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MMICC 2009 - 3rd Place - UC Berkeley
 

MMICC 2009 - 3rd Place - UC Berkeley

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MMICC 2009 - 3rd Place - UC Berkeley MMICC 2009 - 3rd Place - UC Berkeley Presentation Transcript

  • Christina Ting | Jenny Cheng | Michael Chen Golden Bear Consulting Leading New Opportunities for Growth
  • Agenda
    • Current Situation
    • Objective
    • Options
    • Recommendation
    • Timeline
    • Impact Analysis
    • Conclusion
    Current | Objective | Options | Recommendation | Impact | Timeline
  • Company Background Current Markets
    • Cambridge, MA based IT Consulting firm
    • Founded 1984 by MIT grad Jonathan Kutchins
    • Operates 10-12 large projects at any one time
    • Annual revenue of $15-25 million
    Financial Services Healthcare Government Higher Education Staffing Current business model supports diversity of work Current | Objective | Options | Recommendation | Timeline | Impact US: 80 Consultants EGS: 80 Consultants ESI: 80 Developers PR: 9 Consultants
  • Exeter’s SWOT
    • Strengths
    • Positioned as high quality service provider
    • High rate of success in projects
    • Great customer service
    • Weaknesses
    • Capacity constraints
    • Expansion based on word of mouth and referrals
          • Small company relative to competitors
    • Opportunities
    • Global Expansion
    • Offshoring cuts costs
    • Projects available for expansion
    • Threats
    • Competition from key software companies
    • Affected by economic downturn; several companies cut IT spending
    Exeter’s strong business model and credibility allows for large potential of growth Current | Objective | Options | Recommendation | Timeline | Impact
  • Current Issues and Objectives Objective: Increase Exeter growth rate and consulting capabilities Current | Objective | Options | Recommendation | Timeline | Impact Economic downturn
    • Companies notably cutting back on IT spending
    • Business sector most heavily affected
    Client selection
    • Unclear vision with which to base project selection
    Capacity constraint
    • Heavy demand for senior consultants
    • Perception that junior consultants lack expertise
  • Options and Alternatives Best growth strategy is to expand an existing sector and enter a new sector market In line with Exeter values Potential for growth Enter into new sector market Expand into new countries Hire new senior consultants Ease of implementation Risk Developing larger projects help achieve revenue growth Opportunity for Exeter to provide services to new clients Several competitors specialize internationally Limited growth Expand through existing clients and referrals within industry Large barriers to entry Stays in existing sectors Difficulty in entering new market, but mitigated by sales team Quality of consultants not guaranteed Competition; Exeter cannot excel in new demands Competition; Exeter cannot excel in new demands Minimal risk given current success Exeter seeks growth potential in current markets New countries provide new clients Increased manpower at high cost Historical market expansion shows growth Poor Good Expand existing sector Current | Objective | Options | Recommendation | Timeline | Impact
  • Overarching Vision New Sector Opportunities Global Expansion Internal Restructuring Enter into untapped sectors with large growth potential Capitalize on the increase in worldwide IT consulting spending Revise implementation of business model to lead to efficiency in projects Expansion Plans Expansion opportunities allow Exeter to surpass projected goals Current | Objective | Options | Recommendation | Timeline | Impact
  • Recommendation Exeter should expand its educational practice both domestically and internationally, and create an energy sector to begin servicing renewable energy companies Executive Summary Strategy leads Exeter to expand on sectors with global and innovative potentials Current | Objective | Options | Recommendation | Timeline | Impact
  • Recommendation
    • Net Revenue of $70.38 million in 5 years
    • More than triple growth rate by 2013
    • Establish new long-term client relationships
    Delivered Results Current | Objective | Options | Recommendation | Timeline | Impact Proposed strategy expected to surpass growth goals and lead Exeter on profitable path
  • Recommendation Capture new projects Education Domestic International Expand into India universities
    • Exeter for Energy
    • Target renewable energy firms
    Energy + Staffing Changes
    • Current Offshoring
    • Develop junior consultants
    • Hire new staff
    Exeter should expand their Education sector, create a new Energy sector, supported through internal restructuring Other Sectors
    • Maintain current with healthcare and government
    + Supported By Current | Objective | Options | Recommendation | Timeline | Impact NPV: $361.18 Million NPV: $180.61 Million NPV: $466.08 Million
  • Education Expansion Domestic Global
    • Emphasize long term relationship with current colleges and universities
    • Expand to goal of 50% of top 100 colleges and universities through word of mouth and sales force
    • Expand into India’s higher education institutions
    • Utilize ESI to preserve face-to-face interaction and efficiency
    Current | Objective | Options | Recommendation | Timeline | Impact Education expansion achieved by expanding domestically, and entering India market
  • Education: Domestic Strategy
    • Exeter has worked on 100+ colleges and universities (only 2% of market)
    • Education sector IT spending growing at CAGR of 6.0%
    • 4,140 colleges and universities in the US
    Strategy
    • Reallocate 20% of Financial Services Sales Force to focus on Education sector
    • Create target goal of servicing 50% of top 100 US colleges and universities by 2013
    • Sales force to highlight previous experience with prestigious universities:
    Current | Objective | Options | Recommendation | Timeline | Impact Utilize experience with prestigious universities to expand to 50% of top 100 schools in US
  • Education: Global Expansion Strategy Number of Universities Presence in the Region Education Expenditures (as % of GDP) Total Education Expenditures (in Millions) Why India? Current | Objective | Options | Recommendation | Timeline | Impact Global expansion into India higher education is the easiest and best opportunity for growth 6.5% 8.5% 6.1% 3.0% $192,790 $13,761 $129,930 $97,530 Yes No No No 8225 59 130 2236
  • Education: Global Expansion Strategy Strategy
    • Penetrate the higher education market via Exeter’s existing ESI in India.
