Case Problem 1

Background Information:

Global Software Group (GSG), a publicly traded software services company, is experiencing slowing growth and lagging stock performance. While its international business is thriving, the U.S. operations, constituting over a third of sales, are underperforming. GSG aims to restore top-line growth in the U.S. and has enlisted A.T. Kearney to develop a strategy.

Exhibit:

Product Group

U.S. Revenue ($M)

Customer Base

Growth

Universal Desktop Software

$477

Individuals and Businesses

Low Potential

Productivity Pack

$1,566

    

Business Infrastructure Suite

$145

Businesses Only

High Potential

Business Solutions Suite

$1,378

    

Total

$3,566

    

Analysis:

  • Recognize opportunity in the "business" product groups, with a focus on BIS and BSS for growth.
  • Identify specific opportunities within the "business" products to drive strategy.

Case Problem 2: Market Segmentation for GSG

Background Information:

GSG historically segmented the market by product. However, there is a hypothesis that alternative, more meaningful segmentation methods exist.

Exhibit:

Market Segment

2005 GSG Revenue ($B)

2005 Software Spend ($B)

2005 IT Services Spend ($B)

Total IT Spend ($B)

Small- & Medium-Sized Businesses

$0.7

$9.3

$53.5

$62.8

Large Corporations

$1.2

$20.3

$60.2

$80.5

Analysis:

  • Explore logical segmentation structures, considering variables like vertical markets, business vs. consumer, geographies, and buying behaviors.
  • Request data on revenue growth projections for each business segment.
  • Small businesses appear as a better target for GSG, with substantial growth projections.

Case Problem 3: Prioritizing Small Business Targets

Data :

Industry

# of Businesses

IT Spend ($B)

Agriculture

967

$1.1

Manufacturing

483

$7.3

Telecom and Utilities

69

$3.3

Business Services

1,538

$7.6

Analysis:

  • Concentrate efforts on industries with the highest spend per business, prioritizing sectors like Telecom over others.

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Conclusion and Recommendation:

GSG should shift from a product-based to a customer-segment-based view, focusing on the small-business segment for growth. The recommendation includes:

  • Emphasizing the small-business segment due to its high growth rates, less competitive nature, and historical neglect.
  • Prioritizing strategy within the small business segment, with a focus on industry verticals like telecom for targeted efforts.

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