed copies of windows to decrease lawsuits, gain consumer base. Microsoft product would be on computers without the need to merge or acquire other companies.
5. Stop spending significant amounts of funds on research, anti-piracy effortrs, and focus on innovation and more up to date products like google and apple provide.
3. Dealing with local levels of government benefited microsoft by helping them better manage the issues they face doing business in china. Microsoft gave the chinese