In this course, you will experience the final segment of a multi-year integrated case study that offers you the opportunity to apply the knowledge gained in the course and throughout the program to a real-world situation. The case study weaves together practical application with doctoral research by requiring that the business decisions made regarding the case study be supported by current or seminal research. In this assignment, you use research to develop three potential strategic actions for the business case. Instructor feedback about your proposed strategic actions will inform your Topic 5 assignment.
Use the following information to ensure successful completion of the assignment:
- Refer to “MGT-830 Integrated Case Study” located in the Course Add-Ons for this course.
- Instructors will be using a grading rubric to grade the assignments. It is recommended that learners review the rubric prior to beginning the assignment in order to become familiar with the assignment criteria and expectations for successful completion of the assignment.
- Doctoral learners are required to use APA style for their writing assignments. The APA Style Guide is located in the Student Success Center. An abstract is not required.
- This assignment requires that at least three scholarly research sources related to this topic, and at least one in-text citation from each source be included. Support for decisions should include appropriate current (within the last three years) or foundational, peer reviewed, and professional research.
- You are required to submit this assignment to LopesWrite. A link to the LopesWrite technical support articles is located in Class Resources if you need assistance.
Review the information in “MGT-830 Integrated Case Study.” This includes narrative information as well as financial and supporting documentation.
Write a paper (1,000-1,250 words) that suggests potential strategic actions relevant to the business case presented in “MGT-830 Integrated Business Case.” Include the following in your paper:
- A 1-2 sentence summary of the management opportunities inferred from the case.
- A discussion with rationales supported by research and theory for at least two viable strategic actions that address management opportunities inferred from the case. How do the mission, vision, and core values of Purple Cloud influence the viable options?
College of Doctoral Studies MGT-830 Integrated Case Study
In this course, you will interact with the final segment of a multi-year, integrated case study experience. This part of the case study focuses on economic issues and related ethical decisions.
The Case For decades, the United States has been an economic and political world leader. However, the rise in economic and political power of other nations such as China, Japan, and India continues to threaten the position of the United States as a world leader. In the midst of this political and economic uncertainty, Marie Preston rose to the role of CEO of Purple Cloud through a brilliantly staged organizational coup that forced out co-founder A. Nathan Tecnoti shortly after cofounder Chris Christianson resigned. Preston garnered the favor of the Board of Directors who shared her vision that the company needed to continue to expand as a global organization present in many countries with a strong coordinated brand. This vision included retaining a single corporate office responsible for global strategy emphasizing sales volume, cost management, and efficiency. Despite a prevailing atmosphere of economic uncertainty, Preston has convinced the Board of Directors to broaden the business strategy of this global, by developing new products for new markets and developing enhanced services to support those new products. Preston and the Board believe that although the company has traditionally marketed a consumer-focused security product, larger opportunities exist if the company creates a new product to address the increasing number of global security breaches encountered by business clients. To accomplish this, Preston has proposed adding a new product to expand the product line beyond its current consumer focus and meet the specific needs of business clients. The introduction of this product will facilitate Purple Cloud’s entry into global business markets. However, data to support or refute the decision is uncertain. Further, the introduction of this type of product will concurrently require expanding the global enterprise to enhance customer support. Nonetheless, introduction of this product positions Purple Cloud to revolutionize both the cybersecurity industry and the customer service industry. The potential for increased revenue is appealing, but global expansion while concurrently developing a new product is risky. Nonetheless, Preston took the liberty of borrowing over $100M in anticipation of product line development and global expansion without consulting the board or members of the executive management team. Organizational As an organization, Purple Cloud is currently centrally managed. This organizational structure has worked well for the company and adequately supported its marketing emphasis on product sales to consumers. A relatively small staff engineered the initial acquisition of the product which, due to the elegance of design, has resulted in an extremely profitable company. Working with centrally located staff has streamlined communication and mitigated most of the managerial issues often cited when working across nationalities and cultures. Preston has taken Purple Cloud from a $100MM organization, to a $500MM organization with a customer support group in India. Through months of intense discussions regarding the global expansion of Purple Cloud, Preston strongly advocated the entry into India over China and Mexico which rounded out the top three choices for potential expansion. Knowing the expansion of the product line would likely create a need for enhanced customer service and seeing the potential to leverage the current customer service and software development infrastructures in place in India, Preston convinced the Board that expansion into India was the best choice. Together, Preston and the Board agreed on the necessity for superior customer service 24 hours a day, every day of the year as critical for the new business customers. Of course, this would benefit their current consumer customers as well. To accomplish this goal means invoking strategies to overcome the common stigma of customer service based in India. So, Purple Cloud leaders identified the need to develop comprehensive training programs with compensation packages that included professional development at the university level with the hope of motivating the entire organization to higher levels of professionalism. However, this remains a challenge as Purple Cloud has little experience in customer service and customer service training. Marketing In terms of its marketing, Purple Cloud has carefully employed social media to both provide support and market its consumer product since its inception. However, as a company, they have no expertise in marketing directly to business. Preston is considering a jump into cyber risk evaluation, which could be the distribution vehicle for the new product, but that is only one avenue under consideration. So, the introduction of a business-oriented