Microsoft Presentation at Bilgi University by Merthan Kaleli

1. Business Challenges during and after the crisis
Merthan Kaleli
E&D Lead, Microsoft
Bilgi Üniversitesi . Santralistanbul
22.12.2009

2. 2006 and 2007 were the best years for economic growth and
corporate sales/earnings growth since 1945
They will surely be repeated again…
…but most likely when we are all dead.
2

3. Global Crisis . Q4 FY09
• How did the world end up in such a mess?
– Mix greed and stupidity with fraud, corruption and
inadequate regulations, and you destroy three big engines of
demand: confidence, trust and financing
• Four critical points to understand how we got here
1. Unsustainable economic super-cycle built on easy money
going into reverse – the reversal was a predictable outcome
2. Rebalancing of global economy – another predictable
outcome
3. Unregulated and fraudulent financial institutions lending,
hiding and reselling debt – a largely unpredictable outcome
4. Usage of bought instruments such as collateral to borrow,
lend, fraudulently hide and repackage – largely invisible and
therefore a largely unpredictable outcome
• Another Great Depression?

4. Economical Downturn . Turkey Q4 FY09
• Consumer Confidence
• Investor Confidence
• Unemployment
• Criticizing the government
• Deeper recession and slower bounce back
• Turkey is vulnerable
• No emerging market can recover without a
recovery happening first in the US and Western
Europe

5. Consumer Confidence . Lowest since Jan’04

6. Retail Ecosystem . Turkey Q4 FY09
• New Market & Globals
• Deep Discounts
• Over Stock
• Cash is the king!
• Goal : Not to lose market share & customers
• Prevent further market erosion
• Currency & %18 VAT offerings

7. Microsoft . Big Picture
• The impact of the recession—the decline in
revenue for Q4 and for FY09
• Control – Costs, Market Share, Customer
Satisfaction
• Positioned to make FY10 a great year for MS

8. What’s our story? . Microsoft Retail . Turkey
• Revise Planning & Forecasting
• Seasonal Adjustments
– Currency Fix, Lower stock turnover, No new orders,
Payment turns, Returns
• Revise Spending & Cost Reduction
• Marketing
– More consumer Ads., Merchandising, Offerings,
Assortment & Shelf Space
• Focus on top performing stores
– Re-Forecast – Channel Breakdown
• Benchmarking
– Internally & Externally
• Focus on Customer Satisfaction

9. The World Economy . Economical Climate
• Recessionomics
– Look at previous downturns, and stay calm
• Weighed down
– The recession has left a fiscal burden that many
countries will struggle to shed
• The great stabilisation
– The recession was less calamitous than many feared.
Its aftermath will be more dangerous than many
expect.
– America will recover, but too weakly for comfort
• Reshaping the post-crisis world
– How the world can avoid slipping back into crisis?

10. The World Economy . When will demand return?
• This is not a typical emerging market crisis where
affected markets bounce back very quickly
• Past bounce-backs were fast due to good global
liquidity and growth outside of the affected markets
• Globally, the recession will look like a deep and long U
with a slow recovery most likely in the post-crisis era
• The restoration of confidence in the developed world
should start emerging some time in 2010 (best case
late 2009)
• However, positive impact on business might not be felt
until 2011, especially in emerging markets
• Growth as of 2011 onwards will be slower than boom
years of 2006 and 2007

11. It's not good enough that we do our best;
sometimes we have to do what's required.
Winston Churchill

12. What’s next? . One Microsoft
• Invest in the right opportunities and
technologies
• Drive end user excitement
• Embrace the cloud across all of our
businesses
• Win market share
• Focus on employee excellence

13. Economic Outlook . 2009 & 2010 GDP Growth Picture
Source: EIU April 7, 2009

14. WW GDP Growth Forecast . 2007 – 2012
Source: IMF World Economic Outlook, Consensus Economics, Inc., EIU

15. WW IT Spending . 2007 - 2012
WW IT Spending
Worldwide GDP Forecast
Source: Q2 & Q3 2008 Worldwide Black Books; IDC Downside Scenario Model

16. An Economic Unknown . Freeing Up Spend on IT
$1-3 Trillion For
Bank Bailouts
Tax Cuts
Smart Grid
SMB Incentives
Health Care
Infrastructure
Broadband
Auto Manufacturers
Green Building

17. The Potential Impact of Stimulus Plans . 2009 -2012
WW ICT Spending Growth WW ICT Spending (B)
$250 Billion over 4
Years
Source: Q4 2008 Worldwide Black Book, IDC Estimates

19. Poll #4 . IDC Q3 2009
What do your clients feel about the economy?
( 1% ) We have reached bottom
( 51% ) We still have a long way down to go
( 14% ) Things are starting to look up
( 33% ) They are not sure, they ask us

20. Poll #5 . IDC Q3 2009
What have you heard from clients in the last quarter
about their order rates?
Apr 09 Jan 09 Oct 08
( 4% ) ( 7% ) ( 50% ) Have not talked to them
( 4% ) ( 4% ) ( 17% ) No crisis-related change
( 43% ) ( 38% ) ( 23% ) A minor drop in orders
( 45% ) ( 49% ) ( 10% ) A significant drop in orders
( 5% ) ( 1% ) ( 1% ) An increase in orders

21. What’s The New Normal for Microsoft Retail in
Turkey?

22. What’s The New Normal . 2010
• Be Proactive
• Maintain long-term strategy against multinational and local competitors
• Focus on Long Term Gain
• Focus on Building Market Share
• Acquire Channel : Distributors/Partners/Consumers
• Retail Execution is the KEY!
• The Microsoft Factor
• Crisis can provide opportunity!
• The world wants you to fail
• Preparing for the worst : The Crisis Plan
• Scenarios and how to handle
• Crisis Communication; PR, Internal/External (Customers & Partners)

23. Thank you
Contact Information
Please send your comments to:
merthankaleli@hotmail.com