A CASE ANALYSIS ON SaleS Soft, inc. (a)

Submitted By

Akshat Kumar Joydeep Bhattacharya

Rishi Nair

Date: November 1, 2013

CASE ANALYSIS Problem statement: Whether or not to introduce the Trojan product Facts:

Salesoft was established in 1993 it worked in the sales automation industry

SA industry was dominated with around 300 small players and a very few big names like Sales Technologies and Brock Control systems

CSAS and CMS were the major two types of SA products. CSAS was rather a

very complicated model which included Sales, Marketing and Services. CMS was a small sales management tool used by small firms.

The cycle times of selling a CSAS product was in the range of 21-30 months.

Whereas, a CMS could be sold in 2-3 months

PROCEED was able to implement only the sales module in the existing customer base. The rest will be implemented within 1 year by June 1996

The TH was more or less similar to CMS and lacked integration. However, it was

simple to operate and required no technical expertise Recommendation The company should continue with its progress on developing the CSAS application at the earliest and should not think of getting in the TH/ CMS market. There is a lot of untapped market in CSAS and competition is not much. The main reasons:

The company is presently working in the niche segment of CSAS where the opportunity of making profits is very high

The number of players in the CSAS domain are quite less The current market dynamics suggest that there would be a lot of competition in

the CMS domain where Salesoft is thinking of launching the TH Going with TH with all existing prospects, is highly unlikely that customers may

go for the complete CSAS in future.

Facts supporting the decision:

Salesoft has many hot prospects lined up. The only reason that they are unable to sell more in the market is due to the fact that the entire module of CSAS is not yet complete even in existing customers. Hence, when the CEO of the prospective companies ask for references, Salesoft is not able to provide the same. Hence, once the implementation of all the three modules are completed, this might lead to a large number of closures currently in pipeline

The nearest competitor Sales Technologies was not providing support on Windows operating system, which was a major positive point for Salesoft providing the application on Windows platform. Application on windows lead to a saving in the learning time.

Salesoft does not have a separate sales force for TH and CSAS. In case Salesoft asks the existing salesforce to sell both TH and CSAS, the reps will prefer to sell TH as it is a relatively saleable item and takes a very less time to close the deal. Also the technical expertise required in installation and implementation of TH product would be quite less.

There is a huge untapped market as all the vendors together have sourced just

around 130 accounts. There are a total of 4446 firms which are potential market of the CSAS sourcing

The primary and long term vision of Salesoft is growth. They are into a domain

where the typical sales cycle lasts for 2-3 years in some cases. The company has come into existence just before two years. Moreover, they do not have a fully developed running model developed yet. Hence, it would not be wise to exit from the lucrative CSAS development and go for a product which may give some bouts of gain in the long term, but it already flooded with competitors and may get intense in the long term.

From the data, it can also be seen that to all the 5 customers to whom Salesoft

have been successful in selling the product, Salesoft has managed to sell at a premium price, more than the large established competitors also. (avg 480000 for 200 users). This provides an insight upon the superiority of the product they sell in the market due to which these customers paid a premium

Strengths:

One of the very few players in the market for CSAS Trained workforce PROCEED works on Windows platform which makes it easier to implement and

train Weakness

Full-fledged working model of CSAS yet ready No consultant tie-ups

Opportunities

High pipeline of projects waiting to be closed once the entire module is ready Huge potential of the CSAS market which is yet unexplored All the players in this domain are relatively new Tie up with consultants or experts could bring in new business out of the

consultants contacts Threats

Many established players may see this domain as lucrative and may compete in the future

In smaller markets of CSM, the market is already flooded with several small players