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College of Doctoral Studies
DBA-815 Integrated Case Study
In this course, you will interact with Part III of a multi-year,
integrated case study experience. This part of the case study
focuses on economic issues and related ethical decisions.
The Case
Purple Cloud was founded 15 years ago and has grown from a
start-up security company to a small, but well-respected
competitor in the rapidly growing security sector. The founder,
A. Nathan Tecnoti, is a visionary leader who forecasted the
need to develop robust software products that protected both
individuals and companies. As the Internet grew, so did
Tecnoti’s business. He innovated rapidly, but Tecnoti could not
keep up with the ever-changing technologies and was often
outmaneuvered by larger companies who had larger and more
proficient technical staffs and marketing budgets. Tecnoti began
seeking a way to accelerate product development so he could
increase market share and take advantage of new market
opportunities. It is for this reason that Tecnoti developed an
acquisition strategy to rapidly acquire companies that offered
promising security technologies.
Invoking that strategy, Purple Cloud acquired ABCTech during
a positive economic outlook. Video press coverage of this event
can be viewed at https://lc.gcumedia.com/mgt805/business-
acquisition-press-release-video/v1.1/. The ABCTech product
acquired by Purple Cloud was completely different than any
other software security application offered in the market. The
product offered an elegant solution implemented with a single
update to the user's computer operating system thereby
bypassing the need to distribute daily updates to address new
security threats. The simplicity of the solution circumvented
both the necessity to acquire capital to build or acquire
extensive infrastructure and the requisite addition of high-
priced support staff; while the company now has approximately
150 employees, only about 40% of these are full-time.
However, some time has passed since the finalization of the
acquisition, and the economic outlook is significantly different.
There are currently five other competitors in Purple Cloud’s
market. Although Purple Cloud’s product is perceived to be the
best in its class of products, competitors offer a relatively good
product that is half the price of the Purple Cloud product. While
rumors of continued expansion are fueling stock prices, Tecnoti
and the leadership team of Purple Cloud are keenly aware that
what was booming is no longer looking as strong, and the
overall economic outlook has some analysts concerned.
Specifically, the current economic trend is not favorable for
U.S. markets. Over the past several years, with financial
deregulation and the easing of economic legislation, there has
been an exponential increase in mortgage lending, reminiscent
of the mid-2000s. Unemployment has increased significantly
from its 5.0% low of a few years ago, rising 1.5% in the last
quarter alone. If this trend continues, unemployment is
projected to break the 8% mark this year. With this quick rise in
unemployment there is an onset of fear that economic and
financial stability may be in jeopardy. Rumors suggest the
United States may be headed toward another mortgage industry
decline. Should this occur, it is expected that a halt in overall
consumption would follow. Looking back, the recession of
2007-2009 began with an almost 10 trillion-dollar housing
bubble and a loss of 8.4 million jobs, which created strain and
uncertainty around the globe. It is unsure if the current markets
will be able to weather such a situation again.
The U.S. stock market is also showing signs of a technology
bubble, as stocks are being bought and sold at prices that are
not supported by actual financials. The continuing rise in cyber
security stock indicates people are fearful of future cyber
attacks. However, it is uncertain if investments made today will
realize the promised returns. In addition, there is mixed trading
as the volatility of the stock market continues. One day the
market is up near record trading, and the next it loses 10%, but
never coming to a balance. The overall feeling is that the bull is
about to be overtaken by the bear as traders look to key
economic indicators. The fear is a massive sell-off on the
horizon that could take the both the housing market and
technology portfolios with it.
With the uncertainty in the stock market, the U.S. Federal
Reserve is analyzing its process for establishing interest rates
which have seen a steady increase over the past couple of years
in an effort to fight off inflation. The current market volatility
and easy lending regulations would point toward another
interest rate increase. However, the broader economic outlook is
not favorable as unemployment continues to rise, and the
insecurity is creating discord within reserve members. It has
taken many years to regain the country’s confidence following
the 2007-2009 recession, and the Federal Reserve does not want
to have to revisit the low interest rates it invoked to spark and
maintain an economic comeback. Thus, there is speculation
surrounding what they will do in the current economic climate.
Internationally, geopolitical conflicts are the status quo. Europe
is still striving to determine its place in the global economy as
France joins Great Britain in their exit from the European
Union, and Greece, Ireland, and Spain remain unsure of their
economic outlook. China and India are ramping up their
economies with better human resources, while South America
and Africa are experiencing continued political unrest.
Nonetheless, the economic outlook in Europe, Africa, and Asia
remains more optimistic than in the U.S. At present,
approximately 20% of the revenue of Purple Cloud is from
international markets.
Purple Cloud needs to formulate a strategy to determine an
appropriate course of action when considering the potential of a
rapidly changing economic climate.
Questions to Consider
What specific actions should the company take, if any, to assure
its sustainability in the volatile market described? Why?
To what extent, if at all, should the ongoing acquisition strategy
of Purple Cloud, as described above, change? Explain.
What ethical considerations arise from the response options
described? How should Purple Cloud leaders manage those
considerations?
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
Purple Cloud
A. Nathan Tecnoti, Founder and CEO
Tecnoti is a visionary. He started his company to help protect
the privacy of individuals and small companies. With this focus,
he has built a successful small business. However, with just
$50M in revenue, he is often out-maneuvered by larger
companies who have the marketing resources and technology to
block his expansion into this market. Tecnoti’s experience with
previous organizations allowed him to establish quick responses
to market situations, improve customer relevance, and create
better partnerships in the digital industry, especially in cloud-
based models.
With a B.S. in business and an M.S in information technology,
Tecnoti brings to the company significant experience working
globally as well as a strong IT background. In addition, Tecnoti
has extensive experience in the industry prior to Purple Cloud
where he worked in the roles of senior vice president of
technology for two other large corporations. He was responsible
for growth, marketing, and the companies’ office operations.
