As the Germans learned in WWII, after bombing Pearl Harbor, it is very difficult to fight a competitive battle on multiple fronts. Valuable resources get spread too thin. The best people aren't all aligned to a common strategy. Communications becomes more difficult.
The recent Google Chrome OS announcement is going to create an interesting battle for a number of reasons:
- Technology innovation (Desktop OS vs. an Internet OS)
- Freemium vs. Premium Pricing Models
- How many battles can either company sustain and still be successful in their core businesses?
- How much is Google willing to put into their non-search businesses in order to keep Microsoft from gaining traction in search?
- How much is Microsoft willing to put into Core OS (Windows) or the Internet version (lower margins) to maintain those cash flows?
And of course the most important question for MBA students - do each of these projects create a positive NPV? (ok, being sarcastic)
It must be fun to sit in the war rooms of either Google or Microsoft and plot how to block or take the other guys market (on a huge scale). Of course we do need to continually ask ourselves, are any of these actions add real value to their customers, or are they potentially opening themselves up to new competition?
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