    • Build a strong blending team in India by hiring more talent:
      • US junior consultants
      • India service developers
    • 8,225 colleges and universities in India:
    • In 2007, 13.93 million students were enrolled in the institutions of Higher Education in India and growing at a rate of 32.9%
    Source: Educational Statistics 2004-2005.MHRD 2007 Current | Objective | Options | Recommendation | Timeline | Impact Utilize current ESI presence to penetrate top Indian colleges and universities
  • Energy Expansion
    • New & Growing Industry
    (2) Obama’s “New Energy for America” Plan
    • Potential to lead and specialize in untapped IT consulting for renewable energy companies
      • Favorable government spending, less averse to economy
      • Creation of 5 million “green collar jobs” = growing need for IT support
    Why Renewable Energy? Current | Objective | Options | Recommendation | Timeline | Impact Renewable Energy sector proven to be a lucrative new opportunity, less averse to economy
  • Exeter for Energy Campaign
    • Become IT service leader in areas with the highest growth
    • Enable Exeter to sustain its long-term growth
    • Recruit senior consultants experienced in renewable energy
    • Specialized in R&D and CRM IT services to differentiate Exeter
    • Redirect VP of sales’ effort towards renewable energy sector
    • “ You’re already busy saving the world, leave your IT problems in our hands ”
    Focus on Wind & Solar Power Companies Hire Industry Specialist Launch a Marketing Campaign Current | Objective | Options | Recommendation | Timeline | Impact Enter Energy sector by targeting renewable energy, hiring a specialist, and marketing vision
  • Economic downturn
    • Companies notably cutting back on IT spending
    • Business sector most heavily affected
    Client selection
    • Unclear vision with which to base project selection
    Capacity constraint
    • Heavy demand for senior consultants
    • Perception that junior consultants lack expertise
  • HR Changes Credibility in all consultants New Staffing Training and New Team Structure New Title System Rename “Junior Consultant” Hire new consultants each year per growth rate Offer mid-level consultants to lead projects Offer larger teams at reduced cost Dedicate training to younger consultants Impact Credibility + Long-term development = Full efficiency of entire company Exeter needs to adjust its staffing structure to ensure full efficiency of entire company Current | Objective | Options | Recommendation | Timeline | Impact Investment in new hires
  • Economic downturn
    • Companies notably cutting back on IT spending
    • Business sector most heavily affected
    Client selection
    • Unclear vision with which to base project selection
    Capacity constraint
    • Heavy demand for senior consultants
    • Perception that junior consultants lack expertise
  • Offshoring Maintain blended team approach Expand upon developers in India relative to growth Currently: 10-20% of project work completed offsite Offshoring developers to India provides integration and supports Exeter’s initiatives Current | Objective | Options | Recommendation | Timeline | Impact
  • 4 Projects New Software Implementation
    • Must divert resources
    • Unfamiliar with project
    • Can lose business to comp
    • Low profit case
    • Unclear objectives
    • Require team of 20 consultants
    • Give comp info on Exeter
    • Hard to convince
    • Good relationship & trust
    • If successful, will lead to referrals
    • Defeat vendor competition
    Assessment and Software
    • Very demanding client
    • Want very senior people
    • Disloyal to Exeter
    • Lose to competitors
    System Development
    • Consulting firm has own methodology
    • Project risks
    Type Advantages Disadvantages Large University Private University Consulting Firm New Software Implementation
    • Project similar to Tulane
    • Large Client
    • Potential for more projects
    • All in-house
    • Large client
    • Long-term client
    • New sector expansion
    • Good fit and simple project
    • Get insight on their work
    • Manager best match to client
    Selecting projects in-line with Exeter’s growth leads to future development Current | Objective | Options | Recommendation | Timeline | Impact
  • Economic downturn
    • Companies notably cutting back on IT spending
    • Business sector most heavily affected
    Client selection
    • Unclear vision with which to base project selection
    Capacity constraint
    • Heavy demand for senior consultants
    • Perception that junior consultants lack expertise
  • Implementation Timeline 2009 2010 2011 2012 2013 Education Energy HR Tulane and Large University Project Expand existing domestic projects India Expansion Develop new client base in US Research energy IT needs/training Exeter for Energy campaign Implement projects Contract with new clients Rename titles On-the-job training Hire new staff Industry training Education, Energy, and Staffing goals to be implemented over 5-year period Current | Objective | Options | Recommendation | Timeline | Impact
  • Costs The Bottom Line These costs will drive Exeter’s growth in both the short-term and long-term.
