MBA 713: Corporate Diversification Strategy



MBA 713: Global Corporate Diversification StrategyCycle 10, Module 8Director: Ellen WeisbordFeb. 19 – May 7Project Description Project ScenarioThe Board of Directors of Microsoft Corp. (MSFT) has hired your consulting firm to assess its global strategy and identify global markets for strategic growth. You will present to the subcommittee your analysis of MSFT vis-à-vis its competitors in strategic product markets and you will recommend viable opportunities for diversification into new global product markets. Microsoft CorporationMicrosoft develops and markets software and services for businesses and individuals. Microsoft consists of the following five divisions:Windows & Windows Live Division: Includes the Windows product family and is responsible for relationships with personal computer manufacturers as well as online software and services through Windows Live. (Operating systems market, mobile operating systems)Server and Tools Division: Software server products, services and solutions, and Microsoft Consulting Services. (Global server market, software development tools market)Online Services Division: Consists of an online advertising platform with offerings for publishers and advertisers, and online information offerings such as Bing and the MSN portals and channels. (Online advertising industry)Microsoft Business Division: Includes Microsoft Office suites, desktop programs, servers, and services and solutions; Microsoft Dynamics; and Unified Communications business solutions. (Enterprise software industry) Entertainment and Devices Division: Consists of the Xbox video game system, Mediaroom, mobile and embedded device platforms, Surface computing platform, and Windows Automotive. (Global gaming industry)DiversificationDiversification can be either related or unrelated.In related diversification, new businesses share resources or activities with current businesses, i.e., there is synergy among the business divisions.In unrelated diversification, new businesses have no relationship (excluding financial) with the firm’s current businesses, i.e., there is no sharing of resources or activities.Diversification can be either domestic or global expansion.In domestic diversification, operations of new businesses are based in the home country.In global diversification, at least one operational area of a new business (sales, production, etc.) is based in a foreign country.These choices result in the following four types of diversification: Related Product MarketsUnrelated Product MarketsDomestic Expansion1. Related Domestic Diversification2. Unrelated Domestic DiversificationGlobal Expansion3. Related Global Diversification4. Unrelated Global DiversificationFor this project, you will concentrate on related global diversification.Deliverables A resource analysis of MSFT Corp. This section should include:Tangible resourcesIntangible resourcesHuman resourcesCapabilities WeaknessesImplicationsA market analysis of each of MSFT’s 5 major divisions. For each division, provide:Industry overview, e.g., market size and scope, market segmentation, key success factorsMacro analysisIndustry (5 forces) analysis (It is up to you to identify industries appropriately. You may choose to define markets differently than I have done below.)Windows and Windows Live: operating and mobile operating systems marketsServer and Tools: global server market; software development tools marketOnline Services: online advertising industryMicrosoft Business: enterprise software industry Entertainment and Devices: global gaming industryA competitor analysis, to include:Products and marketsStrengths and weaknessesRecent actions, e.g., capital investments, strategic partnerships, pricing changesAreas of multimarket activity between MSFT and the competitorImplications for MSFT For each division, a multipoint competitor chart and/or strategic group map that provides a visual demonstration of the areas of multimarket activity between MSFT and competitors.Two or three recommended global product markets into which MSFT should consider diversifying. Your rationale should include industry attractiveness, MSFT’s potential for competitive advantage, strategic benefit to MSFT (e.g., synergies, control of value chain), competitor considerations, profit potential and any other strategic issues you have uncovered in your analyses. Discussion of the mode of diversification MSFT should use to enter the product/market, e.g., organic growth, acquisition, equity alliance/joint venture, nonequity alliance. Defend your recommended mode of entry by addressingCharacteristics of new business venturePast successes/failuresAccounting implications (without calculations) of your global market strategy. Discuss whether your recommended target markets use IFRS or local GAAP, and address whether IFRS will affect MSFT’s financial statements based on your recommendations.Consider how your financial statements will be affected by foreign tax rates and currency translations.???PresentationBegin with an Executive SummarySlide titles must indicate the main point of the slide. Read in a series, they should tell your story.Conclusions and recommendations must be supported by issues addressed in the main body of the presentationPresentation SlidesAt the beginning of your presentation, distribute a copy of your PowerPoint slides to each reviewer and professor. These copies can be in monochrome.Briefing BookProvide Jim Parker and me with a briefing book (on a CD-ROM) that contains your presentation slides and the supporting documentation for your deliverables. Do not include full-text copies of materials you reviewed unless there is a reason for MSFT top management to read an original document (unlikely). Properly cite your sources. There is a citation style guide in Course Documents. I should be able to easily find your source from the information in the citation. ................
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