College of Doctoral Studies DBA-835 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. Nonetheless, the company now has approximately 200 employees, about 40% of which are full-time. Purple Cloud has survived the economic downturn of a few years ago and, in fact, experienced a resurgence on the cybersecurity front since many people feared the vulnerability of personal information located online. Despite transforming this $40 million company into a $100 million organization with a current stock price of 71, the executives still feel it is necessary to safeguard their long-term investment as they look toward a more sustainable future. The uncertainty surrounding how Purple Cloud will approach sustainability has led Chris Christianson, one of the co-founders of ABCTech, to have his company shares bought out stating that he is uncomfortable with the current forecasting. When asked about his departure, Christianson said, It has been a long time coming. I was new to running a business, and as long as I was able to see where the company was going and growing, I was willing to stay. Recently, it just was not fun for me anymore. So, I am stepping down to allow the Purple Cloud leadership to replace.

1. College of Doctoral Studies
DBA-835 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. Nonetheless, the company now has
approximately 200 employees, about 40% of which are full-
time.
Purple Cloud has survived the economic downturn of a few
years ago and, in fact, experienced a resurgence on the
cybersecurity front since many people feared the vulnerability
of personal information located online. Despite transforming
this $40 million company into a $100 million organization with
a current stock price of 71, the executives still feel it is
necessary to safeguard their long-term investment as they look
toward a more sustainable future. The uncertainty surrounding
how Purple Cloud will approach sustainability has led Chris
Christianson, one of the co-founders of ABCTech, to have his
company shares bought out stating that he is uncomfortable with
the current forecasting. When asked about his departure,
Christianson said,
It has been a long time coming. I was new to running a
business, and as long as I was able to see where the company
was going and growing, I was willing to stay. Recently, it just
was not fun for me anymore. So, I am stepping down to allow
the Purple Cloud leadership to replace me with someone who
can help take them to the next level.
Tecnoti, the CEO of Purple Cloud, and Thunder Thompson, co-
founder of ABCTech and newly appointed chief information
officer (CIO), released this joint statement:
We are saddened by the loss of our colleague, though we know
he is going to move on and do what he loves to do. We know he
will still be watching as we work on a more sustainable future.
In its quest for sustainability, Purple Cloud is interested in
expanding its operations. It currently is doing well in both
domestic and international sales. In essence, it is acting like an
international organization, exporting its product solely via
computer downloads. However, customer service costs are
rising in the United States as the increased need for 24/7/365
support is needed to serve its global clientele. The addition of

3. the second and third shifts is impacting profits.
Concerns exist in the cybersecurity market as well. First, there
is increased speculation that a company has developed toys with
embedded learning software that can be used as spying devices
for companies to gain a competitive advantage. However, given
Purple Cloud's acquisition strategy, this may provide an
opportunity for Purple Cloud to acquire a cyber security
software and then use its existing technologies necessary to
implant the software. This would allow them to become the
leader of cyber security products that detect this type of spying
and ultimately put the world at ease from cyber spying while
remaining true to its strategy and using its existing technology.
The second concern is the current flux of United States
international policies. For decades, the United States has played
the role of world police force, but there is a current trend to
focus more on national versus international concerns. Trade
agreements such as NAFTA which have been in place for
decades are being questioned, and higher tariffs may be on the
horizon in order to bring manufacturing jobs back to the United
States from countries such as China and India.
However, corporate tax rates in the United States are currently
in flux and could turn favorably for Purple Cloud. Thus, Purple
Cloud's leaders are considering whether this is enough to
support the desired growth rate or whether going international is
the right option.
With the desire for continued growth, Purple Cloud needs to
review its options, and the executives have hired a global
consultant to provide them with potential global growth
scenarios. Purple Cloud is advised it first needs to determine
whether to remain just an exporter or to explore other
international modes. The consultant, utilizing the work of Hitt,
Ireland, & Hoskisson (2013), is providing the following modes
of entry as a reference:
· Licensing - An agreement is formed that allows a foreign
company to purchase the right to manufacture and sell a firm’s
products within a host country’s market or a set of host

