Executive Summary
Salesforce.com has progressed from automation sellers to a developed cloud-based CRM software giant over the past years it has been operational . The company is one of the strong advocates of software as service and is among the frontiers in the current migration to cloud-based operations. Currently, there are many opportunities available for the company to explore, therefore not only does it use its current products alone but also these new opportunities to grow its business. The consistency of Salesforce annual share gives it a leadership position because of the effects across each product that is in areas of automation, customer service, marketing, and CRM spending. Salesforce has made a lot of success in cloud-based application CRM, with a well-established suite that includes automation, customer service, and e-commerce. However, the opportunities that are still available are many, and this gives the company a higher chance of expanding and delivering more deals of a variety of multiplications. The current changes in technology through the introduction of artificial intelligence and the internet of things has seen the company integrate these technologies into their applications.
Salesforce.com is the top of the CRM industry, the key players of whom focus primarily on helping corporations and small business in managing their customers, to bring value and build a long-lasting relationship between the client and the company. Salesforce provides customers a great platform that enables them connects with customers interactively. Salesforce products help to increase sales, promote a positive customer service experience and also provide tools used to assist in consumer marketing. With the addition to Salesforce, most companies see a boost in customer focus and stratification alone with a positive impact on the company's overall bottom line.
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CRM Opportunity
The Competitive Life Cycle o f t he Company
The company is at the growssth stage of the life cycle. Salesforce has been offering CRM services for a long time. With the introduction and changes in technology, the need to integrate new technologies to their applications is essential. These moves allow it to grow and meet customer needs. Statistics show that Salesforce increased its spending on CRM from 11% in the year 2011 to 19% in the year 2015. The budget shows that the company has already established itself in the market, and now they spend on improving its products and ensuring its consistent need in the market (Manchar & Chouhan, 2017) . The company is utilizing the advantage that Business enterprises are abandoning CRM developed internally, Reason being that they lack basic functionalities for example analytics, the interactive interface among others. The inability to internally build CRM to deliver these needs gives a challenge to a business in coming up with the demands of the modern business environment.
Barriers t o Entry t hat Competitors Face
Salesforce offers their products on Saas basis whereas the competitors for example SAP, Oracle and Microsoft provide their products as an on-premise application. It gives the competitors a significant challenge in switching to cloud-based service. Currently, the competitors spend more on striving to develop an entirely cloud-based solution ( Morningstar, 2019 ) . While Salesforce focuses on improving their already developed product the competitors are still on launch phase, this gives them a disadvantage in perspective of revenue, technology reliability and scalability. Therefore establishing their products on the market primarily shifting from on-premise to Saas application is the most significant barrier that the competitors face.
Massive Demand for Service In this fast pace changing the world we see more and more demand for automation. Companies need a service that will make their connection with customers more manageable and give them more time to work on things that build value. Product Differentiation Established companies have a huge brand following. They have a lock on their customer base and have build trust and loyalty with their name. New entrants will have the challenge of being able to afford market share and customer acquisition to building a following and disband established commitments.
Sales Cloud Analysis
Five K ey MOAT C onsiderations
First, the company has intangibles that it has been able to sustain its margins, which has significantly boosted the prices. There was a decline in intangible assets of Salesforce from 2015-2016, but they were able to recover profits in 2016-2017. The gains recorded exceeded the gains made before the drop. Secondly, c ost a dvantage s alesforce is financially ready, and therefore they can offer products to their customers at an affordable price . Thirdly, s witching c ost Salesforce has brand recognition due to its leadership position in CRM. With its high revenue and customer retention, the switching cost is low . Fourthly, n etwork e ffect Salesforce serves a variety of companies, including notable companies. Therefore they receive valuable feedback, thus giving the company sufficient data to ensure that they are providing the best services to their customers. Lastly, e fficient s cale the consistent growth of Salesforce over the past years gave the company the necessary resource needed to keep on developing their product line and value addition to the clients.
Important C onsiderations
Efficient Scale and Network Effect plays the most crucial role. The ability of Salesforce to scale given the company the resources they need to support such a large customer base. They take their profits and plow back into the developing of their network to ensure they meet the needs of the client. The Network Effects helps the MOAT in that they provide valuable feedback to ensure the improvements made are useful to the client ( Morningstar, 2019 ) . They are also able to provide word of mouth to other customers and give Salesforce more business which in turns adds to the ability to scale.