Tecnoti also has experience in licensing of software and
managing sales in the United States and Europe for previous
corporations.
Maria Preston, Chief Operational Officer
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.
Willie Taylor, Chief Financial Officer (CFO)
Taylor comes to Purple Cloud with an abundance of experience
in the financial strategy and operations of IT companies. He is
tasked with creating value for shareholders, upholding a
balanced portfolio, and leading the growth initiatives of the
company. He believes integrity is critical in creating a
successful financial strategy.
Taylor's previous experience comes from working in business,
technology, operations, and finance for companies in Silicon
Valley. He has had experience partnering with organizations to
focus on long-range strategic planning, forecasting, and
working with budgets as high as $50M. Taylor has a B.S. in
finance and an M.S. in business with a specialization in finance.
He also has extensive experience in mergers and acquisitions,
financial planning, and profit and loss.
Thunder Thompson, CEO and Co-Founder
Thompson is co-founder of ABCTech. As the CEO of ABCTech,
Thompson focuses on the company’s growth and technology
strategy. Thompson has a B.S. degree in computer programming
and a passion for creating safe data products and applications.
He brings more than 10 years of experience in enterprise IT
software, data analytics, security, and knowledge of cybercrime.
Thompson also has experience in technical operations and cloud
and data platforms. He is new to being an entrepreneur, but is
excited at the prospects of making a difference in the
technology world with his company’s safe data products.
Thompson believes in ABCTech’s vision: A world protected
from cybercrime and personal security breaches.
Chris Christianson, COO and Co-Founder
Christianson is the co-founder and COO of ABCTech. He is also
the company’s chief marketing officer. Christianson is
responsible for growing the company’s revenue. He has 12 years
of experience in HTML, Java, Python coding, and product
development, and is trained in software development, product
development, and product marketing. Christianson holds a B.S.
degree in computer programming and has certification in
marketing and product development. He too is new to
entrepreneurship, but has a passion to see ABCTech and its
products succeed. Christianson believes the company can
achieve its mission: To create an affordable security product for
every person.
Herbert VanderLugt, Marketing Director
VanderLugt has extensive experience in marketing. Before
joining ABCTech, he worked in Silicon Valley as head of
marketing operations for a large tech firm. VanderLugt has a
B.A. in business as well as an M.B.A from a prestigious
business school. He is also fluent both in writing code and in
website design. These skills complement his understanding of
ABCTech and its marketing needs within the tech industry.
Tom Englewood, Director of Customer and Techical Support
Englewood provides oversite of all the customer support and
technology issues for ABCTech. He has both a B.S. and an M.S.
in computer science. Englewood brings 30 years of experience
in the field of technology and customer service both at the
university level and in the corporate setting. He has experience
in enterprise applications, teaching, research and learning, user
support information security, infrastructure, and
communications.
Organizational Charts
Purple Cloud Structure
Charts
Stock Price
Outstanding Shares
Company Valuation
Revenue
Revenue Per Share
Price / Sales Ratio (P/S)
$54.25
7,000,000
$379,750,000
$54,250,000
$7.75
7.00
For additional information regarding price to sales ratios, see
http://www.multpl.com/s-p-500-price-to-sales.
Continues on next page.
Financial Statements
Purple Cloud Projected Income Statement*
* Notes:
Depending on the market elasticity, an economic downturn
could see revenue for Purple Cloud's products and services
increase or decline in the coming year.
A decline in revenue could necessitate a reduction in the
number of employees, particularly in sales, marketing and
general administration.
Purple Cloud Stock Prices v. Composite Stock Price
Purple Cloud Stock Price
45 38 51 Composite Tech Stock Value (Times 100)
52.1 54.17 55.2
Year
Purple Cloud Revenue and Stock Price
Revenue (millions of dollars)
46.1 50 54.25 Purple Cloud Stock Price
45 38 51
Year
Revenue and Interest Rate
Revenue (times ten million dollars)
4.6100000000000003 5 5.4249999999999998 Prime
Interest Rate (%)
3.5 3.75 4
Year
Revenue and Unemployment Rate
Revenue (times ten million dollars)
4.6100000000000003 5 5.4249999999999998
Unemployment Rate (%)
5.6 6.7 8.4
Year
Revenue Source
Business %
61 64 70 Consumer %
39 36 30
Year
© 2018. Grand Canyon University. All Rights Reserved.
Purple Cloud
Projected Interim Income Statement
For Year Ending December 31, 20XX
Prior Year End
Revenue
Subscription Software Revenue42,500,000$
ABC Product Line750,000
Professional Services11,000,000
Total Revenue$54,250,000
Cost of Goods
Customer Support$4,500,000
Hosting Expense$625,000
Professional Services$8,800,000
Total Cost of Goods Sold$13,925,000
Gross Profit$40,325,000
Gross Margin74%
Operating Expenses
Sales$14,400,000
Marketing$6,000,000
Product Development$9,250,000
General Administrative$2,100,000
Operating Expenses$31,750,000
One time acquisition expense$5,000,000
Total Operating Expenses$36,750,000
Net Income$3,575,000
Tax @ 30%$1,072,500
Profit$2,502,500
Case Study Paper
1
Unsatisfactory
0.00%
2
Less than Satisfactory
73.00%
3
Satisfactory
82.00%
4
Good
91.00%
5
Excellent
100.00%
100.0 %Criteria
5.0 %Summary of the Current Environment as Presented in the
Case
A summary of the current environment as presented in the case
is either missing or not evident to the reader.
A summary of the current environment as presented in the case
is included, but inaccurate or incomplete.
A summary of the current environment as presented in the case
is included, but focuses on minor rather than major themes and
ideas.
A summary of the current environment as presented in the case
is included and focuses on major themes and ideas.
A summary of the current environment as presented in the case
is included and thorough illuminating major themes and ideas
with rich detail.
5.0 %Summary of the Business Issue
A summary of the business issue is not presented.
A summary of the business issue is included, but inaccurate or
incomplete.
