GL BAL CORPORATE DIVERSIFICATION

1. GL BAL CORPORATE DIVERSIFICATION PACE EMBA CYCLE 10, MODULE 8

2. MSFT Global Diversification: Analysis and Recommendations project

3. The Scenario Your consulting group has been hired by a subcommittee of the Board of Directors of MSFT MSFT wants to expand into new global product markets. You will report on: What product markets should be considered What global market(s) should be considered

4. MSFT’s Five Divisions • Windows & Windows Live: Windows product family; relationships with pc manufacturers; online software and services through Windows Live. • Server and Tools: Software server products, services and solutions;Microsoft Consulting Services. • Online Services: Online advertising platform; online information offerings such as Bing and MSN portals. • Microsoft Business: Microsoft Office suites, desktop programs, servers, and services and solutions; Microsoft Dynamics; Unified Communications business solutions. • Entertainment and Devices: Xbox video game system, Mediaroom, mobile and embedded device platforms, Surface computing platform, Windows Automotive.

5. Categories of Diversification • Related diversification: new business consistent with firm’s current businesses (synergy) • Unrelated diversification: new business outside of firm’s current businesses (autonomous) • Domestic diversification: all operations based in the home country • Global diversification: at least one operational area is based in a foreign country

6. Four Types of Diversification

7. MSFT Global Diversification: Analysis and Recommendations deliverables

8. 1. Resource Analysis of MSFT Corp. • Tangible resources • Intangible resources • Human resources • Capabilities • Weaknesses • Implications

9. 2. Market Analysis of Each Division • Industry overview, e.g., market size and scope, market segmentation, key success factors • Macro analysis • Industry (5 forces) analysis • Windows & Windows Live: operating systems and mobile operating systems markets • Server and Tools: global server market, software development tools market • Online Services: online advertising industry • Microsoft Business Division: enterprise software industry • Entertainment & Devices Division: global gaming industry

10. 3. Competitor Analysis • Products and markets • Strengths and weaknesses • Areas of multimarket activity between MSFT and the competitor • Conclusions about MSFT’s ability to succeed against major competitors

11. 4. Visual of Multimarket Activity • Visual demonstration of the areas of multimarket activity between MSFT and competitors • Choice of • multipoint competitor chart and/or • strategic group map • One for each division

12. 5. Product Market Recommendations • 2 or 3 diversification recommendations • Rationale for recommendations • Industry attractiveness • MSFT’s potential for sustainable competitive advantage • Strategic benefit to MSFT (e.g., synergies, control of value chain)

13. 6. Recommended Mode of Entry • Recommend modes of diversification for each diversification recommendation • Acquisition • Equity alliance • Nonequity alliance • Other • Defend choice • Characteristics of new business venture • Past successes/failures

14. 7. Accounting Implications • 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.    • No calculations

15. Presentation Requirements • Presentation must begin with an Executive Summary • Slide 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 presentation • Include research findings relevant to your conclusions; present implications along with facts • Exclude research findings irrelevant to your conclusions and recommendations

16. Briefing Book • Briefing book includes: • Set of presentation slides • Full resource analysis • Full macro analysis • Full 5 forces analysis • Briefing book does not include: • Full text of articles you have used • Unorganized notes • Early drafts of anything

17. Learning Exercises, Grading, Policies, Calendar Beyond the project

18. Learning Exercises • LE1: Modes of Entry (Ellen and Kevin) • LE2: Business Portfolio Matrix and Portfolio Theory (Ellen) • LE3: IFRS and Multinational Financial Statements(Bobbie)

19. Peer Reviews • There are two • Get them in on time • They go to your facilitator and to me • Instructions are on the form. Read them.

20. Grading • Project: 35% • Learning exercises: 45% (15% each) • Exam: 20%

21. Late Policy • Work is due at midnight of the due date on your module calendar. • Work that is up to two days late will be accepted but will be reduced by a half grade after one day and a full grade after two days. • Work that is more than two days late but is handed in before the presentation will receive a grade of 60%. • Work that is not handed in will receive a zero.

22. Citation Policy • If an assignment is submitted without appropriate citations for source material I will give it back to you and the 2-day late clock will start ticking. • If the assignment is submitted a second time without citations I will give it back to you and the over-2-day late clock will start ticking. • If the LE is submitted a third time without citations you will receive a zero.

23. Calendar