Competitive Advantage of Sales force.com - Case Study Example

Competitive Advantage of Sales force.com Introduction Sales force.com is a cloud computing company based in California and it is well known for its customer relationship management (CRM) products. According to Salesforce Foundation (2015), the company helps different people and organizations build lifelong relationships and deliver programs and services in innovative and efficient new ways. It provides tools needed to drive success such as mobile access, web portals, team collaboration as well as ability to build custom applications without having to code. As such, this paper seeks to analyse the strategic position of Salesforce in its operations. The paper starts by analyzing the situation, followed by problem identification in order to improve the operations of the company. The paper will also discuss the alternative solutions as well as recommendations that can be implemented. Finally, the paper will outline the action plan about how to implement the suggested recommendations. Situation analysis Basically, SWOT refers to strengths, weaknesses, opportunities and threats and this is a widely used technique by managers to determine the strategies that can be implemented by the firm in its operations (Strydom, 2004). As noted, Salesforce.com specialises in providing the CRM services and the section below outlines its SWOT analysis. SWOT analysis for Salesforce.com Strengths -Strong corporate social responsibility (CSR) program (offers grants technologies to communities and nonprofit organizations as well as higher education.) -Strong customer base-There are more than 24 000 non profit and higher education institutions using Salesforce in their operations Weaknesses -The company has been struggling to record profits since its inception -the prices are too high (the minimum charge according to its website is €60 and maximum above €300). Opportunities -The company is exemplary in its operations which gives it an opportunity to grow -there is growing demand of CRM services Threats -Competition in CRM is intense -failure to recognize privacy issues can pose a threat to the operations of the firm Problems The company is facing problems related to competition and its inability to realise profits from its operations. Essentially, businesses are primarily concerned with generating profits in their operations as their main goal. However, in this particular case, the main problem is related to intense competition facing the company in its operations. Indeed, competition is inevitable as a result of the fact that there are also other players in the environment in which organizations operate. Alternative solutions Porter (1985) has suggested that there are companies with viable strategies that can hardly matched by their competitors and this gives them competitive advantage. Thus according to this concept, strategies such as differentiation, diversification low cost leader as well as focus can give the firm competitive advantage depending on how they are implemented. In the case of Saleforce.com, differentiation and low cost leader are viable alternatives that can be implemented. Differentiation entails that the company ought to design its products and services in a unique way in order to gain customer superior value. This will help the company to gain more revenue by virtue of charging high prices for quality products offered. Low cost leadership is another viable alternative that can be implemented in order to improve the viability of the company. Through the utilization of this strategy, the firm seeks to be a low cost producer while retaining quality of the products offered. This is the best alternative for Salesforce.com. Recommendation It is recommended that Salesforce.com should adopt the low cost leader strategy in its operations since it has many advantages over other alternatives. Through the implementation of this strategy, the firm can be guaranteed of lowering its operational costs while managing to retain the quality of the products and services offered. As noted above, the company is struggling to generate profits from its operations against the background of intense competition in the environment in which it is operation. There are likely chances that the customers will be attracted by lower prices and they are likely to be motivated by the quality of the products and services at the same time. This strategy is feasible for Saleforce.com given that it already has a large customer base which means that more customers are likely to be attracted to the products and services offered by the company. The other issue is that the revenue generated will increase as a result of the positive increase in the number of customers who will be attracted to use the services offered by the company. Action plan Before implementing the low cost strategy, the marketers at Salesforce.com should conduct marketing research with the aim of generating as much information as possible about the market conditions prevailing at the current moment. This information should cover aspects such as competitors as well as the price structures for different services offered in this field. About two weeks are required to perform this action. Once this information has been compiled, it then should be presented to the management of the company which then should call a meeting involving different stakeholders to map the way forward with regards to the decisions that can be implemented to turn around the fortunes of the company. This process can take a period of about one week since there are different aspects that may need to be carefully discussed before implementing the final decision. When the final decision has been reached, the senior management takes a leading role in implementing the decisions. Different individuals are grouped into different categories and these would be responsible for implementing different aspects of the decisions agreed upon. After implementation of the decisions, the senior management can then monitor the situation in order to establish if the desired goals have been achieved. Monitoring can be done through the operations of the organization and this process is flexible in that changes can be made without necessarily halting the firm from carrying out its mandated task. Feedback can also be obtained to check if the company is obtaining its desired goals against its previous performance standards. References Porter, M. (1985). Competitive Advantage. Creating and sustaining superior performance. USA: The Free Press Salesforce.com (2015).Retrieved from: http://www.salesforce.com/eu/ Sales force foundation (2015). Retrieved from: http://www.salesfourcefoundation.com/ Strydom, J. (2004). Marketing. CT: JUTA. Read More