Case study paper on Salesforce.com
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Salesforcecasestudypaper.pdf
CASE STUDY PAPER ON SALESFORCE.COM 1
Case Study Paper On Salesforce.Com
Bhargav Alaparthi
New England College
Organizational Economics
Hyder - Davis
02/07/2021
CASE STUDY PAPER ON SALESFORCE.COM 2
Case Study Paper On Salesforce.Com
Abstract
Salesforce.com is a US based software company that deals in cloud-based products and services.
Headquartered in San Francisco, California, it offers Customer Relationship Management (CRM)
services and is increasingly focused on analytics, application development, market automation and
customer service. It is currently one of the best companies in the US and one of the best places to
work for according to Fortune Magazine. With more than a decade of experience alongside several
successful engagements, Salesforce has provided its customers with impeccable consulting,
assessment, integration and support services all of which have contributed to its good reputation
worldwide. An analysis of Salesforce’s competitive landscape shows that despite enjoying a
competitive advantage in the industry, there is a need to improve its strategies so that it maintains
it. Research shows that if it does not do this, companies such as Oracle and SAP may overtake it.
This points to the need for Salesforce to improve on its strategic strengths and work on or resolve
its weaknesses.
Key words: customer relationship management, competitive advantage, competitive landscape
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Overview
Salesforce.com is a cloud-based software company in the United States with headquarters
in San Francisco, California. It also has a regional headquarter in Morges Switzerland that covers
Africa, Europe and the Middle East. It was founded in 1999 by Marc Benioff who was a former
executive at Oracle alongside Parker Harris, Frank Dominguez and Dave Moellenhoff as a
software as a service (SaaS) company (Sneha & Krishna Prasad, 2018). It specializes in Customer
Relationship Management (CRM) beside selling enterprise applications that are focused on
analytics, application development, market automation and customer service. It also deals in
service cloud, sales cloud, marketing cloud, commerce cloud and community cloud services which
are part of the CRM service.
The company therefore represents a considerable authority in programming and cloud
based products and services. It boasts as one of the best powerful and flexible web-based supplier
in the market (Sneha & Krishna Prasad, 2018). It is currently one of the best companies in the US
and one of the best places to work for according to Fortune Magazine. It is a publicly traded
company under the New York Stock Exchange (NYSE). It uses various technologies such as
Apex, Visual force and Lightning. Apex is an exclusive programming technology that can be used
to execute complex of modified capacities. Visual Force refers to a view control technology that
provides a platform for user interaction while Lightning is a segment based technology on which
the company’s mobile application is based. With more than a decade of experience alongside
several successful engagements, Salesforce has provided its customers with impeccable consulting,
assessment, integration and support services all of which have contributed to its good reputation
worldwide.
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Competitive Landscape
Salesforce.com is a leading company in its industry and it maintains its prominent position
through a careful analysis of its strengths, weaknesses, opportunities and threats. Through this, it
identifies the internal strategic internal and external factors and how it can optimize them to
maintain a competitive edge in the market. Although it is a dominant force in the world of CRM,
there are several alternatives that people can consider and these constitute some of its biggest
competitors.
According to Sneha and Krishna Prasad (2018), the main competitor of Salesforce.com is
Oracle Corporation. Other potential competitors include SAP, Net Suite and Yammer. Oracle just
like Salesforce prioritizes CRM and although it falls behind in terms of market share, it focusses on
business acquisitions which may take so much from Salesforce going forward. It is currently
focused on custom integrations and provides a robust system of analytics, full cloud and browser
support as well as highly rated mobile applications.
SAP deals in enterprise technology and for over 50 years, it has continued to provide
industry solutions to larger international markets. As an international software company, SAP also
offers multiple clouds within its integrated network. For instance, it offers marketing cloud, data
cloud, sales cloud, commerce cloud and service cloud thus presents a major competition to
Salesforce’s multiple cloud services (Bushnell, 2021). Net Suite offers a cloud based CRM
solution that targets small and medium sized organizations. It caters to the needs of thousands of
customers in manufacturing, media, retail and in distribution industries.
The fact that CRM space has large, midsize and small companies means that there are
several opportunities that Oracle, SAP and Net Suite can tap for business growth and development.
It also means that customers in CRM have several options or alternatives aside from Salesforce
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thus presenting a fierce competitive landscape for the organization. Salesforce faces stiff
competition from organizations that are also moving away from enterprise-only market into large
and mid-sized companies and those that are beginning to offer new and modern approaches to
buying SaaS (Bushnell, 2021). Although Salesforce is making several improvements in preparation
to counter its competition, the strength of the competitive landscape presents future hurdles for the
company.
“What They Got Wrong” Analysis
Although it is one of the leading companies in the market, there are several things that it is
not doing right and therefore needs to improve on them to ensure it does not lose its competitive
advantage in the industry. First, Salesforce is not good at carrying out sufficient product and
service demand forecasting (Fern Fort University, n.d). This situation leads to a high rate of missed
lucrative opportunities which places it at a disadvantage relative to its competitors in the market. It
also causes it to keep high inventory which is not good for business growth and development.
Second, the company’s’ business strategy has not successfully tackled the challenges that new
entrants present in the market. As a result, it has lost a segment of its market share in various niche
categories.
Third, the company boasts of limited success outside its core business. Although it is a
leader in its industry, it has not successfully ventured into new products and services outside its
core business segment. This shows that Salesforce depends on its key markets for profitability
(Pratap, 2018). This is evidenced in its slow international expansion hence the division of its
market segments into Asia Pacific, Europe and the Americas. However, it heavily depends on the
American markets for most of its revenue. Although it gains a lot of revenue by focusing on the
American market, this has denied it the opportunity of international expansion.
