Case Study Description of Salesforce.com vs. Siebel (Abridged)
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.
Swot Analysis of "Salesforce.com vs. Siebel (Abridged)" written by David B. Yoffie includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Salesforce.com Siebel facing as an external strategic factors. Some of the topics covered in Salesforce.com vs. Siebel (Abridged) case study are - Strategic Management Strategies, Customers, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Salesforce.com vs. Siebel (Abridged) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
increasing government debt because of Covid-19 spendings, wage bills are increasing, etc
Introduction to SWOT Analysis of Salesforce.com vs. Siebel (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Salesforce.com vs. Siebel (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Salesforce.com Siebel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Salesforce.com Siebel 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 Salesforce.com vs. Siebel (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in Salesforce.com vs. Siebel (Abridged) case study
2. Improving business portfolio management of Salesforce.com Siebel
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 Siebel
Strengths Salesforce.com vs. Siebel (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Salesforce.com Siebel in Salesforce.com vs. Siebel (Abridged) Harvard Business Review case study are -
Ability to recruit top talent
– Salesforce.com Siebel is one of the leading recruiters in the industry. Managers in the Salesforce.com vs. Siebel (Abridged) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Salesforce.com Siebel has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Salesforce.com Siebel has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Salesforce.com vs. Siebel (Abridged) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Salesforce.com Siebel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Salesforce.com Siebel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Salesforce.com Siebel 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.
Organizational Resilience of Salesforce.com Siebel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Salesforce.com Siebel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Salesforce.com Siebel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Salesforce.com Siebel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Salesforce.com Siebel is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by David B. Yoffie can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Salesforce.com Siebel in the sector have low bargaining power. Salesforce.com vs. Siebel (Abridged) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Salesforce.com Siebel to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Salesforce.com Siebel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Salesforce.com Siebel 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.
Highly skilled collaborators
– Salesforce.com Siebel has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Salesforce.com vs. Siebel (Abridged) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Salesforce.com Siebel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Salesforce.com vs. Siebel (Abridged) 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.
Weaknesses Salesforce.com vs. Siebel (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Salesforce.com vs. Siebel (Abridged) are -
No frontier risks strategy
– After analyzing the HBR case study Salesforce.com vs. Siebel (Abridged), it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Need for greater diversity
– Salesforce.com Siebel has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Salesforce.com Siebel needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Salesforce.com vs. Siebel (Abridged) 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 Siebel has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Salesforce.com Siebel 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 Siebel 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Salesforce.com vs. Siebel (Abridged), in the dynamic environment Salesforce.com Siebel has struggled to respond to the nimble upstart competition. Salesforce.com Siebel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Salesforce.com vs. Siebel (Abridged) HBR case study mentions - Salesforce.com Siebel 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Salesforce.com vs. Siebel (Abridged) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Salesforce.com Siebel 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, David B. Yoffie suggests that, Salesforce.com Siebel is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Salesforce.com vs. Siebel (Abridged), is just above the industry average. Salesforce.com Siebel 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.
Aligning sales with marketing
– It come across in the case study Salesforce.com vs. Siebel (Abridged) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Salesforce.com vs. Siebel (Abridged) can leverage the sales team experience to cultivate customer relationships as Salesforce.com Siebel is planning to shift buying processes online.
Opportunities Salesforce.com vs. Siebel (Abridged) | 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 Salesforce.com vs. Siebel (Abridged) are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Salesforce.com Siebel in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Salesforce.com Siebel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Salesforce.com Siebel has opened avenues for new revenue streams for the organization in the industry. This can help Salesforce.com Siebel to build a more holistic ecosystem as suggested in the Salesforce.com vs. Siebel (Abridged) case study. Salesforce.com Siebel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Salesforce.com Siebel 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Salesforce.com Siebel to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Salesforce.com Siebel to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Salesforce.com Siebel can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Salesforce.com Siebel can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Loyalty marketing
– Salesforce.com Siebel has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Learning at scale
– Online learning technologies has now opened space for Salesforce.com Siebel to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at Salesforce.com Siebel 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.
Leveraging digital technologies
– Salesforce.com Siebel 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.
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 Siebel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Salesforce.com Siebel has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Salesforce.com vs. Siebel (Abridged) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Salesforce.com Siebel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Salesforce.com Siebel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Salesforce.com vs. Siebel (Abridged) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Salesforce.com vs. Siebel (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Salesforce.com vs. Siebel (Abridged) are -
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 Siebel business can come under increasing regulations regarding data privacy, data security, 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.
Increasing wage structure of Salesforce.com Siebel
– 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 Siebel.
High dependence on third party suppliers
– Salesforce.com Siebel high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Salesforce.com Siebel can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Salesforce.com vs. Siebel (Abridged) .
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 Siebel 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.
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 Siebel in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Salesforce.com Siebel can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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 Siebel.
Technology acceleration in Forth Industrial Revolution
– Salesforce.com Siebel 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 Siebel 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 Siebel needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Salesforce.com Siebel is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Salesforce.com Siebel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Salesforce.com vs. Siebel (Abridged) 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 Salesforce.com vs. Siebel (Abridged) 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 Salesforce.com vs. Siebel (Abridged) 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 Salesforce.com vs. Siebel (Abridged) 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 Salesforce.com vs. Siebel (Abridged) 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 Siebel needs to make to build a sustainable competitive advantage.
