overview of sap's strategy
DESCRIPTION
Just a simple overview of SAP's industry position. We prepared it for marketing classTRANSCRIPT
Esteban Tapia, Olimpiu Capra and Javier Valera Marketing Management
SAP AG is an international public owned software developer and consultancy corporation offering solutions to businesses
SAP is the world's largest business software company and the third-largest independent software provider in terms of revenues
1. Terminology2. History of the company3. Mission statement4. Products and strategy5. Competitor map industry6. The market7. Main competitor8. According to SAP…9. Competitive positions10. Conclusion
B2B: Business to business solutions ERP: Enterprise Resource Planning CRM: Customer Relationship Management SaaS: Software as a service (on Demand) Installed Base: Current Customers Tiers: Layers of complexity
Founded in 1972 by five former IBM engineers in Mannheim In 1976 it moved its headquarters to Walldorf In 1973, the SAP R/1 solution was launched. In 1979, SAP launched SAP R/2. In 1981, SAP brought a completely re-designed solution to
market. In 1992 R/3, SAP followed the trend from mainframe
computing to client-server architectures. (3-tier solution) The development of SAP’s internet strategy with
mySAP.com redesigned the concept of business processes Business Suite (with ERP 6.0)
“To be a pioneer and leader in the creation and delivery of valued solutions for strategic business processes that enable our customers' realization of their business goals and objectives”
Business Suite A complete offering of internal measurement and
analysis tools for all business needs: ERP: The current version is SAP ERP 6.0 and is
part of the SAP Business Suite. CRM: helps companies acquire and retain
customers, gain marketing and customer insight PLM: helps manufacturers with product-related
information SCM: helps companies with the process of
resourcing its manufacturing and service processes
SRM: enables companies to procure from suppliers
Netweaver Platform Development platform (SDK) Market development through strategic partnerships
SAP Business All-in-One Business solutions focused on SMEs (PYMES) Interesting for SAP due to big growth opportunities
Business byDesign Saas for SME’s
Business Objects BI and reporting
Very long product life-cycle High investment Perceived as ‘game changing’ Constant improvement releases
(maintenance) Highly customizable Industry focused
Fortune 500
2nd Tier
3rd Tier
Medium (<2500 employees)
Small
OOSAPSAP
ERP(26.8%)
CRM(22.5%)
SDK
SCM
SRM
PLM
Oracle(12.9%)
Oracle(16.5%)
+Salesforce
(10.6%)
MS SAGE
MS
Others(44.5%)
2nd Tier
2nd Tier
SaaS
SaaS
BI
Business Objects
SASOracle
+ Hyperion
MS
Business solutions market has experienced a remarkable change in the last years due to increasing competition among leading firms development of new products
2 main products: ERP and CRM. Analyzing segmented market share: For ERP:
SAP has increased from 30% to 35% of market share from 2005 to 2008, despite big costs and long implementation. Undisputed leader of the market
Oracle has gone from a 21.7% to a 28% of market share, thanks to the acquisition of some smaller companies
Oracle has collected an impressive customer list and portfolio of intellectual property , but still quite far from SAP in terms of market share
SAP has the highest percentage of customer satisfaction The trend for SAP is not to increase too much the market share, but focusing in
current customers and increase their satisfaction. For CRM:
SAP is also the leader, with a 22.5 % of market share, a 0.8 % drop with respect to 2008
Similar market share, high rivalry
Oracle Second player in ERP market Main CRM software provider Its strategy is based on product innovation and
increasing market size through acquisition of smaller firms (Relsys, Sophoi, Sun Microsystems, HyperRoll, GoldenGate, Salesforce…)
Due to their aggressive strategy they put themselves in all the markets SAP is working in
For SAP, positioning is based on these points: Differentiation (Porter)
Offering the possibility of total customization of the product Long product lifecycle and even longer customer life (around 20 years)
Focus (Porter) SAP is concerned about serving major multinational corporations SME’s are just a strategic placement, not their main revenue source They also focus in certain industries that require high technology
software, like aerospace, automotive, chemicals, engineering and construction, or industrial machinery
Customer intimacy (Treacey & Wiersema) Customers help to develop the solutions, providing their feedback to the company
about what things can be modified or improved
Co-innovation (through their ecosystem)
Organic Growth (Customer base) Smart Acquisitions (buying
competitors, technology uses)
New Demand New users
The Netweaver ecosystem
Improve productivity Improve added value
Through constant improvement of their solutions
Win market share Win competitors
Acquisition of Business Objects
Defend position Mobile defense
SaaS (Business byDesign) Flanking defense
Facing Tier 2 vendors with Business All-in-One Adding market necessities to their offer
SAP has become slow and sluggish Oracle is a big threat High cost products (price*time) The ‘cloud’ is reducing the size of the
market Short run safety, long run bleak SaaS as a lifeboat