Blue Ocean Strategy Salesforce
Blue Ocean Strategy
A Case Study on Salesforce.com
Presented by :
Ashley Molina
Niranjan Zende
Siddharth Kumar
Zain Yusuf
What is a Blue Ocean ???
Blue ocean is nothing but an analogy to describe the wider, deeper potential of a market space that is yet to be explored.
They may be termed as industries which are
• non-existent today
• Untainted by Competition
• Demand is created and not fought over
• Growth is profitable and rapid
• Competition is made irrelevant
The theory is in direct opposition of Porters’ Five Forces model
Pain Points of Existing CRM
Solutions
● Complex requirements and systems infrastructure required to be integrated with the applications. Small businesses could not afford these costs or accommodate the lengthy deployment process
● Customers needed proof of concept before they committed to the purchase. This resulted in sales cycles of more than 3 months and lengthy technology discussions among tech professionals. It often took 18 to 24 months for companies to get the application to work at full functionality
Pain Points of Existing CRM
Solutions (contd)
● Cost of purchasing packaged CRM software was high.
A software license for 200 users was approximately
$350,000
● Price of software was typically 25% to 30% of the overall cost. Additionally, customers needed to spend money on infrastructure, support and maintenance, and on hiring internal or external professionals to implement and upgrade the software/hardware and train users.
Including these factors, the cost could easily exceed
$1.8 million in the first year and $4 million in five years
Pain Points of Existing CRM
Solutions (contd)
●Vendors normally pursued one of two strategies in the
CRM market:
● They either differentiated their product by adding more features
● Or they lured customers with big discounts at the time of closing the license agreement
●Over 60% of CRM deployments failed to work
The Salesforce Blue Ocean strategy: ● Innovation on the Product, Service and Delivery
A Case Study on Salesforce.com
Presented by :
Ashley Molina
Niranjan Zende
Siddharth Kumar
Zain Yusuf
What is a Blue Ocean ???
Blue ocean is nothing but an analogy to describe the wider, deeper potential of a market space that is yet to be explored.
They may be termed as industries which are
• non-existent today
• Untainted by Competition
• Demand is created and not fought over
• Growth is profitable and rapid
• Competition is made irrelevant
The theory is in direct opposition of Porters’ Five Forces model
Pain Points of Existing CRM
Solutions
● Complex requirements and systems infrastructure required to be integrated with the applications. Small businesses could not afford these costs or accommodate the lengthy deployment process
● Customers needed proof of concept before they committed to the purchase. This resulted in sales cycles of more than 3 months and lengthy technology discussions among tech professionals. It often took 18 to 24 months for companies to get the application to work at full functionality
Pain Points of Existing CRM
Solutions (contd)
● Cost of purchasing packaged CRM software was high.
A software license for 200 users was approximately
$350,000
● Price of software was typically 25% to 30% of the overall cost. Additionally, customers needed to spend money on infrastructure, support and maintenance, and on hiring internal or external professionals to implement and upgrade the software/hardware and train users.
Including these factors, the cost could easily exceed
$1.8 million in the first year and $4 million in five years
Pain Points of Existing CRM
Solutions (contd)
●Vendors normally pursued one of two strategies in the
CRM market:
● They either differentiated their product by adding more features
● Or they lured customers with big discounts at the time of closing the license agreement
●Over 60% of CRM deployments failed to work
The Salesforce Blue Ocean strategy: ● Innovation on the Product, Service and Delivery