A summary of the business issue is presented, but does not
focus on the economic concerns of the case.
A summary of the business issue is presented and focuses on the
economic concerns of the case.
A summary of the business issue is thoroughly presented and
strongly focuses on the economic concerns of the case offering
rich detail.
15.0 %Review of at Least Two Potential Resolutions
A review of two potential resolutions is not presented.
A review of at least two potential resolutions is presented, but
resolutions are ill-conceived and illogical. No research support
is offered. The economic analysis is incorrect.
A review of at least two potential resolutions is presented, but
is cursory and lacking in depth. Resolutions may be viable but
appear hastily conceived and lack depth of thought. Research
support is limited and from dated resources. Appropriate
economic analysis is included but without definition of the
analysis and justification for use.
A review of at least two potential resolutions is presented,
logical, and thorough. Resolutions are viable, appear
moderately well-conceived, and are logical. Research support is
limited but from current resources. Appropriate economic
analysis in included with definition of the analysis but lacking
justification for use.
A review of at least two potential resolutions is thoroughly
presented with clear logic and rich detail. Resolutions are viable
and well-conceived and display exceptional depth of thought.
Research support is thorough and from current resources.
economic analysis is included with definition of the analysis
and justification for use.
15.0 %Discussion of the Ethical Implications of Each Option
and the Influence from the Mission, Vision and Core Values of
Purple Cloud Reinforces C.2.2: Recognize that values and ethics
are fundamental to business success and sustainability.
A discussion of the ethical implications of each option and the
influence from the mission, vision and core values of Purple
Cloud is not presented.
A discussion of the ethical implications of one option and the
influence from the mission, vision and core values of Purple
Cloud is presented, but inaccurate or illogical. No research
support is offered.
A discussion of the ethical implications of each option and the
influence from the mission, vision and core values of Purple
Cloud is presented, but is cursory and lacking in depth.
Research support is limited and from dated resources.
A discussion of the ethical implications of each option and the
influence from the mission, vision and core values of Purple
Cloud is presented and thorough. Research support is limited
but from current resources.
A discussion of the ethical implications of each option and the
influence from the mission, vision and core values of Purple
Cloud is thoroughly presented with rich detail. Research support
is thorough and from current resources.
15.0 %Recommended Resolution and Rationale Reinforces
C.2.3: Recommend the application of newly developed or
revised theories to specific business opportunities and
challenges and C. 2.5: Validate and advance business practice
through the appropriate application of business theory.
A recommended resolution and rationale are not presented.
A recommended resolution is presented, but the resolution is
not a resolution described earlier in the paper or is arguably not
the best resolution. A valid rationale for the recommendation is
not presented. No information of how the recommendation
influences the long-term economic health of Purple Cloud is
given. No research support is offered.
A recommended resolution is presented and is a resolution
described earlier in the paper. The rationale for the
recommendation is cursory and lacking in depth. Information of
how the recommendation influences the long-term economic
health of Purple Cloud is given but appears hastily conceived
and lacks depth of thought. Research support is limited and
from dated resources.
A recommended resolution is presented, logical, and thorough
and is a resolution described earlier in the paper. The rationale
for the recommendation is moderately well-conceived and
logical. Information of how the recommendation influences the
long-term economic health of Purple Cloud is given and appears
relatively well-conceived. Research support is limited but from
current resources.
A recommended resolution is thoroughly presented with clear
logic and rich detail. The rationale for the recommendation is
well-conceived and logical. Information of how the
recommendation influences the long-term economic health of
Purple Cloud is well-conceived displaying a thorough
understanding of the interconnected nature of business events.
Research support is thorough and from current resources.
5.0 %Discussion of Future Research that Could be Conducted
A discussion of future research that could be conducted is not
presented.
A discussion of future research that could be conducted is
presented, but ill-conceived and illogical.
A discussion of future research that could be conducted is
presented, but is cursory and appears hastily conceived lacking
depth of thought.
A discussion of future research that could be conducted is
presented, logical, and thorough. The discussion appears
moderately well-conceived and logical.
A discussion of future research that could be conducted is
thoroughly presented with clear logic and rich detail. The
discussion is well-conceived and displays exceptional depth of
thought.
10.0 %Integration of Instructor Feedback
Integration of instructor feedback is either missing or not
evident to the reader.
Integration of instructor feedback is vaguely attempted, but
does not address the majority of instructor comments and
suggestions.
Integration of instructor feedback is evident though it appears
as a disjointed, cursory addition. Most of the instructor
comments and suggestions are addressed.
Integration of instructor feedback is evident and relatively well
incorporated into the natural flow of the paper. All instructor
comments and suggestions are addressed.
Integration of instructor feedback is evident and meaningful. It
is seamlessly incorporated into the flow of the paper. All
instructor comments and suggestions are addressed.
10.0 %Synthesis and Argument
No synthesis of source information is evident. Statement of
purpose is not followed to a justifiable conclusion. The
conclusion does not support the claim made. Argument is
incoherent and uses non-credible sources.
Synthesis of source information is attempted, but is not
successful. Sufficient justification of claims is lacking.
Argument lacks consistent unity. There are obvious flaws in the
logic. Some sources have questionable credibility.
Synthesis of source information is present, but pedantic.
Argument is orderly, but may have a few inconsistencies. The
argument presents minimal justification of claims. Argument
logically, but not thoroughly, supports the purpose. Sources
used are credible. Introduction and conclusion bracket the
thesis.
Synthesis of source information is present and meaningful.
Argument shows logical progressions. Techniques of
argumentation are evident. There is a smooth progression of
claims from introduction to conclusion. Most sources are
authoritative.
Synthesis of source information is present and scholarly.
Argument is clear and convincing, presenting a persuasive claim
in a distinctive and compelling manner. All sources are
authoritative.
10.0 %Thesis Development and Purpose
Paper lacks any discernible overall purpose or organizing claim.