4. countries’ markets.
· Strategic Alliance - A firm collaborating with another
company in a different setting in order to enter one or more
international markets.
· Cross-Border Acquisition - A firm from one country acquires a
stake in or purchases all of a firm located in another country. A
related strategy, domestic acquisition, was used earlier in
Purple Cloud’s development.
· Greenfield Venture - A firm invests directly in another
country or market by establishing a new wholly owned
subsidiary, which is 100% owned by the parent company.
Second, the consultant worked drew on the work of Iwan (2007)
and advised Purple Cloud executives of three possible types of
global organizations Purple Cloud could become including the
following:
· Multinational companies have investments in other countries
but do not have coordinated product offerings in each country.
These companies tend to be focused on adapting their products
and service to each individual local market.
· Global companies have invested in and are present in many
countries. They market their products through the use of the
same coordinated image/brand in all markets. Generally, one
corporate office is responsible for designing and implementing
a global strategy that tends to emphasize volume, cost
management, and efficiency.
· Transnational companies are much more complex
organizations. They have invested in foreign operations and
have a central corporate facility, but they delegate decision-
making, research and development, and marketing powers to
each individual foreign market.
Given the goals of Purple Cloud, the consultant has presented
the following three expansion countries for the executives to
review further:
· China - China is an autocratic regime following export
oriented growth strategy. China has the biggest military budget
in the world. Together with India, China did $73 billion in trade

5. last year. China has become known as a leader in
manufacturing, and pride itself on quality at a good price.
· India - India is a democracy following inclusive growth
strategy. India is nonaligned and is a self-reliant nation. No
third country, directions, or orders influence India’s behavior.
They have been known previously for customer service
contracts and software development.
· Mexico - Mexico is up-and-coming. They have signed 44 free
trade agreements, more than any other country in the world.
This is more than twice as many free trade agreements as China
and 4 times more than Brazil. Mexico has increased the number
of engineers and skilled laborers graduating from its schools.
Today, Mexico is exporting more manufactured products then
the rest of Latin America combined. For example, Mexico is a
base to supply some Fiat 500s to the Chinese market. There are
also several technology start-ups emerging up in Mexico. As the
population continues to shift, language needs are also shifting.
As a tool for researching, the consultant has recommended that
Purple Cloud executives access globalEdge at
https://globaledge.msu.edu/. This is a free database of
international business information, and the consultant has
indicated that this is an excellent resource for executives
considering the types of decisions currently faced by Purple
Cloud.
The consultant has also mentioned the need for Purple Cloud to
explore its current corporate social responsibility policy and
consider a change of philosophy to more closely align with the
notion of conscious capitalism.
References
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic
management: Competitiveness & globalization (10th edition).
Mason, OH: South-Western.
Iwan, L. (2007, June 18). Differences between a global,
transnational, international, and multinational company [Web

6. log comment]. Retrieved from
https://leeiwan.wordpress.com/2007/06/18/difference-between-
a-global-transnational-international-and-multinational-company/
Questions to Consider
What mode of entry and organizational type should Purple
Cloud adopt to assure its future sustainability if it decides to
move to become a global corporation? Why?
Into which country or countries should Purple Cloud pursue
expanding its operations? Why?
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

7. 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.
Thunder Thompson, Chief Information Officer (CIO)
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.
Maria Preston, Chief Operational Officer (COO)
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

8. 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.
Will 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.
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

9. 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
Financial Statements
Purple Cloud Projected Income Statement*
* Notes:
The decrease in revenue from subscription software and the
increase in the revenue from the ABC product line reflects the
company's strategy to shift resources to ABC. The ABC product
line provides a better solution for the customer and a greater
return to the company.
Implementation of the company's strategy to shift resources to
the ABC product line also resulted in a decrease in the cost of
customer support and allowed hosting expenses to remain flat.
While product development remains important, the company's
acquisition strategy will be the primary avenue through which
new products will be integrated into the company's offerings.
The tax rate is subject to change. Current projections are that
the rate may drop to approximately 20%.
© 2018. Grand Canyon University. All Rights Reserved.
Purple Cloud
Income Statement
For Year Ending December 31, 20XX
Previous PeriodCurrent Period
Revenue
Subscription Software Revenue35,000,000$ 30,000,000$

