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This case is a growth strategy case which requires the candidate to focus on various segmentation dimensions and develop a focused strategy for the client.

Global Software Group (GSG) is a large, publicly traded software services company with $10B in annual global revenue. Its portfolio consists of four product groups: Universal Desktop Software (UDS), Productivity Pack (PP), Business Infrastructure Suite (BIS), and Business Solutions Suite (BSS). The U.S. business (~$3.6B of total revenue) has stagnated: CAGR fell from 10% (pre-2001) to 3% since. International operations continue to perform well. GSG has historically segmented its market by product, not by customer type.

GSG has engaged A.T. Kearney to develop a strategy to restore top-line growth in its U.S. business.

Exhibit 1
Q1: What strategy will restore GSG's U.S. top-line growth?
Recommended approach:
• UDS and PP are mature commodities — unlikely to drive growth
• BIS and BSS (business-focused) represent high-growth opportunity — 80% of future growth
• Focus strategy on business customers and the BIS/BSS product groups
Q2: Is GSG segmenting the market correctly? What is a better segmentation approach?
Recommended approach:
• GSG's product-based segmentation is misaligned with market opportunity
• Customer-based segmentation reveals: Small & Medium Businesses (SMB) will grow 78% vs. only 20% for Large Corporations by 2010
• GSG's penetration of SMB is minimal ($0.7B vs. $62.8B total market) — large white space
• Large enterprise segment is intensely competitive (incumbent large software/hardware vendors)
• Recommendation: Pivot to customer-segment view; prioritize SMB
Q3: How should GSG prioritize within the small business segment?
Recommended approach:
• Use IT spend per business as the prioritization metric (spend density = willingness to pay)
• Telecom & Utilities: $47.8M per business — highest priority
• Manufacturing: $15.1M per business — second priority
• Business Services: $4.9M per business — third priority
• Agriculture: $1.1M per business — lowest priority, pursue last
Q4: What is your final recommendation for GSG?
Recommended approach:
• GSG should abandon its product-centric view and adopt a customer-segment strategy
• Target: Small and medium-sized businesses — 78% projected growth, underpenetrated, less competitive
• Within SMB, prioritize Telecom & Utilities and Manufacturing verticals due to high IT spend per business
• Lead with BIS and BSS (business products) — existing portfolio is well-positioned

• Step 1 — Portfolio analysis: diagnose which products have growth potential (BIS/BSS vs. UDS/PP) • Step 2 — Segmentation re-design: shift from product-based to customer-based segmentation • Step 3 — Market sizing: compare SMB vs. large enterprise on growth, competition, and penetration • Step 4 — Industry prioritization: rank SMB verticals by IT spend per company • Step 5 — Recommendation: focused BIS/BSS push into SMB, starting with Telecom & Utilities

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Published July 17, 2025 • 127 views
Firm/University: Kearney
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