Thesis and/or main claim are insufficiently developed and/or
vague; purpose is not clear.
Thesis and/or main claim are apparent and appropriate to
purpose.
Thesis and/or main claim are clear and forecast the development
of the paper. They are descriptive and reflective of the
arguments and appropriate to the purpose.
Thesis and/or main claim are clear and comprehensive; the
essence of the paper is contained within the thesis.
5.0 %Mechanics of Writing
Mechanical errors are pervasive enough that they impede
communication of meaning. Inappropriate word choice and/or
sentence construction are used.
Frequent and repetitive mechanical errors distract the reader.
Inconsistencies in language choice (register), sentence
structure, and/or word choice are present.
Some mechanical errors or typos are present, but are not overly
distracting to the reader. Correct sentence structure and
audience-appropriate language are used.
Prose is largely free of mechanical errors, although a few may
be present. A variety of sentence structures and effective
figures of speech are used.
Writer is clearly in command of standard, written, academic
English.
5.0 %APA Format
Required format is rarely followed correctly. No reference page
is included. No in-text citations are used.
Required format elements are missing or incorrect. A lack of
control with formatting is apparent. Reference page is present.
However, in-text citations are inconsistently used.
Required format is generally correct. However, errors are
present (e.g. font, cover page, margins, and in-text citations).
Reference page is included and lists sources used in the paper.
Sources are appropriately documented though some errors are
present.
Required format is used, but minor errors are present (e.g.
headings and direct quotes). Reference page is present and
includes all cited sources. Documentation is appropriate and
citation style is usually correct.
The document is correctly formatted. In-text citations and a
reference page are complete and correct. The documentation of
cited sources is free of error.
100 %Total Weightage
Running head: CASE STUDY POTENTIAL RESOLUTIONS
1
CASE STUDY POTENTIAL RESOLUTIONS
5
Case Study Potential Resolutions
There are missing elements in your paper. Be sure to carefully
review the directions for the assignment and address each of the
stated requirements. As an example, what are the suggested
resolutions? You were to identify two, with a focus on the
financial aspects. The reference requirements are also not met.
Be sure to use a ragged right margin as required by APA 6.0.
Case Study Potential Resolutions
The paper discusses Purple Cloud, an organization that has been
in existence for the last 10 and a half decades. The company has
grown through several issues which have affected its growth
and development, and decreased its competitive status. As a
growing security firm, Purple Cloud has ABC-Tech as software
to deal with security challenges the company faces at times. The
software needs little upgrading and improvement, and because
of its flexibility. The software increases the organization’s
opportunity to become a major force in the industry. The paper
discusses the economic issue of Purple Cloud, and focuses on
the different strategies that Purple Cloud may pursue based on
theory and research support.
Summary of the Economic Issues
Purple Cloud failed to keep up with changes that took place in
the field of technology, and larger organizations took the
company’s share in the industry, based on larger marketing
budgets, and better expertise. The economic status of the United
States’ markets has changed tremendously, and has experienced
financial deregulation
. Economic legislation has also continued to ease, and the
situation has led to an exponential increase in mortgage lending.
Unemployment is a major issue, and the rate of unemployment
has influenced the aspect of organizations fearing the economy
because of the instability of the financial industry. The
mortgage industry could decline in the coming years, and the
trend could lead to a halt of general buyer consumption. The
housing bubble resulted in the loss of several billions of dollars,
and the United States economy continues to show signs of
technological decline.
Vision and Mission of Purple Cloud
Purple Cloud is an organization that provides online software
protection products to consumers. The vision revolves around
the safe movement for different applications operating in the
market, and the organization’s focus includes efficiency,
security, reliability, and teamwork.
The company believes in developing competitive pricing for
their
products to avoid the aspect of it dwindling. The general prices
in the market are fluctuating at an alarming rate. The market
also experiences security issues, such as cybercrime and general
hacking. However, Purple Cloud strives to develop the best
products, at affordable pricing, and may be accessed by
consumers. The market is losing data at an alarming rate as a
result of unauthorized access to systems. The situation has seen
Purple Cloud using flexible systems, such as ABC-Tech. The
market is also volatile due to factors, such as mixed trading.
With the aspect of building a strong customer related service,
Purple Cloud ensures it keeps track of its customers, and their
activities through a real-time system. The market changes
without any warning, a major factor that makes it hard for a
company, such as Purple Cloud to operate well in its domains.
Purple Cloud has influenced its management
to look forward when it comes to creating a better market for
the product. Increasing market uncertainties have made it
challenging for technological portfolios and the housing market
to grow. As a security firm, the company has created a positive
approach to initiate development in its different departments,
and increase its capacity to grow in the market. The stock
market is also uncertain, which affects the interest rates.
Inflation is on the rise, a major factor that influences sales in
the market.
The economic outlook of the company is slightly different for
its business development. Management has to make the right
strategies to allow the company fit the changing nature of the
market. The insecurity level in the global market continues to
create discord. The market is also at the state of unrest, a major
factor that sparks economic challenges. Employing the right
organizational structure influences Purple Cloud to define its
strategic direction. The horizontal business and organizational
structure of the company has made it possible to change its
market position (Wachowicz, 2010). Purple Cloud continues to
build quality products for the market throughout the global
markets. The customer engagement approach developed by
management has eliminated negative factors that limit growth in
the company.
So, what are your two recommendations?
Conclusion
In relation to the above, it is evident that many problems are
influencing the business of Purple Cloud in a negative manner.
The geopolitical landscape is another major factor that
influences the status quo. France and Britain have already
joined the quest to eliminate their position in the European
Union, affecting the economic growth of the European Union.
Countries, such as Spain, Ireland, and France are uncertain
about their economic outlook. However, countries like China
and India are better targets for the development of the company.
The above factors act as a negating factor for the global security
status. However, through good marketing strategies, and the
proper vision, mission, and values, the company has defined its
developmental path. It has acquired the capacity to grow and
beat the competition.
