Management says Microsoft faces Wal-Mart disaster: re-implementation of light innovation

Lead: Adam Har, a leading American administrator, wrote in the Forbes online edition that despite the growth of Microsoft's earnings, the company is now facing a "Wal-Mart Disaster"-"re-implementation and light innovation". Here is the article: Apple's quarterly profit overtook Microsoft for the first time in 20 years. This week, Microsoft's market capitalisation reached $215 billion trillion, and Apple's market capitalisation reached $365 billion trillion, nearly 70% higher than the former.　　The difference is that two companies have different ways of managing change in terms of growth and the lack of growth. According to data released by the American Association of Conference Board, growth stall is fatal to the company. A growth stall is fatal to a company. When a company stalls, it cannot even sustain 2% per cent growth by 93%, while 75% will have a decline, zero growth, and 70% will lose at least half of the market. This is because the market has changed, the goods sold by the merchant is not the real demand of consumers.　　No matter how hard management tries to regain the lost market, it is hard to get consumers back. For Microsoft, the company has been completely unable to stop the market from moving towards smartphones and tablets:　　The PC total market fell 2% in the last quarter. • Consumer PC shipments fell 8% in the last quarter. Notebook sales plummeted 40%.　　Growth stall, profit will be meaningless. While Microsoft's earnings have grown, the reason is not to sell products that consumers really need. Microsoft is stuck in a "Wal-Mart disaster" that repeats its past successes and hopes to regain its previous results, even in a changing market. At growth stall companies, management supports profitability by cutting sales, marketing, new product development budgets, and outsourcing.　　While Microsoft is earning more than the last quarter, it is not because consumers are so interested in their products. The growing stall of corporate management is trumpeting the growth of its profits, even if the company's revenues are flat or falling. But sensible investors understand that sustained efforts to "make profits" will not create long-term value.　　They hope to create "real" profits by selling new products and demand that consumers crave. Sales of mobile phones rose 20% in the last quarter, with Apple taking a 14% per cent share of the market, according to IDC. In the mobile phone market, Apple's profits are staggering: Apple's spectacular growth creates a multiplier effect in the company's growth phase, and investors want management to use profits (and cash) to boost growth opportunities. Investors can benefit from it because the values are mixed.　　In companies that stall growth, investors will be better off if companies pay dividends, so investors can invest in growth markets. But for companies such as Microsoft, where growth has stalled, they will not do so because the company is spending all its cash on defending the old business model and trying to stop the market from turning. Microsoft InvestmentA lot of money has been invested to protect the PC industry, even if the advantages of the new solution are obvious. In 2009, Microsoft spent 8 times times as much money on research and development as Apple, but only on upgrades to old operating systems and office automation. Nearly 9 billion dollars are spent on non incremental demand.　　As a result, Microsoft's revenue growth stall and costs rise. Late entry and high cost in addition, Microsoft's cost increases are also due to its relatively late pace in other markets, which makes it difficult to make profits. Late entry, high cost although Microsoft and Nokia reached strategic alliances to enter the smartphone and tablet market, it was too late. At this stage the market leader is Apple and Google, they are ahead. For Microsoft, "catch-up" is costly, such as online services, and investment is huge, especially when Google and Apple have strengthened their strengths and increased their competitiveness. Microsoft's core PC business has been falling. (Yi Tong)