Marketing Paper, 6 papers max, Company: Take-Two Interactive Software

Fall 2020 - Assignment #1

Through your connections at the Columbia University Enterprise Risk Management Program, you recently started a new assignment as a Senior Risk Analyst at The Pierre Group, one of New York City’s most prestigious private equity (PE) funds, named after the famous hotel where the founders of the firm met to start the firm.  This private equity fund has a strong focus on (1) proactively managing the strategic risk associated with companies in its portfolio and (2) understanding the strategic risk posture of any potential acquisitions. Recently, the PE firm has made a strategic decision to expand its portfolio by acquiring stakes in companies both inside and outside the US.

You report to the Director of Portfolio Risk Management (“PRM”). She has a team of  risk analysts, who are constantly evaluating companies.  The Director of PRM is very busy as she is evaluating the strategic risk posture of companies in the portfolio and assessing potential acquisitions in order to advise the firm’s managers.

The Director has selected you to be part of the due diligence team for project Standard. There are members from legal, finance, operations, human resources, and others on the due diligence team, as well, performing analyses from the perspective of their disciplines. You represent the risk management discipline.

Your first assignment for the Director is to assess the company that you selected in Assignment 1, (the project code name is “Compass”).  Based upon the information that you provide in Assignment 1, the Pierre Group will decide if it should take a 10% pre-emptive stake in the firm you will evaluate in this assignment. The Pierre Group’s executives will later decide if they should complete the acquisition of that firm, but before they do, they want to ensure that they are selecting the best firm in the industry. 

Your task for Assignment 1 is to select a firm from the list  in the Google file titled 

sent to all of you via email by placing your name next to the company of your choice. You then need to address all elements listed in the  following memo  sent to you by the PRM. 

_______________________________________________

To:       You

From:  The PRM

Subject:  Due Diligence Assessment for “Project Compass”

Date:  September 30, 2020

I would like to request your help for the first phase of “Project Compass.”  I am assigning you to the due diligence team for this project. I’d like to review your work, however, before it is presented to the senior executives so that I can give you some feedback on its content. I will assess your memo based on a 200-point scale, utilizing the points  allocated in the rubric below.  Please address the following issues in a memo to me.

Step 1: Identify a company to assess in Assignment 1 from the  afore-mentioned list .

Step 2: In a memo to me, the PRM, address the following issues:

(a) Summarize the business of the company and the strategy it is pursuing. Consider  relevant competitive forces  and use at least one of the tools you learned in class to analyze the company. 

(b) Identify, describe and evaluate the key strategic risks the company is facing as well as their potential upside/downside implications. 

(c) Recommend approaches to mitigate  the  risks you identified.

(d) It is possible that the company's strategy can(not) be pursued successfully.  Opine on whether its strategy is fundamentally sound or not , explain why, and  assess if its risks are manageable. 

(e) Based on your overall assessment in this memo focusing on the strategy and the strategic risk posture of the firm, should the Pierre Group take a 10% stake in the company you assessed or not? Please explain your rationale. 

You will be assessed on:

(i)  whether you addressed all components of the assignment,

(ii)  the quality of your responses,

(iii) your ability to support your analytical observations and strategic recommendations,

(iv) appropriate usage of the tools  that we discussed in class and are included in the reading,

(v) your ability to communicate information in a clear and concise manner suitable for   the defined audience,

(vi) whether you identify sufficient sources to support your conclusions and arguments and whether all of the sources relied upon are identified (however, you should not excessively quote sources, e.g., quoting the Annual Report, Form 10-K or Form 20-F does not demonstrate knowledge of the company). If you use these SEC filings as a source, they should be the most recent ones. 

To most effectively complete this assignment, you will most likely need to use other sources in addition to the most recent filings. Please reference all your sources.

Typographical, grammatical and syntax errors will result in reduced points but will not be corrected on your memos.

Page count is limited to up to 6 single-sided, double-spaced pages. Consider various types of visual aids that will facilitate communicating your points, e.g., charts, graphs, tables, etc. The references pages do not count in the 6-page limit. I will not review, however, more than  6 pages of memo with responses to the above questions.

Please remember: You are a new but aspiring analyst at a firm writing for a busy senior executive. Keep your memo clear and concise!

Written Assignment Rubric

Criteria

Pts

Articulated  the  strategy and applied one of   the  strategy analysis tools we studied

   40 pts

E.g. used Porter's 5 forces for   industry analysis, or the Ansoff Diagram for Product/Market fit. The model   used was appropriate for the type of analysis performed.

Strategic Risks Identified

   40 pts

Identified at least 3 Strategic   Risks per our taxonomy, and analyzed them using the approaches studied. How   do the risks relate to the achievement of the strategy? Risks identified in   the 10K or Annual Report that are purely legal risks will not receive value.

Mitigation

   40 pts

Provided at least one proposed   mitigation approach for each risk identified. Argued for how that would   mitigate the risk effectively, OR argued convincingly that the risk cannot be   mitigated. Is a risk partially mitigated or fully mitigated?

Use of supporting data

   20 pts

Used credible and factual data   sourced by individual research to inform the analysis (Wikipedia is NOT an   authoritative source for the purpose of this assignment). Sufficient sources   were used. Although very useful basic sources, reliance solely on a 10K, 20F,   or annual report will result in zero points for supporting data.

Communication Style

20 pts

Writing is clear, easy to read,   and logically organized. English language and grammar are sufficiently good   for international communication. The document is visually appealing and   achieves the communication objective.

Sources Provided

10 pts

All sources quoted or cited are   identified using footnotes or inline citation. It is very clear when the   student is speaking, and when she or he is citing another source.

Understanding the company's goals/objectives and opining on   the strategy 

30 pts

In order to assess the strategic   risks a company is facing, you must understand what the company is trying to   achieve. This can be presented in the corporate strategy, goals, objectives,   etc. To provide context for further analysis, the student should present   his/her understanding of the company's strategy, goals, objectives, etc.

Total  200 pts