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Salesforce also experiences a high attrition rate as compared to other organizations in the
same industry. Due to this, it has to spend a lot of money in training and developing its employees
in readiness for the dynamic business environment. Fourth, Salesforce has not prioritized the value
of new technologies. Despite being a leader in cloud based software, it has not focused its attention
on technological expansion (Fern Fort University, n.d). This has prevented it from integrating its
processes across the board so that it can realize seamless business productivity. Currently, its
technological investment is not at par with its business vision.
Fifth, Salesforce has failed in its pricing and usability department. Its software applications
are too expensive and this has scared several companies away to other CRM alternative providers
such as Oracle and SAP. For small businesses, its pricing may be a big issue and they may instead
consider other providers in the industry. A full version is available for $125 monthly and this is not
friendly to many small businesses. It is also does not favor small businesses in terms of its
complexity.
“What They Got Right” Analysis
Salesforce has mastered its strategic strengths which have helped it to thrive in the market.
These constitute some of the things that the organization is doing right including how they enabled
it to protect its market share in existing markets and to penetrate new markets. As a leader in the
CRM space, the company continues to explore its core competencies and technological expertise
so that it can offer a range of CRM solutions to its clients.
It continues to empower companies to enhance their customer relations by affording them
new solutions and technological features to deal with their underlying challenges. It targets all its
customers regardless of size so that it can connect them with their customers through new and
emerging technologies such as social, AI, Internet of Things (IoT) and cloud-based technologies.
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It is currently focused on acquisitions so that it can strengthen its product portfolio. Acquisitions
form part of its business strategy that has enabled it to improve its revenues and maintain its
competitive position in the market (Fern Fort University, n.d). It also prioritizes strategic
partnerships that have enabled it to boost the development of new technologies and offer seamless
solutions to its customers.
Salesforce also makes good use of its research and development (R&D) so that it can drive
innovation in new product development. For instance, after the launch of its Analytics center in
2017, it has managed to deliver advanced analytics to millions of its CRM users. It also uses
Artificial Intelligence(AI) which has enabled the company to gain valuable insights, maximize
sales and improve customer service (Analytics Insight, 2019). The company has therefore
prioritized the areas of performance, functionality, availability and acquisitions. The company’s
growth strategies also lie in making valuable investment decisions, cross-selling, up-selling,
strengthening and expanding partner ecosystem and extending market capabilities.
The company also boasts of a strong dealer community. Over the years since its
establishment, Salesforce has successfully established a culture among its dealers and distributors
by encouraging them to promote its products and by investing in training in training the sales
representatives so that they can educate customers on how they can maximize the benefits of the
services and products of Salesforce. Its suppliers are also very reliable thus enabling it to overcome
any supply chain bottlenecks. As a result, it continues to command a competitive advantage in the
industry. The company also has expertise in penetrating new markets and establishing a strong
revenue flow.
Salesforce also has a highly skilled workforce based on the successful training of its
employees and the availability of a variety of learning programs for them. Through this, the
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employees get motivation to perform well in their responsibilities. It also has a strong free cash
flow which provides it with enough resources to expand into new markets and develop new
products for customers.
Conclusion
Salesforce is on the right track in terms of maintaining its leadership position in the
industry. Evidence shows that it enjoys a competitive advantage as compared to its competitors
such as Oracle and SAP which offer similar products and services. Since its establishment in 1999,
the company has slowly grown into one of the best cloud based software providers offering
sufficient CRM services to its customers. This growth can be attributed to its strong leadership and
clear business strategy and vision. Although it only has three market segments in Europe, America
and Asia respectively, there is potential for international expansion. However, it should prioritize
other areas that it has neglected. For instance, it should not depend on America for its revenues but
rather consider ways of expanding into new markets and venturing into new products and services.
The competitive landscape indicates that organizations such as Oracle are slowly expanding into
the international arena and venturing into new products and markets. As a result, small businesses
which feel that Salesforce’s pricing and complexity does not favor them will migrate to more
favorable CRM providers. This means that even though it is basking in the glory of being a leading
CRM provider, it should not remain complacent. Complacency may cause it its competitive
advantage and negatively affect its market share and revenue.
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References
Analytics Insight. (2019, September 20). UNVEILING BUSINESS STRATEGY: SALESFORCE.
Retrieved from https://www.analyticsinsight.net/unveiling-business-strategy-salesforce/
#:~:text=Salesforce's%20growth%20strategies%20lie%20in,markets%2C%20extending
%20go%2Dto%2D
Bushnell, M. (2021, January 25). Can Salesforce Stay on Top of CRM Providers in 2021? Business
News Daily. Retrieved from https://www.businessnewsdaily.com/11203-salesforce-crm-
competition.html
Fern Fort University. salesforce.com SWOT Analysis / Matrix. Retrieved from
http://fernfortuniversity.com/term-papers/swot/1433/386-salesforce-
com.php#:~:text=SWOT%20analysis%20is%20a%20vital,in%20its%20current
%20business%20environment.
Pratap, A. (2018, September 2). Salesforce.com SWOT Analysis. Retrieved from
https://notesmatic.com/2018/09/salesforce-com-swot-analysis/#a3
Sneha, M. S. & Krishna Prasad. K. (2018). Analysis of Business Strategies of Salesforce. com Inc.
International Journal of Case Studies in Business, IT and Education (IJCSBE), 2(1), 37-44.
