deloitte case study competition
DESCRIPTION
This is my team's final slide deck for the 2013 Deloitte Case Study competition at Carnegie Mellon.TRANSCRIPT
Deloitte Consulting LLP
Presenting the Pinnacle UniverseNiko Byron, Jeremy Chiang, Jacob Correa, Anuj Desai, Henry Neale, and Soham Sengupta
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Pinnacle Games Inc.
Strengths-7,000 employees-Second largest gaming company-Extensive experience in the console gaming industry
Weaknesses-Major decline in revenues YoY (30%)-Limited exposure to non-console gaming markets-Low employee retention
Opportunities-Major possibilities in emerging markets-Acquisition of up and coming developers-Domestic markets have opportunities
Threats-Continued decline in demand for console games-Outperformance from competitors-Inability to operate in new markets
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Pinnacle Games Inc: Porter’s Five Forces
Startups
Companies already in cloud, with potential to move
PC/ Console Retail
Partner gaming studios
SDK providers
Non-interactive entertainment
Non-digital entertainment
Activision Blizzard
Electronic Arts
Zynga
Deloitte Consulting LLP
How can the cloud help Pinnacle?
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The Cloud
Revolutionary Technology - Cloud technologies have enabled companies to manage data with unprecedented effectiveness
The Cloud is out there now
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The Cloud: Strengths and Weaknesses
Strengths
Pay as you go pricing, no upfront investment
Flexible and extendable capacity
Easier provisioning of resources
Allows for more efficient global deployment
Weaknesses
More vulnerable to security threats than in-house servers
Increased chance of lost access to data
Decreased access to support functions
More expensive in the short run
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Why Amazon Web Services?
Industry leader
Advanced firewall
Data privacy/encryption
Full/snapshot backups
Data persistency
99.999% availability
Compatible with most OS and programming languages
Extensive support services
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Pinnacle Universe
Cross-platform compatibility
Access via single sign-on
Hosts proprietary and third-party content
Scalable expansion into emerging markets
Social media integration (e.g. Facebook)
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We are hereProject kick-off
Culture InitiativesInitial survey10% timeTelecommutingGain sharingAgile development
Internal Knowledge RepositoryCode base with version control platformVPN/SSH compatible
Cloud Solution ImplementationAcquire social/mobile gaming IPPinnacle Universe
Implementation Roadmap
Target Annual Revenue for 2018: $2.6 billion
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How do we pay for the capital?
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Debt Capital Markets vs Equity Capital Markets
Issuing Bonds
Upsides Downsides
Maintain control over the company
Risk of bankruptcy if there is default
Easier to monitor liabilities
Issuing Stocks
Upsides Downsides
Lessens the threat of bankruptcy
Give up control of part of the company
Could potentially upset shareholders
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Choose Debt
Easy monetary policy makes issuing bonds an attractive way to raise capital
Huge upside from switching to cloud
Risk of default is extremely minute
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Change Management
Operations
Shift toward agile development
Adapting to changing requirements
Increase pipeline fluidity
Low cost, high sales, frequent market shifts
Employees
Employee support
Adjustment to rapid release timelines
Increase awareness of social trends
Smooth integration of acquired employees
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Why our solution?
Reduces project costs, increases output volume and productivity
Reduce upfront costs with demand-based pay-as-you-go cost model
Enable worldwide accessibility to software via internet connection
Eliminate cost of hardware and licensing fees
Minimizes need for support regarding hardware and software issues
Focuses resources on creating innovative new products
Deloitte Consulting LLP
Expansion into Emerging Markets
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Africa
700 million mobile broadband subscribers and counting
4-5 years behind in popular cell phone models
Number of smart phones will double in next 4 years
Consistent economic growth leads to growing middle class
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Increase of Mobile Phone Usage in Africa
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Acquisition Target: Maliyo Games Nigerian company with 15
employees that creates games customized for African consumers
Firm has been featured in various publications
Nigeria has an easier climate for foreign ownership and investment
India Smart phone users expected to
increase from 70 million to 400 million by 2016
800 million mobile phone users and counting
One of the most rapidly growing middle classes in the world
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Acquisition Target: Rolocule
Small firm of under 50 employees
Produces games that are customized to the general Indian population
Presents some risks with acquisition potential
Award winning company featured by IGN, TechCrunch, Business Insider, and Engadget
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Costs and Benefits
Costs Maliyo: $5,000,000 (comparable
transaction similar to Blammo acquisition by Glu Mobile)
Rolocule: $10,000,000 (comparable transactions similar to Chilingo acquisition by EA)
Pinnacle Universe: $10,000,000 (Battle.net 2.0)
Benefits Estimated revenue increase of
roughly 40% (Battle.net 2.0)
Exponential increase of user base
Potentially tapping into market of mobile users five times the size of current focus
Internal culture changes should improve efficiency of firm
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Getting the Board to Buy In
Resistance to the Cloud: Explain benefits of cloud technology and challenge their previous concerns
Discuss security concerns
Explain new potential markets
Discuss improvements in efficiency due to Internal Knowledge Repository
Talk about examples of firms successfully implemented this technology
Scalable growth potential