McAfee Case Study I. Current Situation A. Current Performance
McAfee is in good financial standing. * In 2004, paid down $347 million in convertible debt and repurchased $220 million in common stock. * Revenue has declined over past two years but net income has increased. * Ongoing operations generated over $350 million in cash, with the fiscal year ending in $1 billion in cash, cash equivalents, and investments. * Deferred revenue increased for the period by $220 million. B. Strategic Posture 1. Mission: a. “To secure consumers and businesses from the desktop to the core of the network by delivering best-of-breed products and services that protect … global customer’s information
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III. External Environment: Opportunities and Threats E. Societal Environment 15. Economic . Early part of the 21st century had a decrease in IT spending. (T) �. IDC predicted a growth of 16.9% annually between 2003 and 2008 in the security software market. (O) �. There has been a steady growth of average 22% in e-commerce retail sales in the U.S. (O) 16. Technological �. Newly developed viruses, spyware, and worms affect how well they can manage their securities (T) �. Outsourcing bulk of new software development. (O) �. Increased use of broadband and DSL speed internet, growing from 9.9 million users to 22.7 million users. (O) �. McAfee holds a 19% market share among the computer protection companies. (O) (Exhibit A) 17. Political-Legal �. Potential losses that results in shareholders law suits against company. (T) �. SEC made NAI re-state earnings because of compliance issues. (T) 18. Sociocultural �. Accommodating to the aging society. The older population needs a product they can depend on, that is easy to understand and easy to use. (O) �. Society is transitioning into a wireless more mobile society. McAfee has to be aware of this and develop a product that will protect PDA’s, wireless laptops and mobile phones. (O) F. Task Environment
Strategic type =
(iii) Decreasing financial rate. The financial rate is less and less year after year. It is a problem for the company. (iv)Too many fields Dobbies refers to. There are many fields Dobbies has its business on. Dobbies' main activity is horticulture, but it also stretch to foods, restaurant, ect. It will bring the company more risks.
The online retail sales market share was exceptionally high in the United States who ranked second amongst the developed nations
The major market trends faced by the organization are the rapid development of the technology. This trend gives the customer an uneasy sensation, so the customer will ask for the upgrade at the lower cost conceivable. Other trend is the cost of the internet, and the use of the computer by their employee for personal matters.
Essentially, MCI relied heavily on convertible debt. As their stock price rose, the debt was converted to equity. Jeremy Stein (1992) states that a "good firm will use convertibles because the firm's true value will be made known before the debt is due". Following Stein's observations, Jen, Choi, and Lee (1997) conclude that "convertible bond financing is an attractive alternative for companies that have large growth potential but find both conventional debt and equity financing very costly". MCI clearly had a vision for substantial growth. The MCI management saw an opportunity for financing that would result in issuing equity and leave the possibility open to acquiring more debt in the future, if needed.
In what other ways is the global economy changing in directions that threaten other business?
A steady increase in the popularity of online sales has caused a major push towards e-commerce in the retail industry.
According to MarketLine, the world online retail market expanded by almost 18% in 2010 and is predicted to reach close to $435 billion in sales. The market is expected to reach a 90% growth by 2015 and exceed $827 billion in sales. Listed in an article “Ecommerce Growth Statistics”, the average amount spent by each consumer is expected to rise from $1,207 per year to $1,738 per person by 2016. That is a significant increase. That shows that people prefer to shop online than going to the actual store in today’s society. Shoppers will spend on an average of $327 billion online shopping in 2016, which is about 45% from $226 billion in 2012. It is very evident that consumers will drive ecommerce into the future; especially e-retail. In just a few years, purchases online will be more profitable than ever, with others products and services available to purchase such as mobile and social allowing consumers to shop to their convenience. For retailers and
E-commerce has seen an alarming increase in growth since it was first initiated back in the year 1995. Since its initiation, many companies and businesses have adopted to using the internet as their sole method of reaching customers from all parts of the world and transacting business in a much more simple and secured way. According to Investopedia, “In the 21st century, the shift to e-commerce has been by far the biggest technological advancement that has changed consumers’ buying habits”. People now have the comfort of buying and selling stuff without going through the physical hassle of actually going into shops just to buy or sell their items. Businesses are booming and this has led to an improvement in profit margins and better conditions of business. Investopedia also states that, “Between 2010 and 2013, global online sales nearly doubled in dollar amount, from $680 billion to $1.25 trillion”. One of these companies benefiting from the impact of e-commerce is Netflix, Inc.
Retailers have adapted to the online marketplace out of necessity and opportunity. The great recession placed many retail companies in financial hardship and while some failed, others innovated and became some of the largest companies in America such as Amazon. A recent trend is consumers are buying more products online than ever before. As a consumer, I enjoy shopping in the convenience of my home and having the items delivered to my doorstep in 48 hours or less. Global internet access continues to increase, with mobile devices and affordable internet for the home, consumers will continue to shift and buy products online rather than in retail brick and mortar locations. Online sales in the United States have increased over 250% in the last ten years, accomplishing $250.0 billion in 2012 (Tehrani, 2014). Therefore, Amazon is in a solid market position to capitalize on the future trends and booming ecommerce
This study will prove that e-commerce has grown because it adds value to people’s lives. It will show that e-commerce will not disappear but evolve into something even greater than what it is right now.
The continuous development of Internet leads to the growth of e-commerce. The electronic commerce is growing constantly due to the continuously increasing number of mobile and online users in the market, primarily the emerging markets. Besides that, the development of the Information Technology (IT), such as the advance of paying processes and the improvements of shipping method also the main reason to cause the growth of electronic commerce (John Ingham, 2015). Most consumers accept e-commerce as their feasible alternative in the purchase of goods and
According to the U.S. Department of Homeland Security in the article Cyber Threats to Mobile Phones, phones are now sharing hardware and software similar to a PC and becoming each time more like a PC. Therefore, the risks of being hacked are increasing, allowing hackers to attack mobile devices the same way as if they were doing it with a regular PC. Personal and professional information are more often stored on mobile devices therefore it is imperative to have our data secure. Security solutions for mobile devices are not as broad or high-tech as those for PCs. The majority of mobile security relies on the proper use and smart choices that the user makes on a daily basis to be protected against cyber attacks. Even the most careful person can be attacked but the possibilities of that happening are less when you are proactive.
revenues via e-commerce in the next two to three years (Richter, 48). The core of e-
In the previous five years, cybersecurity has turned into the most looked for after calling around the world. More than 90 percent of respondents to an overview directed by the Ponemon Institute (2011) detailed being a casualty to cyberattacks amid the most recent year, costing all things considered more than $2 million for each association. This number keeps on ascending as the two programmers and security devices progress. As indicated by PwC, roughly 33% of all U.S. organizations are as of now utilizing digital protection (Lindros and Tittel, 2016).
Organizations conduct transaction on a global scale, and they must adapt to the advances in technology to compete and succeed. E-commerce will provide a platform to promote growth and