Professional Documents
Culture Documents
Creative Mind
Open Mind
Interpersonal Skill
by
Genius of “AND”
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Logical Thinking Creative Mind Open Mind Interpersonal Skill
Index
• General Information
– Current Situation
– Current Crisis
• Question 1
– Our recommendation to choose one
• Question 2
– SaleSoft’s current approach
• Question 3
– Benefits of CSAS
– Pricing of TH
• Q&A Session
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General Information
• Current Situation
- SaleSoft, Inc.
- Market Trend
• Current Crisis
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Current Situation
You are here > General Information > Current Situation
SaleSoft, Inc.
• Establishment
– 1993. 6. Founded by Greg Miller to develop & market CSAS
– Greg Miller : Chairman
engaged in application SW industry for 12 years
• Products
– Main Products: PROCEED : unfinished
• received good responses, Not converted to sales
– Alternative: TH : requires fine-tuning
• Focused on sales (part of PROCEED)
Market Trend
• Projected the SA market size in year 1995 would be $ 1 billion
Current Crisis
You are here > General Information > Current Crisis
Financial Situation
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QUESTION. 1
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Short Answers
You are here > Question 1 > Short Answers
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• Financial Situation
– “It costs a million dollars to develop and roll-out the remaining five over the
next 8 months.” (pg. 5)
– “Developing and fine-tuning TH will take at least 3 months and cost about
$ 200,000. And Marketing costs SaleSoft, Inc. half a million dollars over the
next 6 months.” (pg. 10)
• Human Resource
– “We do not have the resource to have separate sales forces for the two
products.” (pg. 9)
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• SaleSoft, Inc. needs about 1 million dollars over the next 8 months
For TH
$ 200,000 $ 500,000 Ongoing marketing
Development Marketing
Min 3 months 6~8 months ; 1/3 of marketing cost
for PROCEED
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• Desperate situation
– 3 months left before the Sales Automation Conference
– Within 8 months, SaleSoft has to make 5 remaining modules ready to keep
the commitments to the buyers of PROCEEDS
• HR requirements
– TH requires less resources including HR than PROCEED
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CSAS
Value
Needs being met
Customer by CMS
Needs Unmet
Needs
Targeted position of TH
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• Merits in selecting TH
– Quick Return
– Easy to sell TH (similar to CMS)
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Merits in selecting TH
You are here > Question 1 > Analysis on Competitive Environment > Merits in selecting TH
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PROCEED
• CSAS market is growing rapidly.
• Owing to the development of IT infra-
structure, CSAS market is expanding.
CASH COW DOG
Low CMS
High Market Share Low • In the early 1990s, market share of CMS
is up to 80%. (pg. 2)
• But, the market needs more integrated
solution.
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PROCEED
• The market share will fall down
• Customers are very skeptical about
CSAS and the ability of CSAS
vendors to survive in the long run.
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Trojan Horse
• TH will become Cash Cow product.
STAR QUESTION • With the growth, TH will gain more cash
High MARK flow, which will be converted to develop
the PROCEED.
Growth Rate
PROCEED
• With the support from the success of TH,
PROCEED will be enhanced in
technology and customization.
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QUESTION 2
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Short Answers
You are here > Question 2 > Short Answers
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• SaleSoft, Inc. does not pay attention to the relationship with Clients
• Greg Miller is too confident on the technical quality
– (Miller said) “The benefits are so great that customers will be eager to adopt
these systems at the earliest” (pg. 7)
Marketing
Initiated by Consultants
1 2 3 4
Realization Evaluate
Determine Decide
by Senior Potential
Methodology Type of SA
Management Benefit
5 6 7
Pilot test
Modifying
& Roll out
After feedback
Customizing
Establishing System
By Vendors
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– In this market, the Completed good is very expensive and involves a high
level of risk for Customers
– In this case, customers want to add modules over time without risking any
loss in past investment
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• With introducing the patch version, SaleSoft, Inc. can maintain and
enhance the sales volume.
Sales
Sales
Trojan
Horse
Time Time
New Patch
Introduction
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600
Target Industry
500
400
300
200
100
624 510 299 275
0
finance computer electronics others
President / CEO
Industry
Admin. Assistant
Software Industry
Director of Director,
Exec. VP/CFO VP Sales VP Marketing
Development Support Services
Computer,
Washington Office Equipment
DC
Boston, MA
Electronics,
Regional Electrical Equipment
Atlanta, GA
Columbus, OH
……….
From Exhibit 8
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QUESTION 3
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• Cost reduction
Without PROCEED With PROCEED (million $)
Sales Orig. Value Orig.Value + Add’l sales = New Value
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Pricing of TH
You are here > Question 3 > Price of TH > Concept
Willingness to pay
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Pricing of TH
You are here > Question 3 > Price of TH > Procedure
• Order of Pricing
1) Basically, TH is the same as the present status of PROCEED.
( since only Sales System is completed in PROCEED)
2) So, we can use the Value-based pricing methods and the incremental
value can be measured based on existing customers.
- Customers have different potential for improvements according to
the industries they belong to.
Î Price TH according to the industry (in such aspects as mark-up)
3) Identify potential of improvements in terms of reduction of days not
related to performance, reduction of costs, increase of sales and so on.
- if exact data are not available, use projection or estimate based
on statistics, related data or logics
4) With quantitative methods like those used before, evaluate potential
improvements
Î Decide MAXIMUM
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Pricing of TH
You are here > Question 3 > Price of TH > Procedure
• Order of Pricing
5) Analyze its cost structure
Î Decide Minimum
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