References
Wachowicz, T. (2010). Decision support in software supported
negotiations. Journal of Business Economics and Management,
11(4), 576-597.
�Per APA, use a ragged right margin.
�Rewrite for clarity. Markets cannot experience, as they are not
human. This is an example of anthropomorphism.
�A company is a single entity, so use “it” or “the company”
�Anthropomorphism
�Purple Cloud and its management are the same.
�Please refer to the deliverables for this assignment. One
reference that is not within the last three years does not meet
the criteria.
  College of Doctoral StudiesDBA-815 Integrated Case Study.docx

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  • 1. College of Doctoral Studies DBA-815 Integrated Case Study In this course, you will interact with Part III of a multi-year, integrated case study experience. This part of the case study focuses on economic issues and related ethical decisions. The Case Purple Cloud was founded 15 years ago and has grown from a start-up security company to a small, but well-respected competitor in the rapidly growing security sector. The founder, A. Nathan Tecnoti, is a visionary leader who forecasted the need to develop robust software products that protected both individuals and companies. As the Internet grew, so did Tecnoti’s business. He innovated rapidly, but Tecnoti could not keep up with the ever-changing technologies and was often outmaneuvered by larger companies who had larger and more proficient technical staffs and marketing budgets. Tecnoti began seeking a way to accelerate product development so he could increase market share and take advantage of new market opportunities. It is for this reason that Tecnoti developed an acquisition strategy to rapidly acquire companies that offered promising security technologies. Invoking that strategy, Purple Cloud acquired ABCTech during a positive economic outlook. Video press coverage of this event can be viewed at https://lc.gcumedia.com/mgt805/business- acquisition-press-release-video/v1.1/. The ABCTech product acquired by Purple Cloud was completely different than any other software security application offered in the market. The product offered an elegant solution implemented with a single update to the user's computer operating system thereby bypassing the need to distribute daily updates to address new security threats. The simplicity of the solution circumvented both the necessity to acquire capital to build or acquire
  • 2. extensive infrastructure and the requisite addition of high- priced support staff; while the company now has approximately 150 employees, only about 40% of these are full-time. However, some time has passed since the finalization of the acquisition, and the economic outlook is significantly different. There are currently five other competitors in Purple Cloud’s market. Although Purple Cloud’s product is perceived to be the best in its class of products, competitors offer a relatively good product that is half the price of the Purple Cloud product. While rumors of continued expansion are fueling stock prices, Tecnoti and the leadership team of Purple Cloud are keenly aware that what was booming is no longer looking as strong, and the overall economic outlook has some analysts concerned. Specifically, the current economic trend is not favorable for U.S. markets. Over the past several years, with financial deregulation and the easing of economic legislation, there has been an exponential increase in mortgage lending, reminiscent of the mid-2000s. Unemployment has increased significantly from its 5.0% low of a few years ago, rising 1.5% in the last quarter alone. If this trend continues, unemployment is projected to break the 8% mark this year. With this quick rise in unemployment there is an onset of fear that economic and financial stability may be in jeopardy. Rumors suggest the United States may be headed toward another mortgage industry decline. Should this occur, it is expected that a halt in overall consumption would follow. Looking back, the recession of 2007-2009 began with an almost 10 trillion-dollar housing bubble and a loss of 8.4 million jobs, which created strain and uncertainty around the globe. It is unsure if the current markets will be able to weather such a situation again. The U.S. stock market is also showing signs of a technology bubble, as stocks are being bought and sold at prices that are not supported by actual financials. The continuing rise in cyber security stock indicates people are fearful of future cyber attacks. However, it is uncertain if investments made today will realize the promised returns. In addition, there is mixed trading
  • 3. as the volatility of the stock market continues. One day the market is up near record trading, and the next it loses 10%, but never coming to a balance. The overall feeling is that the bull is about to be overtaken by the bear as traders look to key economic indicators. The fear is a massive sell-off on the horizon that could take the both the housing market and technology portfolios with it. With the uncertainty in the stock market, the U.S. Federal Reserve is analyzing its process for establishing interest rates which have seen a steady increase over the past couple of years in an effort to fight off inflation. The current market volatility and easy lending regulations would point toward another interest rate increase. However, the broader economic outlook is not favorable as unemployment continues to rise, and the insecurity is creating discord within reserve members. It has taken many years to regain the country’s confidence following the 2007-2009 recession, and the Federal Reserve does not want to have to revisit the low interest rates it invoked to spark and maintain an economic comeback. Thus, there is speculation surrounding what they will do in the current economic climate. Internationally, geopolitical conflicts are the status quo. Europe is still striving to determine its place in the global economy as France joins Great Britain in their exit from the European Union, and Greece, Ireland, and Spain remain unsure of their economic outlook. China and India are ramping up their economies with better human resources, while South America and Africa are experiencing continued political unrest. Nonetheless, the economic outlook in Europe, Africa, and Asia remains more optimistic than in the U.S. At present, approximately 20% of the revenue of Purple Cloud is from international markets. Purple Cloud needs to formulate a strategy to determine an appropriate course of action when considering the potential of a rapidly changing economic climate. Questions to Consider What specific actions should the company take, if any, to assure
