Prepared by the students of advanced strategic management at the MBA program of IE Business School, this presentation looks at the business strategy of Salesforce.com, analyzes its competitive positioning and performs a SWOT analysis, and explores the future trends and how they will affect it.
RSA Conference Exhibitor List 2024 - Exhibitors Data
Strategic Scenario Analysis - Salesforce.com
1. Leading the Enterprise Software on Cloud
Advanced Strategic Management in Technology Intensive Industries
Group D
Anurag Esteban Farid Jason Rachel Vishal Yana
IE Business School
2. Evolution of the Company
1999- Founders launch salesforce.com in small apartment
in San Francisco
2001- launch first on-line sales automation solution aimed
at CRM application market
2003 – 400+ employees with operations in
USA, Australia, Japan, Ireland, UK, France, Spain and
Germany
2004 - IPO In NYCE, raising USD 110 million
2006-2010 – growth through M&A
3. Business Model
Revenues - USD 1.6 billion – 27% Customers - 92,300 customers
growth worldwide, a net increase of
Fastest growth 20,300 – 27% of Growth
Model Value
Add on
applications Up to ½
– small fee the costs
Enterprise
Third Party
Software -
Developers
$125/user
Faster
AppExchange SalesForce PaaS ?? Hassle
Free
4. Growth Strategy
Acquisitions Tie Ups
2008:Google - combining Google AdWords
2010
with Salesforce on-demand CRM
• Jigsaw Data Corp
2009:IBM,LotusLive workflow – Integrated
• Activa Live Chat
Salesforce
• Heroku
2010:Bodhtree - consulting and
• Ecacts
implementation partner
2011
2010: Fujitsu – consuting and sales
• Dimdim
2011: Intuit - provide accounting and CRM
• Manymoon
software together
• Radian 6
• Merrill Lynch - 25,000 seats (largest salesforce.com customer)
• Cisco - 15,000 seats SunGard (this was Salesforce.com's first 1,000 seat license)
• SunTrust Banks (> 2,000)
• ADP (> 2,000)
• Advanced Micro Devices (> 1,000)
• General Electric (> 1,000)
A single customers does not account for more that 5% of the Revenue
6. Competitive Analysis
Buyer Power
Medium
Substitution Internal Rivalry Entry & Exit
Medium High High
Supplier Power
Low
7. SWOT Analysis
S • Brand W
• Scalability • Single product
• Market position • Size
• Little competition • Seasonality in Billings
• Financial stability
• Security
O • Expansion of complementary
T • Entry of large (>$10B) firms
products • Competition in the Cloud
• Growing On-demand CRM Computing industry
market • Competition in the CRM
• International Expansion Industry
9. Future Strategies
The greatest risk to Salesforce.com is the ease of
entry into the cloud-based software market.
• Building network effects
– Apps and add-ons
• Market segmentation
– Different offerings for industries or business size
• Innovation
– Building new business processes into the tool
– Expanding service offering
Buyer Power:Salesforce.com’s main customers are Enterprise-level applications in major companies. For these companies, the switching costs are very high.Supplier Power: This is low because the basic requirements for building the software are found on a commodity market.Entry & Exit: The barrier to enter this market is extremely low. After the software is developed, there are virtually no more costs. Economies of Scale are huge.Substitution: The ease of entry drives many competitive offerings. Industry specific software solutions could pose a threat.Internal Rivalry: The top 4 companies have only a 60% share of the market, leaving many smaller businesses competing on the fringe
Buyer Power:Salesforce.com’s main customers are Enterprise-level applications in major companies. For these companies, the switching costs are very high.Supplier Power: This is low because the basic requirements for building the software are found on a commodity market.Entry & Exit: The barrier to enter this market is extremely low. After the software is developed, there are virtually no more costs. Economies of Scale are huge.Substitution: The ease of entry drives many competitive offerings. Industry specific software solutions could pose a threat.Internal Rivalry: The top 4 companies have only a 60% share of the market, leaving many smaller businesses competing on the fringe