GLASGOW.GLOBAL.CONSULTING at University of Glasgow: Acquire, Expand, Scale or Not?
This presentation by GLASGOW.GLOBAL.CONSULTING at University of Glasgow delves into the analysis, recommendations, and challenges surrounding the potential acquisition, expansion, and scaling of Palantir Technologies. The team addresses key problems, outlines alternatives, and provides insights on implementation, financials, risks, and conclusions. Explore the strategic considerations and proposed actions for enhancing company profitability and market presence.
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Presentation Transcript
GLASGOW GLOBAL CONSULTING University of Glasgow Palantir Technologies Acquire, Expand and Scale or Not Presented by: Heli, Vicente, Ling-say, Chloe(Yijun)
GLASGOW GLOBAL CONSULTING Purpose Key Problems Recommendations Analysis Agenda Alternatives Implementation Financials Risks & Mitigation Conclusion
3 GLASGOW GLOBAL CONSULTING Purpose Increase Company Profitability Increase Company Profitability Expand to Commercial Sector Expand to Commercial Sector Address PR Issues Address PR Issues Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
4 GLASGOW GLOBAL CONSULTING Key Problems Targeted Customers Targeted Market Low Profitability Target market is two wide. Operating at a loss software are expensive, Karp needed to consider Offer too many products High sales & marketing If the most prudent course of action was to continue to work solely with governments and large and service. expenses. High operations expenses Little customer diversity Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
5 GLASGOW GLOBAL CONSULTING Recommendations Expand Become Profitable Growth Commercial Sector Create a New Brand 1.06% of global AI market share in year 1 Reduce Operating Costs Partner with Larger Competitors Expanding to More Profitable Sector 3.60% of global AI market share in 2027 Develop Products with Low Competition Presence Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
6 GLASGOW GLOBAL CONSULTING Analysis Strengths Weaknesses Core software strength in counterterrorism Financed by equity, Operating at loss Secured government contracts (ICE, DoD and NYPD) Expanding to many industry very fast Ease and flexibility: integrated clients existing Offering many products solutions into its central operating system High competitions in minor markets such as Splunk Strength in Big Data and Artificial Intelligence (AI) and SalesForce; Tyler Technology in AI Opportunities Threats PR issues: Data transparency and perceptions New social threats emerging increase demand for crisis Investor confidence control products Higher needs for security systems as more companies are Competitors from open-source softwires and cloud adopting work-from-home practices computing $200 million debt Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
7 GLASGOW GLOBAL CONSULTING Market Analysis- Software buyers Growth US buyers 2020 Government 11% 1. The global artificial intelligence market size was valued at USD 62.35 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 40.2% from 2021 to 2028. 2. It is expected to expand at a compound annual growth rate (CAGR) of 11.3% from 2021 to 2028 3. Based on enterprise size, the market has been segmented into large enterprises and small & medium enterprises. 4. The large enterprise segment accounted for the highest market share exceeding 55% in 2020 Business account 64% Households 25% Source: 1. 2. 3. Cook, D. (2021). Software Publishing in the US. IBISWorld Grand View research: Artificial Intelligence Market Size Analysis Report, 2021-2028 (grandviewresearch.com) Grand view research: Business Software And Services Market Report, 2021-2028 (grandviewresearch.com) Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
8 GLASGOW GLOBAL CONSULTING Financial Overview Palantir summarized P&L (figures in USD Th.) 1Q 2021 1Q 2021 /sales 1Q 2020 1Q 2020 /sales Plus: Revenue 341,234 100.0% 229,327 100.0% 2.3 Billion in cash Cost of revenue 74,111 21.7% 64,294 28.0% 200 Million in Debt Gross profit (loss) 267,123 78.3% 165,033 72.0% Sales & marketing expenses (136,097) -39.9% (98,653) -43.0% Research & development expenses (98,471) -28.9% (65,800) -28.7% General & administrative expenses (146,569) -43.0% (70,765) -30.9% Total operating expenses 381,137 111.7% 235,218 102.6% Income (loss) from operations (114,014) -33.4% (70,185) -30.6% Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
9 GLASGOW GLOBAL CONSULTING Customer Segment Options Commercial Sector Government + Commercial Government Pros Pros Pros Pros Profitable Better opportunity to reduce PR issues Become 1st IL 6 SaaS Little investment in marketing Minor Repositioning Keep existing profitable clients Capture customers from commercial sector Become 1st IL 6 SaaS Cons Cons Cons Cons Large number of competitors High risk for switching sectors Price sensitive Small % of the market revenue Not as profitable Positioning conflict between sectors Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