product carries an increased risk as the marketing team must quickly hire skilled staff members or learn new strategies that will effectively reach the business market. Data Analysis Purple Cloud has grown rapidly and has collected an extensive amount of consumer data. The data gathered include the following: · Demographic Data for Every Retail Customer · Country · State/Province · Language · E-mail · Personal · Work · Job Title · Employer Information · Company Name · Company Tax Status (e.g. for profit, non-profit, etc.) · Company Size · Revenue · Employees · Company Social Media Presence · Customer Social Security Number · Support Center Call Information · Type of Question · Duration of Call · Sophistication/Complexity of Question · Frequency of Calls from Same Customer · Overall Customer Satisfaction Rating at Call Completion · Call Country of Origin · Call Language The data collected could readily support both the efforts of the marketing department and the decisions necessary for Preston and the Board to consider. For example, Preston is considering a jump into professional services by providing cyber risk evaluation, which could be the distribution vehicle for the new product, but the data to make that decision has not been collected, cleaned, and analyzed. The amount of data grows every day, but key executives still tend to rely on their own perspectives which are sometimes based on outdated industry knowledge or personal experience and instinct. Further, the data gathered is not always validated, and the predictive and prescriptive models are not always properly selected as the simple success of the original product has not required the company to fully mature in its use of data analysis. Product Development Purple Cloud leaders hope the transition to business cybersecurity products is realistic as data breaches in social media and credit reporting agencies continue to escalate (the trending increase of instances is well over 160% in the past few years) and their hope of capturing the market hinges on the rapid development and production of a new product. Since Purple Cloud acquired its current product several years ago as a fully developed product, the company has neither experience nor expertise in the technical and financial aspects of creating the product development department, establishing a design plan and timeline, and executing the design plan for creating the new software. However, an additional advantage to expanding into India rather than Mexico or China was the vast numbers of computer programmers and software developers who were already producing cutting-edge software products. Global Sales Security breaches no longer occur just in the United States; they occur throughout the world. While this may provide an excellent business opportunity for those in the cybersecurity/cyber risk business, it can also be extremely risky. Companies seeking global expansion often fail to consider cultural differences, intellectual property ownership, language, taxation, business standards, and other factors such as the executive time/commitment needed to maintain close working relationships with employees thousands of miles away. Initially designed for consumer purchase Purple Cloud is now looking to produce a new product suitable for the cybersecurity needs of large corporations in order to expand their market and dominate the global cybersecurity industry. However, in order to do this Purple Cloud has to more effectively manage its offices in India to adequately sell and support the new product for the corporate customer. The company’s limited experience with corporate sales creates a challenge, though. Global Operations Purple Cloud has already entered the global market by opening a customer support department in India. This action was initiated to reduce support costs while simultaneously establishing the foundation to expand its support operations globally to accommodate customers across time zones. With the expansion into corporate cybersecurity/cyber risk, a more robust external customer service operation is required. Preston and the Board are considering adding new organizational components to the India operations to leverage the existing skill sets of the India staff and provide superior customer service, technical support, and product development. Question to Consider: What strategic path should Purple Cloud take in the leadership/management/organizational structure of the company to ensure success? Do the mission, vision, and core values of the company need to be updated? Background Information Mission, Vision, Core Values Mission Purple Cloud exists to provide quality protection products to ensure client online security. Vision Safe movement in the cloud for all applications. Core Values Security Honesty Reliability Teamwork Efficiency Member Biographies Maria Preston, Chief Operational Officer (CEO) Preston is responsible for driving profitable growth and creating operational excellence. She has an excellent track record of innovation and creating excellence in the operational division. Preston oversees the national and global supply chain of the company. Her innovative approach to problem solving has put her at the top of her industry in her previous organizations and now with Purple Cloud where she is charge with innovating operational processes for maximum efficiency. Preston’s previous experience shows she has held leadership roles in IT and manufacturing. She has worked with a variety of companies in Silicon Valley and is known for creating partnerships that reshape and create cross-functionality for the organization. Preston holds a B.A. in economics and an M.B.A. in business administration.
Organizational Chart Purple Cloud Structure Financial Statements Purple Cloud Projected Income Statement Purple Cloud Inc. Income Statement Years Ending December 31 % of Revenue% of Revenue Previous This Year*Previous**This Year** Revenues: Subscription Software 78,000,000$ 341,989,000$ 78.0%68.1% Service and Support22,000,000 160,243,000 22.0%31.9% Total Net Revenue100,000,000$ 502,232,000$ 100.0%100.0% Cost of Net Revenue: Subscription Software 18,000,000 77,333,000 18.0%15.4% Service and Support7,000,000 25,780,000 7.0%5.1% Total Cost of Net Revenue25,000,000$ 103,113,000$ 25.0%20.5% Operating costs: Sales and Marketing15,000,000 65,652,000 15.0%13.1% General and Administrative8,000,000 91,423,000 8.0%18.2% Research and Product Development7,000,000 14,000,000 7.0%2.8% Amortization of Intangibles3,250,000 25,075,000 3.3%5.0% Total operating costs33,250,000$ 196,150,000$ 33.3%39.1% Operating Profits41,750,000$ 202,969,000$ 41.8%40.4% Depreciation 1,350,000 1,350,000 1.4%0.3% Earnings Before Interest and Taxes (EBIT)40,400,000$ 201,619,000$ 40.4%40.1% Interest Expense- 7,500,000 0.0%1.5% Other Income (Loss)-$ -$ Earning Before Taxes (EBT)40,400,000$ 194,119,000$ 40.4%38.7% Taxes @ 35%14,140,000 67,941,650 14.1%13.5% Net Income26,260,000$ 126,177,350$ 26.3%25.1% Foregin Currecy Gain (Loss)(535,500) (2,356,125) Adjusted Income25,724,500$ 123,821,225$ Shares Outstanding6,000,000 14,000,000 Earnings Per Share4.38$ 9.01$ Stock Price 71.00$ 245.00$ Price to Earnings Ratio16 27 Notes: * Project Financial Statements ** Common Size Statement shows Income Statement Items Percentage of sales
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