What Happens When Huge Companies Continually Make Stupid Mistakes?

Let's face it: Apple (NAS: AAPL) is one profitable company. Sure, it's had its ups and downs -- which company hasn't? But seriously, people, Apple has changed the way we interact with technology, and it's poised to continue that streak. No, it wasn't the first on the scene with a smartphone, but once the iPhone hit the market, people went nuts buying them. I know. I heart my iPhone.

And when a company is as profitable as Apple, it's not surprising that other companies want to mimic it in some aspects. But what happens when a company is so desperate to mimic another's identity that it loses its own? Case in point: Microsoft (NAS: MSFT) .

Wait: That's a Microsoft store?
Depending on your location, and how often you frequent your local mall, you may have noticed that Microsoft's stores have gotten a new look -- and by "new look," I mean they look like Apple stores. From the glass front with white trim, to the tables displaying MacBooks -- I mean PCs -- Microsoft is "revamping" its image. In fact, when I walked by one of the stores with my husband, we both did a double-take when we realized it wasn't an Apple store.

Now, I may not be a brand expert, but I'm guessing it's not a good sign when a company decides to rip off another's look to improve sales.

Before you throw your rotten apples ...
To be clear, I am not saying Microsoft is the same kind of company as Apple. Microsoft licenses its software to companies such as Samsung and Nokia (NYS: NOK) and is considered more of an applied software company. Apple doesn't sell its software and is more of a consumer-electronics company.

What I am saying, however, is that by so closely copying Apple, Microsoft is muddying its brand. And that, my Foolish friends, is not good.

No one wants a Folex
One of the things that makes a company a great investment for the long run is its brand. A strong brand leads to a strong customer base -- think Nike, Coca-Cola, and hey, Apple. A strong customer base leads to stronger sales and staying power --  -- something every investor can appreciate. So, by so closely copying Apple, Microsoft starts to look like the a Folex, a.k.a. a poor man's Rolex. And no one wants a Folex.

This isn't Microsoft's first mistake
If Microsoft's ripoff of Apple's look was the first blunder in its game, I'd be tempted to let it go. But it's not. Windows Vista, anyone? And who could forget Microsoft's purchase of Skype for $8.5 billion? Genius move there.

Oh, and then there's the Nokia partnership. It's speculated that Microsoft paid Nokia $250 million to run its software on the Lumia. However, the Lumia has been slow to sell, and Nokia is losing market share left and right. Add to that the announcement that Nokia is laying off an additional 10,000 employees (bringing the total layoff to 1 in 3), and you have the makings of a company in trouble. Ouch. Maybe not the best partner.

To be fair, Microsoft is still the big dog when it comes to applied software. But there have been more than a few mammoth companies taken down by stupid decisions -- banks spring to mind here -- and Microsoft's stupid decisions are costing the company both cash and image.

Foolish conclusion
I'm really hoping that someone at Microsoft sits up and takes notice of the stupidity running rampant over there. If not, I don't have much hope for Microsoft in the long run. After all, technology is all about innovation and user-friendliness -- two things Microsoft could use more of. Maybe Microsoft's new tablet, the Surface -- the Surface? Brilliant name there, guys -- will be a win. Not like it crashed during its first public demo, or anything. Oh, wait.

Still think Microsoft is a good investment? Want more information about key opportunities and risks facing Microsoft? Get a report by one of The Motley Fool's top equity analysts that does just that.

The article What Happens When Huge Companies Continually Make Stupid Mistakes? originally appeared on Fool.com.

Fool contributor Katie Spence is thinking about getting her iPhone surgically implanted. She doesn't own shares of any company mentioned above. Follow her on Twitter, @TMFKSpence. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and Microsoft and creating a synthetic covered call position in Microsoft. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story