10. ABC Product Line24,000,000 48,000,000$
Professional Services11,000,000 22,000,000$
Total Revenue$70,000,000$100,000,000
Cost of Goods
Customer Support$7,000,000$6,000,000
Hosting Expense$800,000$800,000
Professional Services$8,800,000$17,600,000
Total Cost of Goods Sold$16,600,000$24,400,000
Gross Profit$53,400,000$75,600,000
Gross Margin76%76%
Operating Expenses
Sales$18,000,000$25,000,000
Marketing$14,000,000$18,000,000
Product Development$1,200,000$2,000,000
General Administrative$3,000,000$3,862,000
Total Operating Expenses$36,200,000$48,862,000
Net Income$17,200,000$26,738,000
Tax @ 30%$5,160,000$8,021,400
Profit$12,040,000$18,716,600
Profit % / sales17.2%18.7%
Rubic_Print_FormatCourse CodeClass CodeAssignment
TitleTotal PointsDBA-835DBA-835-O500Benchmark - Case
Study Potential
Resolutions230.0CriteriaPercentageUnsatisfactory (0.00%)Less
Than Satisfactory (73.00%)Satisfactory (82.00%)Good
(91.00%)Excellent (100.00%)CommentsPoints
EarnedContent90.0%Summary of the Sustainability
Issue10.0%A summary of the sustainability issue is not
presented.A summary of the sustainability issue is included, but
is inaccurate or incomplete.A summary of the sustainability
issue is presented, but does not focus on the financial concerns
of the case.A summary of the sustainability issue is presented
and focuses on the financial concerns of the case.A summary of
the sustainability issue is thoroughly presented and strongly
focuses on the financial concerns of the case offering rich

11. detail.Summary of the Management Theories Applicable to the
Case and Its Potential Resolution Benchmarks C
1.1: Evaluate management theories.20.0%A summary of the
management theories applicable to the case and its potential
resolution is not presented.A summary of the management
theories applicable to the case and its potential resolution is
included, but is inaccurate or incomplete.A summary of the
management theories applicable to the case and its potential
resolution is presented, but does not focus on the financial
concerns of the case.A summary of the management theories
applicable to the case and its potential resolution is presented
and focuses on the financial concerns of the case.A summary of
the management theories applicable to the case and its potential
resolution is thoroughly presented and strongly focuses on the
financial concerns of the case offering rich detail.Summary of
the Leadership Theories Applicable to the Case and Its Potential
Resolution Benchmarks C 1.2: Evaluate leadership
theories.20.0%A summary of the leadership theories applicable
to the case and its potential resolution is not presented.A
summary of the leadership theories applicable to the case and
its potential resolution is included, but is inaccurate or
incomplete.A summary of the leadership theories applicable to
the case and its potential resolution is presented, but does not
focus on the financial concerns of the case.A summary of the
leadership theories applicable to the case and its potential
resolution is presented and focuses on the financial concerns of
the case.A summary of the leadership theories applicable to the
case and its potential resolution is thoroughly presented and
strongly focuses on the financial concerns of the case offering
rich detail.Discussion of and Rationales for at Least Two
Potential Resolutions Benchmarks C1.3: Develop,
extend, modify, or apply theories for use in business.30.0%A
discussion of and rationales for at least two potential
resolutions is not presented.A discussion of and rationales for at
least two potential resolutions is presented, but resolutions are
ill-conceived and illogical. No research or financial analysis

12. support is offered.A discussion of and rationales for 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 and financial analysis
support is limited and from dated resources.A discussion of and
rationales for at least two potential resolutions is presented, is
logical, and is thorough. Resolutions are viable, appear
moderately well-conceived, and are logical. Research and
financial analysis support is limited, but from current
resources.A discussion of and rationales for 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 and financial
analysis support is thorough and from current
resources.Synthesis and Argument10.0%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.Format10.0%Mechanics of
Writing5.0%Mechanical errors are pervasive enough that they

13. 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.APA Format5.0%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.Total Weightage100%