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Situation Microsoft MS is losing money in PRC partly because of the lack of intellectual property protection in that market and partly because its product Windows 31 can not meet local customers needs due to low level of localization Since localization of Window 31 seems indispensable for MS to succeed in the promising PRC market the question for MS is choosing the best localization solution from the available three choices These choices are either leaving the market open for Software Vendors SV to localize the product doing all of the localization by MS itself in Taiwan headquarter of Greater China or adopting an intermediate solution such as localizing in PRC Suggestion In addressing this question I used several criteria as listed in Exhibit 1 to evaluate these alternatives Exhibit 1 also listed detailed analyses of each criterion used My conclusion therefore is that localizing in PRC will be the best choice for MS among all alternatives as it helps build good government relationships that in turn benefit sales and competitiveness Meanwhile Microsoft can acquire the best product quality by localization in PRC due to familiarity with the market and convenient technical support Exhibit 2 Among all the criteria used the political issue ie relationship with the Chinese government plays the most crucial role as it has the biggest impact on other factors Specifically a good relationship with the government could 1 Get the power from PRC government to build a better legal environment as piracy software is rampant in PRC market and it seriously affects MSs profit 2 Increase sales as SOEs and government organizations account for a big percentage in MSs total sales 3 Help MS standardize the software industry to guarantee its long-term profits 4 Be decisive in securing Microsoft a competitive 2 advantage as PRC is still not a totally free market in terms of degrees of government intervention Implementation Why will localizing in PRC bring government support As Exhibit 3 shows
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