    • Talent Pool Expansion
    • Marketing Campaign
    • Employee Growth & Advancement
    Current | Objective | Options | Recommendation | Timeline | Impact Global expansion into India higher education is the easiest and best opportunity for growth
  • Financials Selecting projects in-line with Exeter’s growth leads to future development Gross Profit | Expansion Costs 2009 2010 2011 2012 2013 Current | Objective | Options | Recommendation | Timeline | Impact
  • Financials All projections show a higher EBIT than no change
  • Impact Analysis The Ultimate Impact With our recommendation, revenue growth rate will more than triple in year 2013, and NPV will exceed $738 million . The Bottom Line These gains will drive Exeter’s growth in both the short-term and long-term. With recommended initiatives, Exeter is expected to gain substantial revenue growth Current | Objective | Options | Recommendation | Timeline | Impact
  • Conclusion Expanding in education and energy allows Exeter to surpass growth goals Exeter surpasses goal Expansion Education Energy Human Resources Expand globally Broaden scope Ensure complete brand image
    • Increase US sales
    • Expand into India
    • Create new sector
    • Exeter for Energy campaign
    • Train young consultants
    • Increase staff
    Current | Objective | Options | Recommendation | Timeline | Impact
    • Net Revenue of $70.38 million in 5 years
    • More than triple growth rate by 2013
    • Establish new long-term client relationships
    • Q & A
  • Appendix Financials Expenditures Sheet Expenditure Assumptions Income Statement w/o Recommendation Income Statement w/ Recommendation NPV w/o Recommendation NPV w/ Recommendation NPV Education NPV Energy Best/ Expected/ Worst Case Scenarios India’s Higher Education System India’s Current IT Competitive Landscape Obama New Energy for America US Spending by Vertical Market Risks and Mitigation Resources
  • Financials
  • Expenditures Sheet
  • Expenditure Chart & Assumptions Assumptions
    • Senior consultant:$150,000/year, salary growth rate = 2%
    • Indian developers: $25,000/year per employee, 1 new hire per % growth
    • Junior consultant:$65,000/year per employee, 1 new hire per % growth
    • Employee training day: $5,000/time, 6 times/year
  • Income Statement Projection – without recommendation
  • NPV – without recommendation
  • Best / Expected / Worst case scenarios – with recommendations
  • Revenue & NPV Projections – Education
  • Revenue & NPV Projections – Energy
  • India’s Higher Education System
    • Colleges for General Education: 10,377
    • Colleges for Professional Education: 3,201
    • Universities: 364
    • Total Colleges and Universities : 13,942
    • Estimated number of colleges and universities Exeter can penetrate: 8,225
    • In 2006-07, an estimated 13.93 million students were enrolled in the institutions of Higher Education and growing at a rate of 32.9%
    • Source: Educational Statistics 2004-2005.MHRD 2007
  • India: Current IT Consulting Landscape Web 2.0/Online Businesses Financial Services High Tech Presence in Education sector
  • Obama’s New Energy for America Plan
    • The Obama-Biden comprehensive New Energy for America plan will
    • Create 5 million Green Collar jobs
    • Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future.
    • Within 10 years save more oil than we currently import from the Middle East and Venezuela combined.
    • Put 1 million Plug-In Hybrid cars -- cars that can get up to 150 miles per gallon -- on the road by 2015, cars that we will work to make sure are built here in America.
    • Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025.
    • Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050.
  • Risks & Mitigations Risks Mitigations
    • Encounter language and cultural barrier in the Indian market
    • Limited expansion capabilities based on referrals
    • Difficult to meet clients’ demand of star consultants
    • Lack expertise in the renewable energy sector
    • Unable to differentiate itself as the leader in the new sector
    • Leverage on Exeter’s existing blended team approach
    • Employ sales teams and reallocate sales force efforts
    • Provide clients with incentives to include junior consultants
    • Hire experienced senior consultants from energy sector
    • Specialize in R&D and CRM for the renewable energy sector
  • Exeter Group Services
    • Assessment, Planning, and Strategy
    • Custom Application Development
    • System Integration
    • Business Intelligence and Data Warehousing
    • Supply Chain Solutions
    • Customer Relationships Management
  • US Spending by Vertical Market
    • Market CAGR% 2006-11
    • Utilities 7.6%
    • Government 3.9%
    • Education 6.0%
    • Construction 3.6%
    • Transportation 5.1%
  • Sources
    • http://www.studyabroad-cis.com/index.php?country = china&section = ed_system
    • http://energy.sourceguides.com/businesses/byGeo/US/byS/byS.shtml
    • http://www.worldwatch.org/files/pdf/renewables2007.pdf
    • http://www.indiastudycenter.com/univ/college-statistics.asp