10 GLASGOW GLOBAL CONSULTING Decision Criteria Financial Impact Improve Company Profitability Company Growth Expand to Commercial Sector Address PR Issues Strategic Fit Cost of Implementation Market Opportunities and Competition Feasibility Risk of Pursuing Option Opportunities to Share Risk Risk Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
11 GLASGOW GLOBAL CONSULTING Decision Matrix Financial Impact Option Strategic Fit Feasibility Risk Decision Consolidate Sales and Marketing Force + + + + Expand to Commercial Sector as Palantir Tech. + + + x x Expand to Commercial as Subsidiary Company + + + + Change Customer Base to Commercial Only + + x x x Expand Business to Other Countries + + x x x - NEUTRAL IMPACT X NEGATIVE IMPACT + POSITIVE IMPACT Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
12 GLASGOW GLOBAL CONSULTING Commercial Expansion Partnerships vs. Stand-Alone Product Portfolio Customer New Products Industry Partnership IT/Log Analytics Voice and Image Analytics Performance Management Embedded BI Utilities Healthcare Finance Insurance Media Pros Reduce Competition and Risk Mitigate PR Issues Cons Shared Profits Need to Expand Product Options Options Options IBM Microsoft Oracle Existing Products Size Interactive Data Visualization Geo-Intelligence Predictive Analytics Analytics Platform Small and Medium Large Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
13 GLASGOW GLOBAL CONSULTING Implementation Summary 2022-2024 Scale down Sales and Marketing to become profitable Use the remaining Marketing team to focus on a PR campaign 2024 Enter Commercial Sector create partnerships that focus on large enterprises Develop new products Aim to acquire at least 0.1% of the total AI Market Share 2025-Future Increase sales force and marketing department Continue with R&D for both Government and Commercial Sectors Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
14 GLASGOW GLOBAL CONSULTING Implementation Objectives Resources Action Cost Termination costs PR hiring costs Partnership costs Consolidate current operations Reduce costs Focus the product offering Hire and Launch PR campaign Restructure marketing and salesforce team. Review and optimize general and administrative expenses Create new subsidiary and brand Partner with IBM. Launch new commercial- focused strategy P&R management team New subsidiary Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
15 GLASGOW GLOBAL CONSULTING Implementation Year 2022 2023 2024 Quarter 1 2 3 4 1 2 3 4 1 2 3 4 PR strategy Hire PR company Develop PR campaign Execute PR campaign New Subsidiary and Brand Create new subsidiary Develop commercial-focused strategy Partner with IBM salesforce Launch new strategy Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
16 GLASGOW GLOBAL CONSULTING Financials Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
17 GLASGOW GLOBAL CONSULTING Financials Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
18 GLASGOW GLOBAL CONSULTING Financials Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
19 GLASGOW GLOBAL CONSULTING Financials Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
20 GLASGOW GLOBAL CONSULTING Financials Market Share_commercial-Possitive Scenario Year 1.06% 2022 1.12% 2023 1.32% 2024 1.68% 2025 2.30% 2026 3.60% 2027 Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
21 GLASGOW GLOBAL CONSULTING Risks & Mitigation Late penetration in certain commercial market The partnership with IBM provides combined and complimentary of strengths as well as market share PR issues Re-evaluate board alignment with public perception Operational of the subsidiary Re-deploy core skills and hiring of new staff to strengthen the company s strategic move Technological relevance to the commercial industry Continue to work with existing commercial clients to innovate the company s product offerings Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
22 GLASGOW GLOBAL CONSULTING Conclusion Product Development Create Commercial- Focused Subsidiary Isolate current challenges Consolidate Market and Sales Force Develop exisiting Focus on making the and reposition company products where there is company profitable Expand to Commercial little competition Use remaining workforce Sector (Utilities, Media, Create product to to address PR issues Finance) compliment partnerships Create Partnerships Purpose Problems Recommendations Analysis Alternatives Implementation Financials Risks Conclusion
GLASGOW GLOBAL CONSULTING Thank you for your time 23
