Microsoft, Masters of Clone-and-Hone
While many in the tech gadget world gather at the annual Consumer Electronics Show in Las Vegas this week, most attendees are waiting anxiously to hear what wonder Steve Jobs will announce at MacWorld in San Francisco. Speculation centers on the long-awaited iPhone (though, when it comes, it won't be called that because Cisco Systems owns the iPhone name). Zune watchers wonder what Microsoft's response will be if Apple integrates phone and iPod functionality on a single device.
Which brings up the subject of Microsoft's Zune strategy. I've already written about why I think Microsoft needs Zune (see Why Microsoft Needs Zune). Zune is Microsoft's weapon designed to keep Apple focusing its resources on iPod and not on freeing OS X to compete generically with Windows. Today I'd like to focus on how Microsoft goes about entering a market once it has decided to do so.
Microsoft uses a strategy I call clone-and-hone. In clone-and-hone, you copy the leading market entry (clone), then modify it by learning from the competitor’s mistakes and limitations, and, later, your own experience in the market (hone). When Microsoft attacked Netscape, this became euphemistically known as "embrace and extend." Clone-and-hone is a particularly good strategy when there is a well-established market leader and disruptive innovation is not your strong suit. In Microsoft's case, their strengths are distribution, marketing, wealth and brand.
Thus, Microsoft cloned iPod and iTunes with Zune, with minor attempts at honing. Now they are in the serious honing phase. The problem they face is that pesky Apple keeps innovating. This makes iPod a moving target. So Microsoft needs to wait for the next round of iPod innovation before it does more honing. They need to wait and see what Apple does with this phone thing.
I think this explains why some of the details of Zune are so lame (see, for example, Looney Zune Decision Stifles Gift Sales). Microsoft does not want to sell too many Zunes too soon. They want a more stable target. Of course, the more Apple innovates with iPod, the more it pulls resources away from unleashing OS X against Windows, which is good for the Softies...
Copyright © 2007 Philip Bookman
Technorati: Business Strategy, Clone-and-Hone, Zune, Microsoft.
Which brings up the subject of Microsoft's Zune strategy. I've already written about why I think Microsoft needs Zune (see Why Microsoft Needs Zune). Zune is Microsoft's weapon designed to keep Apple focusing its resources on iPod and not on freeing OS X to compete generically with Windows. Today I'd like to focus on how Microsoft goes about entering a market once it has decided to do so.
Microsoft uses a strategy I call clone-and-hone. In clone-and-hone, you copy the leading market entry (clone), then modify it by learning from the competitor’s mistakes and limitations, and, later, your own experience in the market (hone). When Microsoft attacked Netscape, this became euphemistically known as "embrace and extend." Clone-and-hone is a particularly good strategy when there is a well-established market leader and disruptive innovation is not your strong suit. In Microsoft's case, their strengths are distribution, marketing, wealth and brand.
Thus, Microsoft cloned iPod and iTunes with Zune, with minor attempts at honing. Now they are in the serious honing phase. The problem they face is that pesky Apple keeps innovating. This makes iPod a moving target. So Microsoft needs to wait for the next round of iPod innovation before it does more honing. They need to wait and see what Apple does with this phone thing.
I think this explains why some of the details of Zune are so lame (see, for example, Looney Zune Decision Stifles Gift Sales). Microsoft does not want to sell too many Zunes too soon. They want a more stable target. Of course, the more Apple innovates with iPod, the more it pulls resources away from unleashing OS X against Windows, which is good for the Softies...
Copyright © 2007 Philip Bookman
Technorati: Business Strategy, Clone-and-Hone, Zune, Microsoft.
Labels: Business Strategy, Clone-and-Hone, Microsoft, Zune
posted by Phil Bookman at 12:30 PM
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