Case Study Description of Oracle vs. salesforce.com
Explores the phenomenon of software becoming a service. Salesforce.com has catapulted into the lead for offering a customer relationship management (CRM) solution as a Web-based service. Siebel, the leader in CRM packaged software sales, has to devise a strategy to compete with salesforce.com
Authors :: David B. Yoffie, Alison Berkley Wagonfeld
Swot Analysis of "Oracle vs. salesforce.com" written by David B. Yoffie, Alison Berkley Wagonfeld includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Salesforce.com Crm facing as an external strategic factors. Some of the topics covered in Oracle vs. salesforce.com case study are - Strategic Management Strategies, Customers, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Oracle vs. salesforce.com casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, supply chains are disrupted by pandemic , technology disruption,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Oracle vs. salesforce.com
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Oracle vs. salesforce.com case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Salesforce.com Crm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Salesforce.com Crm operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Oracle vs. salesforce.com can be done for the following purposes –
1. Strategic planning using facts provided in Oracle vs. salesforce.com case study
2. Improving business portfolio management of Salesforce.com Crm
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Salesforce.com Crm
Strengths Oracle vs. salesforce.com | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Salesforce.com Crm in Oracle vs. salesforce.com Harvard Business Review case study are -
Training and development
– Salesforce.com Crm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Oracle vs. salesforce.com Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Salesforce.com Crm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Salesforce.com Crm has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Salesforce.com Crm are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Strategy & Execution field
– Salesforce.com Crm is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Salesforce.com Crm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Salesforce.com Crm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Salesforce.com Crm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Salesforce.com Crm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Salesforce.com Crm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Salesforce.com Crm is one of the most innovative firm in sector. Manager in Oracle vs. salesforce.com Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Salesforce.com Crm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Salesforce.com Crm is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Salesforce.com Crm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Oracle vs. salesforce.com Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Salesforce.com Crm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Salesforce.com Crm has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Salesforce.com Crm is present in almost all the verticals within the industry. This has provided firm in Oracle vs. salesforce.com case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Superior customer experience
– The customer experience strategy of Salesforce.com Crm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Oracle vs. salesforce.com | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Oracle vs. salesforce.com are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Oracle vs. salesforce.com HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Salesforce.com Crm has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Salesforce.com Crm is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Salesforce.com Crm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Salesforce.com Crm to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Salesforce.com Crm has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Salesforce.com Crm even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Oracle vs. salesforce.com, is just above the industry average. Salesforce.com Crm needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Salesforce.com Crm has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Salesforce.com Crm supply chain. Even after few cautionary changes mentioned in the HBR case study - Oracle vs. salesforce.com, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Salesforce.com Crm vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Oracle vs. salesforce.com HBR case study mentions - Salesforce.com Crm takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Salesforce.com Crm has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Salesforce.com Crm has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Oracle vs. salesforce.com should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Salesforce.com Crm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Oracle vs. salesforce.com can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Salesforce.com Crm products
– To increase the profitability and margins on the products, Salesforce.com Crm needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Oracle vs. salesforce.com | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Oracle vs. salesforce.com are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Salesforce.com Crm can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Salesforce.com Crm has opened avenues for new revenue streams for the organization in the industry. This can help Salesforce.com Crm to build a more holistic ecosystem as suggested in the Oracle vs. salesforce.com case study. Salesforce.com Crm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Salesforce.com Crm to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Salesforce.com Crm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Salesforce.com Crm to increase its market reach. Salesforce.com Crm will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Salesforce.com Crm in the consumer business. Now Salesforce.com Crm can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Salesforce.com Crm can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Salesforce.com Crm can use these opportunities to build new business models that can help the communities that Salesforce.com Crm operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Salesforce.com Crm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Salesforce.com Crm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Salesforce.com Crm can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Salesforce.com Crm can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Salesforce.com Crm is facing challenges because of the dominance of functional experts in the organization. Oracle vs. salesforce.com case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Oracle vs. salesforce.com External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Oracle vs. salesforce.com are -
Regulatory challenges
– Salesforce.com Crm needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Oracle vs. salesforce.com, Salesforce.com Crm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of Salesforce.com Crm
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Salesforce.com Crm.
Shortening product life cycle
– it is one of the major threat that Salesforce.com Crm is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Salesforce.com Crm in the Strategy & Execution sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Salesforce.com Crm will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Salesforce.com Crm has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Salesforce.com Crm needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Salesforce.com Crm needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Salesforce.com Crm demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Salesforce.com Crm.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Salesforce.com Crm business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Salesforce.com Crm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Oracle vs. salesforce.com Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Oracle vs. salesforce.com needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Oracle vs. salesforce.com is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Oracle vs. salesforce.com is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Oracle vs. salesforce.com is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Salesforce.com Crm needs to make to build a sustainable competitive advantage.