  • 4. its sustainability in the volatile market described? Why? To what extent, if at all, should the ongoing acquisition strategy of Purple Cloud, as described above, change? Explain. What ethical considerations arise from the response options described? How should Purple Cloud leaders manage those considerations? 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 Purple Cloud A. Nathan Tecnoti, Founder and CEO Tecnoti is a visionary. He started his company to help protect the privacy of individuals and small companies. With this focus, he has built a successful small business. However, with just $50M in revenue, he is often out-maneuvered by larger companies who have the marketing resources and technology to block his expansion into this market. Tecnoti’s experience with previous organizations allowed him to establish quick responses to market situations, improve customer relevance, and create better partnerships in the digital industry, especially in cloud- based models. With a B.S. in business and an M.S in information technology,
  • 5. Tecnoti brings to the company significant experience working globally as well as a strong IT background. In addition, Tecnoti has extensive experience in the industry prior to Purple Cloud where he worked in the roles of senior vice president of technology for two other large corporations. He was responsible for growth, marketing, and the companies’ office operations. Tecnoti also has experience in licensing of software and managing sales in the United States and Europe for previous corporations. Maria Preston, Chief Operational Officer 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. Willie Taylor, Chief Financial Officer (CFO) Taylor comes to Purple Cloud with an abundance of experience in the financial strategy and operations of IT companies. He is tasked with creating value for shareholders, upholding a balanced portfolio, and leading the growth initiatives of the company. He believes integrity is critical in creating a successful financial strategy. Taylor's previous experience comes from working in business, technology, operations, and finance for companies in Silicon Valley. He has had experience partnering with organizations to focus on long-range strategic planning, forecasting, and working with budgets as high as $50M. Taylor has a B.S. in
  • 6. finance and an M.S. in business with a specialization in finance. He also has extensive experience in mergers and acquisitions, financial planning, and profit and loss. Thunder Thompson, CEO and Co-Founder Thompson is co-founder of ABCTech. As the CEO of ABCTech, Thompson focuses on the company’s growth and technology strategy. Thompson has a B.S. degree in computer programming and a passion for creating safe data products and applications. He brings more than 10 years of experience in enterprise IT software, data analytics, security, and knowledge of cybercrime. Thompson also has experience in technical operations and cloud and data platforms. He is new to being an entrepreneur, but is excited at the prospects of making a difference in the technology world with his company’s safe data products. Thompson believes in ABCTech’s vision: A world protected from cybercrime and personal security breaches. Chris Christianson, COO and Co-Founder Christianson is the co-founder and COO of ABCTech. He is also the company’s chief marketing officer. Christianson is responsible for growing the company’s revenue. He has 12 years of experience in HTML, Java, Python coding, and product development, and is trained in software development, product development, and product marketing. Christianson holds a B.S. degree in computer programming and has certification in marketing and product development. He too is new to entrepreneurship, but has a passion to see ABCTech and its products succeed. Christianson believes the company can achieve its mission: To create an affordable security product for every person. Herbert VanderLugt, Marketing Director VanderLugt has extensive experience in marketing. Before joining ABCTech, he worked in Silicon Valley as head of marketing operations for a large tech firm. VanderLugt has a B.A. in business as well as an M.B.A from a prestigious business school. He is also fluent both in writing code and in website design. These skills complement his understanding of
  • 7. ABCTech and its marketing needs within the tech industry. Tom Englewood, Director of Customer and Techical Support Englewood provides oversite of all the customer support and technology issues for ABCTech. He has both a B.S. and an M.S. in computer science. Englewood brings 30 years of experience in the field of technology and customer service both at the university level and in the corporate setting. He has experience in enterprise applications, teaching, research and learning, user support information security, infrastructure, and communications. Organizational Charts Purple Cloud Structure Charts Stock Price Outstanding Shares Company Valuation Revenue Revenue Per Share Price / Sales Ratio (P/S) $54.25 7,000,000 $379,750,000 $54,250,000 $7.75 7.00 For additional information regarding price to sales ratios, see http://www.multpl.com/s-p-500-price-to-sales.
  • 8. Continues on next page. Financial Statements Purple Cloud Projected Income Statement* * Notes: Depending on the market elasticity, an economic downturn could see revenue for Purple Cloud's products and services increase or decline in the coming year. A decline in revenue could necessitate a reduction in the number of employees, particularly in sales, marketing and general administration. Purple Cloud Stock Prices v. Composite Stock Price Purple Cloud Stock Price 45 38 51 Composite Tech Stock Value (Times 100) 52.1 54.17 55.2 Year Purple Cloud Revenue and Stock Price Revenue (millions of dollars) 46.1 50 54.25 Purple Cloud Stock Price 45 38 51
  • 9. Year Revenue and Interest Rate Revenue (times ten million dollars) 4.6100000000000003 5 5.4249999999999998 Prime Interest Rate (%) 3.5 3.75 4 Year Revenue and Unemployment Rate Revenue (times ten million dollars) 4.6100000000000003 5 5.4249999999999998 Unemployment Rate (%) 5.6 6.7 8.4 Year Revenue Source
  • 10. Business % 61 64 70 Consumer % 39 36 30 Year © 2018. Grand Canyon University. All Rights Reserved. Purple Cloud Projected Interim Income Statement For Year Ending December 31, 20XX Prior Year End Revenue Subscription Software Revenue42,500,000$ ABC Product Line750,000 Professional Services11,000,000 Total Revenue$54,250,000 Cost of Goods Customer Support$4,500,000 Hosting Expense$625,000 Professional Services$8,800,000 Total Cost of Goods Sold$13,925,000 Gross Profit$40,325,000 Gross Margin74% Operating Expenses Sales$14,400,000 Marketing$6,000,000 Product Development$9,250,000 General Administrative$2,100,000 Operating Expenses$31,750,000 One time acquisition expense$5,000,000
  • 11. Total Operating Expenses$36,750,000 Net Income$3,575,000 Tax @ 30%$1,072,500 Profit$2,502,500 Case Study Paper 1 Unsatisfactory 0.00% 2 Less than Satisfactory 73.00% 3 Satisfactory 82.00% 4 Good 91.00% 5 Excellent 100.00% 100.0 %Criteria 5.0 %Summary of the Current Environment as Presented in the Case A summary of the current environment as presented in the case is either missing or not evident to the reader. A summary of the current environment as presented in the case is included, but inaccurate or incomplete. A summary of the current environment as presented in the case is included, but focuses on minor rather than major themes and ideas. A summary of the current environment as presented in the case is included and focuses on major themes and ideas.
