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Esteban Tapia, Olimpiu Capra and Javier Valera  Marketing Management
<ul><li>SAP AG is an international public owned software developer and consultancy corporation offering solutions to busin...
<ul><li>Terminology </li></ul><ul><li>History of the company </li></ul><ul><li>Mission statement </li></ul><ul><li>Product...
<ul><li>B2B: Business to business solutions </li></ul><ul><li>ERP: Enterprise Resource Planning </li></ul><ul><li>CRM: Cus...
<ul><li>Founded in 1972  by five former  IBM  engineers in Mannheim </li></ul><ul><li>In 1976   it moved  its headquarters...
<ul><li>“ To be a pioneer and leader in the creation and delivery of valued solutions for strategic business processes tha...
<ul><li>Business Suite </li></ul><ul><ul><li>A complete offering of internal measurement and analysis tools for all busine...
<ul><li>Netweaver Platform </li></ul><ul><ul><li>Development platform (SDK) </li></ul></ul><ul><ul><li>Market development ...
<ul><li>Very long product life-cycle </li></ul><ul><li>High investment </li></ul><ul><li>Perceived as ‘game changing’ </li...
Fortune 500 2 nd  Tier 3 rd  Tier Medium (<2500 employees) Small
O SAP 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%)...
<ul><li>Business solutions market has experienced a remarkable change in the last years </li></ul><ul><ul><li>due to incre...
<ul><li>Oracle  </li></ul><ul><ul><li>Second player in ERP market  </li></ul></ul><ul><ul><li>Main CRM software provider <...
<ul><li>For SAP, positioning is based on these points: </li></ul><ul><li>Differentiation  (Porter)   </li></ul><ul><ul><li...
<ul><li>Co-innovation (through their ecosystem) </li></ul><ul><li>Organic Growth (Customer base) </li></ul><ul><li>Smart A...
<ul><li>New Demand </li></ul><ul><ul><li>New users </li></ul></ul><ul><ul><ul><li>The Netweaver ecosystem </li></ul></ul><...
<ul><li>Defend position </li></ul><ul><ul><li>Mobile defense </li></ul></ul><ul><ul><ul><li>SaaS (Business byDesign) </li>...
<ul><li>SAP has become slow and sluggish </li></ul><ul><li>Oracle is a big threat </li></ul><ul><li>High cost products (pr...
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Overview Of SAP's Strategy

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Just a simple overview of SAP's industry position. We prepared it for marketing class

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  • B2B: Business to business solutions ERP: Enterprise Resource Planning CRM: Customer Relationship Management SaaS: Software as a service (on Demand) running in the IT seller&apos;s servers, their unique value is that they reduce investment costs (through economies of scale) and produce a better use for licensing (no longer held to a physical machine, but held to users) Installed Base: Current Customers
  • 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  there was a change of R/2 to 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 (integration via Internet). Business Suite ERP 6.0 
  • Core: 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. Its previous name was called R/3. The &amp;quot;R&amp;quot; of SAP R/3 stood for real-time - even though it is not a real-time solution. The number 3 related to the 3-tier architecture: database, application server and client (SAPgui). R/2, which ran on a Mainframe architecture, was the predecessor of R/3. Before R/2 came System RF, later dubbed R/1. CRM : helps companies acquire and retain customers, gain marketing and customer insight PLM (Product Lifecycle management): helps manufacturers with product-related information SCM (Supply Chain Management):  helps companies with the process of resourcing its manufacturing and service processes SRM (Supplier Relationship management): enables companies to procure from suppliers
  • Netweaver platform A programming platform on which new solutions can be constructed. It focuses on the software developers in other industries. This product allows SAP to enter other markets with the help and knowledge of partnerships. It’s a way of market development. SAP Business All-in-One Business solutions focused on SMEs (PYMES) Interesting for SAP due to big growth opportunities For SAP a SME are those with less than 2,500 employees or less than $1 billion revenue Business byDesign Ondemand solutions Busines Objects BI and reporting
  • For SAP a SME are those with less than 2,500 employees or less than $1 billion revenue
  • SAP was a one solution company that had to defend it’s flanks through product development of their solutions creating Business Suite and Business Objects
  • Software market devoted to business solutions has experienced a remarkable change in the last years, due to increasing competition among leading firms and development of new products. 2 main products: ERP and CRM. Analyzing market share: For ERP: SAP has increased from 30% to 35% of market share from 2005 to 2008, despite its big costs and time of 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 also owns the highest percentage of customer satisfaction and benefits realization. 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 the trend of this market is to make companies’ market share to be closer and closer, so the competition is increasing more and more Oracle and Salesforce.com have also a big percentage of market share
  • Relsys (health sciences): On March 23, 2009, Oracle announced it agreed to acquire Relsys, a leading provider of drug safety, risk management and analytics applications for the health sciences industry Sophoi (communications): October 2009, Oracle has acquired substantially all the assets of Sophoi, Inc. (&amp;quot;Sophoi&amp;quot;), a provider of Intellectual Property (IP) Rights and Royalty Management software Sun Microsystems(Techonology Enterprise) PENDENT: On April 20, 2009, Oracle announced it has entered into an agreement to acquire Sun Microsystems (Sun). The proposed transaction is subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions HyperRoll (Performance management): September 2009, Oracle has acquired HyperRoll, a leading provider of financial reporting acceleration solutions with interactive reporting capability to support complex data calculation requirements ç GoldenGate (Technology middleware): July 2009, Oracle has acquired GoldenGate, a leading provider of real-time data integration solutions.
  • For SAP, positioning is based on these points: Differentiation:   products clearly differentiated from those of its competitors, offering the possibility of total customization of the product. Most of the other companies offer a basic product that can be customized once it is acquired. In the case of SAP, customer can decide which applications wants to include on the software they are going to buy and which not, thus they don’t buy a basic product, they buy their own product. This make the customer life cycle to be very long (around 20 years) and commitment to the company Focus:   SAP is more concerned about serving multinational or very big companies rather than offering its products to SME’s.   It is true that they offer its products to small and medium companies as well, but it doesn’t represent a great percentage of its revenue.   They also focus in certain industries that require high technology software, like aerospace, automotive, chemicals, engineering and construction, or industrial machinery. Customer intimacy (Treacey &amp; Wiersema): Customers help to develop the solutions, providing their feedback to the company about what things can be modified or improved
  • Protect, Grow, Acquire
  • SAP has become a large and sluggish firm. It&apos;s slow when compared to energetic Oracle Their products have high quality but their lengthy implementation times and high costs make them less interesting for modern agile firms   The internet is changing the market and the way firms are organized, through the cloud there is no need for large highly populated firms, SAP&apos;s targets are reducing everyday If they invest and develop SaaS properly it will be a way to survive, but Oracle is closing in very quickly, SAP&apos;s future in the short run is safe as long as their big customers are happy
  • Transcript of "Overview Of SAP's Strategy"

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