Service Cloud Analysis
Potters Five Forces
Industry rival is high, and this poses a significant problem to Salesforce. Top competitors such as SAP, Oracle and Microsoft are fighting to earn the top position. The company already leads in CRM by market share, but the barriers surrounding entry to the business is low especially to the already established business brands, specifically the cost (Smith & Sun, 2016) . Therefore industry rivals like Microsoft who have shown immense growth in revenue pose a high-level threat. Secondly, the risk of new entrants where it is a low-level threat to Salesforce, The major players that control the market have lots of years in brand development that has earned them brand loyalty, as well as they, have amassed resources that makes it impossible for a new entrant to make it to the top position. Thirdly, the threat of substitute which is a common threat to Salesforce, Cloud base services are easy to reinvent, but the problem with keeping the alternatives from being more of a risk is that security and bandwidth can be costly to maintain. Fourthly, the bargaining power of Suppliers which is a low-level threat to Salesforce, the Company has a wide range of products that are necessary to serve the needs of the clients. Lastly, the bargaining power of buyers which a high threat level to Salesforce, due to the availability of other CRM providers, the company has to be careful with the services they offer to the clients. A slight reluctance can make clients to choose different companies over them and can deter their efforts of maintaining top position.
Important Competitive Advantages
Salesforce has developed to the point that they can adapt to any need of the customer. They have the resource to customize their solutions to be suitable for any business no matter the scale. This ability is an excellent advantage since not all companies have the ability to adjust to these scenarios. These advantages have enabled Salesforce to be able to reach a point in the market where the competitors are unable to access.
Marketing Cloud Analysis
Summary Lay o f t he Land i n t he CRM Market
Salesforce is an international company that offers management applications. They base their solutions on cloud software as a service, majorly specializing in CRM. The Salesforce categorizes its service into four segments namely; essential sales, professional, enterprise and unlimited
Important Customer Advantages
The significant benefit accrued by an enterprise from doing business with Salesforce is Constant ground-breaking innovation. The company offers a free software update thus ensuring consistent access to advanced features. This service ensures that the client is operating on an environment with all the latest features and technology available in the market. Secondly, Salesforce offers customizable products due to cloud-based software's; clients are allowed to fine-tune the CRM to meet their desired interest. Lastly Salesforce the leader of CRM and therefore it has established itself and served large corporations; thus they are determined to keep market share providing outstanding customer service (Smith & Sun, 2016)
Commerce Cloud Analysis
Technology/Process Disintegration t hat Could Create Challenges
With the need to keep all the clients satisfied, Salesforce has a complex and analytical database that they must maintain regularly. As the company continues to grow through building clientele, new challenges emerge due to integration to the customer's databases. Therefore the company needs to address these challenges quickly to avoid overwhelming issues that may hurt the company's base.
Realistic Threats And Opportunities
Technology is advantageous as well as disadvantageous to the operation of a company in the CRM industry. It is essential that all bugs get fixed, and security patches produced at regular intervals to ensure the security of the client's data. Due to an extensive list of customers, a single breach in security can cause a lot of damage, and it will cost the company time and finance to recover. Salesforce has built its brand and developed customer trust, and if there is laxity in the company that breaks the trust, it will lose its customers making a quick decline in market share or even destruction of their market.
Conclusion
In conclusion, a business entity like Salesforce has established itself In the CRM market, to maintain the position it is critical that they observe the quality of service delivered, customer satisfaction as well as cope with the rapid growth of technology. The comparison of the technology used a decade ago is different from the current technology. Therefore there is a need to integrate the new technology to the products as well as ensuring the capacity to deliver modern demands of the business. The current business environment demands a wide variety of functionalities majorly analytics; the capacity to provide products with this ability gives it a more significant advantage at the market.
References
Manchar, A., & Chouhan, A. (2017). Salesforce CRM: A new way of managing customer relationship in cloud environment. 2017 Second International Conference on Electrical, Computer and Communication Technologies (ICECCT) . doi:10.1109/icecct.2017.8117887
Morningstar. (2019). May the Force Be With You: Moat-Salesforce.com Is the Wide Newest Software Empire . Morningstar.com . Retrieved 23 April 2019, from https://www.morningstar.com/stocks/XNYS/CRM/quote.html
Smith, W., & Sun, H. (2016). Salesforce Analytics Platform. Pro Salesforce Analytics Cloud , 77-85. doi:10.1007/978-1-4842-1203-5_4
