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SaleSoft Inc.

Gaining momentum in the


Sales Automation Market
Marketing Case Study 3
Group 5:
Aditi Tapriya
Anushree Jain
Afreen Sarang
Chetan Desai
Fabian Scheler
Harsh Kataria
Kaushal Khatore
Abhijeet Banerjee

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SaleSoft Inc.

Table of content

1.
2.
3.
4.
5.
6.

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Company
Snapshot
Industry Overview
Current Options
SWOT Analysis
Financial Analysis
Conclusion
SaleSoft Inc.

Company Snapshot

Founded:
1993
Industry:
Software
Revenue:
USD 0.31 Mio. (1994)
Management: Gregor Miller (Founder and
CEO)
Products and Business:
Develops and markets Sales Automation
Software (PROCEED)
in USA and offers related services
A promising start up in the emerging
software industry

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Industry Overview

Sales Automation Software:


Software for management of sales activities
Current market penetration: 26%
Current and Predicted Market Volume

6
Market
Volume in USD Bln.
Main Growth Driver:
Expecte
5
d CAGR:
1) Declining laptop prices
4
40%
3
2) User friendly software
3) New communication2
1
technology
-

1995 1996E 1997E 1998E 1999E 2000E

Low market penetration leaves space for high


growth rates
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Industry Overview

Average sales per company: USD 5 Mio. (Excl. ST


and BCR)
70% of all ventures get screwed out within three
years
Current Market Shares
Strong focus on simple CMS Software
Sales
Technologie
s
Brock
Control
Systems

Low market entry barriers lead to high


fragmentation
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Current Options for SaleSoft

Currently offering PROCEED


(Basic CMS Software with three modules for
Sales System)

Company things about developing further 5


modules
Inclusion of Marketing and Services Systems
First move in CSAS market

Alternatively considers roll-out of Trojan Horse


SaleSoft questions investment in additional
Product
first
PROCEED modules
Upgrade for existing PROCEED modules

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SWOT Analysis PROCEED CSAS


Weaknesses

Strenghts
Innovative product
. Interested customers
. Higher profit margin
. Designed for Windows
.

.
.

Opportunities
Low competition in
CSAS
. High market entry
barriers
. High expected growth
rates
.

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Skeptical customers
Costly and time consuming
development and
marketing
Possible financing problems

Threats
Can not serve all
customers
. Risk of financial distress
.

SWOT Analysis Trojan Horse


Strenghts
Low customization
necessary
. Less costly and time
consuming in
development and
marketing
Opportunities
. Easy to sell
. Broad market
.

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Weaknesses
No differentiate product
. Low margins
. Delayed entry in CSAS
market
.

Threats
Strong and many
competitors
(Microsoft/Lotus)
. Demand shift towards
more integrated
systems
.

Synopsis SWOT

Entering CSAS market is riskier


Offers greater opportunities for long term growth
SaleSoft could build competitive advantage
Boost in revenues and profits would offset
costs

Better future prospectives with CSAS venture


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Financial Analysis

Add. R&D Cost: USD 1 Mio. (1995 and 1996)


Add. Mark. Cost: USD 1.5 Mio. (1996)
Add. Revenue:
USD 1.92 Mio. (1996)
USD 3.84 Mio. (1997)

External financing in 1996 necessary


Assumptions:
Units sold in 1995 and 1996:
2400
Revenue per unit sold:
USD 2400
Margin after directly related cost: 60%

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Financial Analysis

USD 2 Mio. capital Increase in 1996


USD 0.15 Mio. debt issuance in 1995 and 1996

8000

Net Income in TUSD

6000

80.0%

Equity Ratio in %

60.0%

4000

40.0%

2000

20.0%
0
1993 1994 1995E 1996E 1997E 1998E 0.0%
-2000
1993
-20.0%
-4000
Net Income PROCEED CMS
Net Income with PROCEED CSAS

1994 1995E 1996E 1997E 1998E


Equity Ratio PROCEED
CMS

Additional debt issuance would provide base


for profit boost
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Conclusion

SWOT Analysis suggests development of further


modules
We do not see midterm benfits of TH
implementation
Financial Analysis forecasts break even in 1997
With further financing, investment would be
possible
Company has allready been able to raise USD
0.18 Mio. in debt in 1993
CSAS promises bright future for SaleSoft

We suggest development of further PROCEED


modules
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THANK
YOU

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