GL BAL
CORPORATE DIVERSIFICATION
PACE EMBA
CYCLE 10, MODULE 8
MSFT Global Diversification: Analysis and Recommendations
PROJECT
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
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.
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
Four Types of Diversification
Related
Businesses
Unrelated
Businesses
Domestic
Markets
Related Domestic
Diversification
Unrelated Domestic
Diversification
Global
Markets
Related Global
Diversification
Unrelated Global
Diversification
MSFT Global Diversification: Analysis and Recommendations
DELIVERABLES
1. Resource Analysis of MSFT Corp.
Tangible resources
Intangible resources
Human resources
Capabilities
Weaknesses
Implications
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
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
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
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)
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
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
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
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
Learning Exercises, Grading, Policies, Calendar
BEYOND THE PROJECT
Learning Exercises
LE1: Modes of Entry (Ellen and Kevin)
LE2: Business Portfolio Matrix and Portfolio Theory
(Ellen)
LE3: IFRS and Multinational Financial
Statements(Bobbie)
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.
Grading
Project: 35%
Learning exercises: 45% (15% each)
Exam: 20%
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.
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.
Calendar