  • 12. A summary of the current environment as presented in the case is included and thorough illuminating major themes and ideas with rich detail. 5.0 %Summary of the Business Issue A summary of the business issue is not presented. A summary of the business issue is included, but inaccurate or incomplete. A summary of the business issue is presented, but does not focus on the economic concerns of the case. A summary of the business issue is presented and focuses on the economic concerns of the case. A summary of the business issue is thoroughly presented and strongly focuses on the economic concerns of the case offering rich detail. 15.0 %Review of at Least Two Potential Resolutions A review of two potential resolutions is not presented. A review of at least two potential resolutions is presented, but resolutions are ill-conceived and illogical. No research support is offered. The economic analysis is incorrect. A review of at least two potential resolutions is presented, but is cursory and lacking in depth. Resolutions may be viable but appear hastily conceived and lack depth of thought. Research support is limited and from dated resources. Appropriate economic analysis is included but without definition of the analysis and justification for use. A review of at least two potential resolutions is presented, logical, and thorough. Resolutions are viable, appear moderately well-conceived, and are logical. Research support is limited but from current resources. Appropriate economic analysis in included with definition of the analysis but lacking justification for use. A review of at least two potential resolutions is thoroughly presented with clear logic and rich detail. Resolutions are viable and well-conceived and display exceptional depth of thought.
  • 13. Research support is thorough and from current resources. economic analysis is included with definition of the analysis and justification for use. 15.0 %Discussion of the Ethical Implications of Each Option and the Influence from the Mission, Vision and Core Values of Purple Cloud Reinforces C.2.2: Recognize that values and ethics are fundamental to business success and sustainability. A discussion of the ethical implications of each option and the influence from the mission, vision and core values of Purple Cloud is not presented. A discussion of the ethical implications of one option and the influence from the mission, vision and core values of Purple Cloud is presented, but inaccurate or illogical. No research support is offered. A discussion of the ethical implications of each option and the influence from the mission, vision and core values of Purple Cloud is presented, but is cursory and lacking in depth. Research support is limited and from dated resources. A discussion of the ethical implications of each option and the influence from the mission, vision and core values of Purple Cloud is presented and thorough. Research support is limited but from current resources. A discussion of the ethical implications of each option and the influence from the mission, vision and core values of Purple Cloud is thoroughly presented with rich detail. Research support is thorough and from current resources. 15.0 %Recommended Resolution and Rationale Reinforces C.2.3: Recommend the application of newly developed or revised theories to specific business opportunities and challenges and C. 2.5: Validate and advance business practice through the appropriate application of business theory. A recommended resolution and rationale are not presented. A recommended resolution is presented, but the resolution is not a resolution described earlier in the paper or is arguably not
  • 14. the best resolution. A valid rationale for the recommendation is not presented. No information of how the recommendation influences the long-term economic health of Purple Cloud is given. No research support is offered. A recommended resolution is presented and is a resolution described earlier in the paper. The rationale for the recommendation is cursory and lacking in depth. Information of how the recommendation influences the long-term economic health of Purple Cloud is given but appears hastily conceived and lacks depth of thought. Research support is limited and from dated resources. A recommended resolution is presented, logical, and thorough and is a resolution described earlier in the paper. The rationale for the recommendation is moderately well-conceived and logical. Information of how the recommendation influences the long-term economic health of Purple Cloud is given and appears relatively well-conceived. Research support is limited but from current resources. A recommended resolution is thoroughly presented with clear logic and rich detail. The rationale for the recommendation is well-conceived and logical. Information of how the recommendation influences the long-term economic health of Purple Cloud is well-conceived displaying a thorough understanding of the interconnected nature of business events. Research support is thorough and from current resources. 5.0 %Discussion of Future Research that Could be Conducted A discussion of future research that could be conducted is not presented. A discussion of future research that could be conducted is presented, but ill-conceived and illogical. A discussion of future research that could be conducted is presented, but is cursory and appears hastily conceived lacking depth of thought. A discussion of future research that could be conducted is presented, logical, and thorough. The discussion appears
  • 15. moderately well-conceived and logical. A discussion of future research that could be conducted is thoroughly presented with clear logic and rich detail. The discussion is well-conceived and displays exceptional depth of thought. 10.0 %Integration of Instructor Feedback Integration of instructor feedback is either missing or not evident to the reader. Integration of instructor feedback is vaguely attempted, but does not address the majority of instructor comments and suggestions. Integration of instructor feedback is evident though it appears as a disjointed, cursory addition. Most of the instructor comments and suggestions are addressed. Integration of instructor feedback is evident and relatively well incorporated into the natural flow of the paper. All instructor comments and suggestions are addressed. Integration of instructor feedback is evident and meaningful. It is seamlessly incorporated into the flow of the paper. All instructor comments and suggestions are addressed. 10.0 %Synthesis and Argument No synthesis of source information is evident. Statement of purpose is not followed to a justifiable conclusion. The conclusion does not support the claim made. Argument is incoherent and uses non-credible sources. Synthesis of source information is attempted, but is not successful. Sufficient justification of claims is lacking. Argument lacks consistent unity. There are obvious flaws in the logic. Some sources have questionable credibility. Synthesis of source information is present, but pedantic. Argument is orderly, but may have a few inconsistencies. The argument presents minimal justification of claims. Argument logically, but not thoroughly, supports the purpose. Sources used are credible. Introduction and conclusion bracket the
  • 16. thesis. Synthesis of source information is present and meaningful. Argument shows logical progressions. Techniques of argumentation are evident. There is a smooth progression of claims from introduction to conclusion. Most sources are authoritative. Synthesis of source information is present and scholarly. Argument is clear and convincing, presenting a persuasive claim in a distinctive and compelling manner. All sources are authoritative. 10.0 %Thesis Development and Purpose Paper lacks any discernible overall purpose or organizing claim. Thesis and/or main claim are insufficiently developed and/or vague; purpose is not clear. Thesis and/or main claim are apparent and appropriate to purpose. Thesis and/or main claim are clear and forecast the development of the paper. They are descriptive and reflective of the arguments and appropriate to the purpose. Thesis and/or main claim are clear and comprehensive; the essence of the paper is contained within the thesis. 5.0 %Mechanics of Writing Mechanical errors are pervasive enough that they impede communication of meaning. Inappropriate word choice and/or sentence construction are used. Frequent and repetitive mechanical errors distract the reader. Inconsistencies in language choice (register), sentence structure, and/or word choice are present. Some mechanical errors or typos are present, but are not overly distracting to the reader. Correct sentence structure and audience-appropriate language are used. Prose is largely free of mechanical errors, although a few may be present. A variety of sentence structures and effective figures of speech are used.
