MSFT
💻 Microsoft benefits from high switching costs due to widespread use of Microsoft Office in businesses.
🔄 Companies are reluctant to switch due to the cost and time of retraining employees and moving systems.
📈 This leads to high customer retention and the ability to increase prices annually.
@adriarivero:
“Microsoft has had an enormous return for its shareholders, and a large part of this is due to its competitive advantages in switching costs. Many companies use Microsoft Office in their operations, and workers are trained and accustomed to these applications. Companies don’t unsubscribe because the cost of switching is too high. A company that has been using the Microsoft system for years will be reluctant to change, as it would have to spend days moving the system and retraining workers, losing money and time. Therefore, the cost of switching is higher than the potential benefit of the change, and that is why Microsoft has high customer retention and is able to increase prices every year.”
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