  • 17. Writer is clearly in command of standard, written, academic English. 5.0 %APA Format Required format is rarely followed correctly. No reference page is included. No in-text citations are used. Required format elements are missing or incorrect. A lack of control with formatting is apparent. Reference page is present. However, in-text citations are inconsistently used. Required format is generally correct. However, errors are present (e.g. font, cover page, margins, and in-text citations). Reference page is included and lists sources used in the paper. Sources are appropriately documented though some errors are present. Required format is used, but minor errors are present (e.g. headings and direct quotes). Reference page is present and includes all cited sources. Documentation is appropriate and citation style is usually correct. The document is correctly formatted. In-text citations and a reference page are complete and correct. The documentation of cited sources is free of error. 100 %Total Weightage Running head: CASE STUDY POTENTIAL RESOLUTIONS 1 CASE STUDY POTENTIAL RESOLUTIONS 5 Case Study Potential Resolutions
  • 18. There are missing elements in your paper. Be sure to carefully review the directions for the assignment and address each of the stated requirements. As an example, what are the suggested resolutions? You were to identify two, with a focus on the financial aspects. The reference requirements are also not met. Be sure to use a ragged right margin as required by APA 6.0. Case Study Potential Resolutions The paper discusses Purple Cloud, an organization that has been in existence for the last 10 and a half decades. The company has grown through several issues which have affected its growth and development, and decreased its competitive status. As a growing security firm, Purple Cloud has ABC-Tech as software to deal with security challenges the company faces at times. The software needs little upgrading and improvement, and because of its flexibility. The software increases the organization’s opportunity to become a major force in the industry. The paper discusses the economic issue of Purple Cloud, and focuses on the different strategies that Purple Cloud may pursue based on theory and research support. Summary of the Economic Issues Purple Cloud failed to keep up with changes that took place in the field of technology, and larger organizations took the company’s share in the industry, based on larger marketing budgets, and better expertise. The economic status of the United States’ markets has changed tremendously, and has experienced financial deregulation . Economic legislation has also continued to ease, and the situation has led to an exponential increase in mortgage lending. Unemployment is a major issue, and the rate of unemployment has influenced the aspect of organizations fearing the economy
  • 19. because of the instability of the financial industry. The mortgage industry could decline in the coming years, and the trend could lead to a halt of general buyer consumption. The housing bubble resulted in the loss of several billions of dollars, and the United States economy continues to show signs of technological decline. Vision and Mission of Purple Cloud Purple Cloud is an organization that provides online software protection products to consumers. The vision revolves around the safe movement for different applications operating in the market, and the organization’s focus includes efficiency, security, reliability, and teamwork. The company believes in developing competitive pricing for their products to avoid the aspect of it dwindling. The general prices in the market are fluctuating at an alarming rate. The market also experiences security issues, such as cybercrime and general hacking. However, Purple Cloud strives to develop the best products, at affordable pricing, and may be accessed by consumers. The market is losing data at an alarming rate as a result of unauthorized access to systems. The situation has seen Purple Cloud using flexible systems, such as ABC-Tech. The market is also volatile due to factors, such as mixed trading. With the aspect of building a strong customer related service, Purple Cloud ensures it keeps track of its customers, and their activities through a real-time system. The market changes without any warning, a major factor that makes it hard for a company, such as Purple Cloud to operate well in its domains. Purple Cloud has influenced its management to look forward when it comes to creating a better market for
  • 20. the product. Increasing market uncertainties have made it challenging for technological portfolios and the housing market to grow. As a security firm, the company has created a positive approach to initiate development in its different departments, and increase its capacity to grow in the market. The stock market is also uncertain, which affects the interest rates. Inflation is on the rise, a major factor that influences sales in the market. The economic outlook of the company is slightly different for its business development. Management has to make the right strategies to allow the company fit the changing nature of the market. The insecurity level in the global market continues to create discord. The market is also at the state of unrest, a major factor that sparks economic challenges. Employing the right organizational structure influences Purple Cloud to define its strategic direction. The horizontal business and organizational structure of the company has made it possible to change its market position (Wachowicz, 2010). Purple Cloud continues to build quality products for the market throughout the global markets. The customer engagement approach developed by management has eliminated negative factors that limit growth in the company. So, what are your two recommendations? Conclusion In relation to the above, it is evident that many problems are influencing the business of Purple Cloud in a negative manner. The geopolitical landscape is another major factor that influences the status quo. France and Britain have already joined the quest to eliminate their position in the European Union, affecting the economic growth of the European Union. Countries, such as Spain, Ireland, and France are uncertain about their economic outlook. However, countries like China
  • 21. and India are better targets for the development of the company. The above factors act as a negating factor for the global security status. However, through good marketing strategies, and the proper vision, mission, and values, the company has defined its developmental path. It has acquired the capacity to grow and beat the competition. References Wachowicz, T. (2010). Decision support in software supported negotiations. Journal of Business Economics and Management, 11(4), 576-597. �Per APA, use a ragged right margin. �Rewrite for clarity. Markets cannot experience, as they are not human. This is an example of anthropomorphism. �A company is a single entity, so use “it” or “the company” �Anthropomorphism �Purple Cloud and its management are the same. �Please refer to the deliverables for this assignment. One reference that is not within the last three years does not meet the criteria.