Essay PreviewMore ↓
There were several reason for the rapid growth of SAP America during mid and late 90’s. Throughout the evolution, the parent company of SAP America, SAP AG, wishes to provide a better product based on the evolution of technology as well as based on the changing customer needs, and thus invested consistently on R&D activities. 20-25% of SAP AG’s gross revenue were re-invested in research and development. In fact, almost one quarter of the company’s employees were working on research & development activities. Adding to the point, they carried no debts over a period of time as well as they didn’t book revenues until product delivery to customers.
One important strategic decision that Besier, the CEO (who believed that his products should be sold heavily on American market that that of Europe), took was to move away from the German model in several aspects. One of the aggressive decision he took was to put the entire sales force team under commission sales plan as a result of which, Chevron, the first multimillion dollar sale of R/3, evidenced to be a turning point for SAP. As an outcome, SAP outperformed all of its competitors by 300-800%, the success opened up other large accounts to company.
In order to increase the sale and number of customer to the company, SAP America established autonomous regional Profit & Loss (P&L) center with their respective sales, consulting and training teams. This resulted in every regional office to work on their own sales and marketing strategy to improving the sales. In order to penetrate the market and build a base, they created an industry strategy called ICOE’s, who act as bridge between the customer and product development organizations.
When there is a growth there will always be hurdles and challenges. There were two major challenges for SAP America, one is within the organization (or) internal challenge, the other challenge is external (or) challenge from competitors. The autonomy of regional office led the company to have different approached for same problem, thus results in providing same solution 4 times for 1 problem. Thus seems that SAP America is not acting as a single company. Resource Utilization is also a key challenge to the company, as the training and development service offered by the company is not utilized up to the mark in one part of the region, however it is utilized more in other regions.
How to Cite this Page
"Case Study: SAP America." 123HelpMe.com. 06 Dec 2019
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Keda’s SAP Implementation Case Study In order to retain its leadership position and continuing growing in the ceramics machinery industry, Keda refocused itself using a five year computerization plan, including the implementation of an Enterprise Resource Planning (ERP) system. Embarking on an ERP initiative was the correct issue for the organization to focus on considering the positive outcomes resulting from implementing SAP’s system. Keda could not afford not to implement an ERP system if it was to retain its leadership position and continue growing.... [tags: Enterprise resource planning, Implementation]
1378 words (3.9 pages)
- Synopsis For most its history, Wyeth had been a holding company that sold a variety of products through as many as a hundred companies organized into 10 subsidiaries. Wyeth grew primarily through acquisitions of other companies, in which the original management was usually retained. In the early ‘90s, Wyeth embarked on a strategy of focusing the company on healthcare and divesting all non-healthcare divisions. The company also started to consolidate operations including manufacturing and staff functions; however, Wyeth did not have the culture or business processes of a global organization.... [tags: business case studies]
1267 words (3.6 pages)
- Foxconn: Impact of globalization on labor conditions. Hon Hai Precision Industry Co., Ltd which trades as Foxconn Technology group or as the media calls it Foxconn has been in media limelight recently due to labor problems that have surfaced from the organization. Foxconn is a major equipment manufacturer supplier to electronics giants like Blackberry, Apple, Microsoft Xbox, Sony PlayStation and the Nintendo Wii. The internet has several articles and controversies regarding the deplorable worker conditions and cases of suicides by the workers.... [tags: Foxconn Case Study]
2511 words (7.2 pages)
- Mid term case study Problems Lael Matthews is facing an ethical dilemma issue. She need to decide which of three managers to promote. Each manager has their advantage and disadvantage own, and Lael’s superior has his or her own preference and concern as well. Lael have to make a decision that is moral, and hopefully can satisfy all the parties involved. According to the article, “Thinking Ethically: A Framework for Moral Decision Making”, developed by Manuel Velasquez, Claire Andre, Thomas Shanks, S.J., and Michael J.... [tags: Case Study, analysis, solution]
1238 words (3.5 pages)
- In the fall of 2001, business software pioneer Thomas M. Siebel was giddy as he looked ahead. Sure, the recession was hurting. But he claimed his company, Siebel Systems Inc. -- the leader in software for managing sales forces and customer-service departments -- would be more resilient than its competitors. ``Everybody is going to be naked,' Siebel said with relish. ``We're going to find out who are the dilettantes. We're going to find out who are the scumbags, and who are the sleazeballs. Everybody is going to be exposed for who they are.... [tags: Recession, Case Study, solution]
1495 words (4.3 pages)
- Course: International Business Management Activity: Case Study Company: PUMA |1924: |Rudolf and Adolf Dassler incorporate their first shoe company. | |1948: |Rudolf Dassler sets up his own company Puma Schuhfabrik Rudolf Dassler. | |1950: |Puma had established export ties to the United States, | |1959: |Rudolf Dassler's wife and two sons become part owners of the Puma Sportschuhfabriken Rudolf Dassler KG.... [tags: Business Case Study]
1746 words (5 pages)
- Introduction Starbuck’s strategy focused on three components; high-quality coffee, intimate service, and ambient atmosphere. Starbucks worked closely with growers in Africa, South and Central America, and Asia-Pacific regions to insure the quality of its product. Starbucks called all employees' "partners" and worked hard to train them with the skills necessary to best serve the customer. The atmosphere at Starbucks was crafted after the European-style espresso bar. The company goal was to create ambience through the Starbucks "experience" and by making the area comfortable, yet upscale.... [tags: Business Case Study]
1585 words (4.5 pages)
- Symptoms of Problems at Texaco Identification of Root Problems and Unresolved Issues Highly qualified African-American employees filed a class action suit against Texaco in 1994, stating that the company failed to promote African-American employees to a higher position and it failed to compensate them in relation to Caucasian employees in similar positions. Throughout the investigation of Texaco if was found that documents would potentially damage Texaco were being withheld. When secret tape recordings from Texaco executives revealed not only vilely insensitive racial attitudes but it also demonstrated the eagerness of the executives to withhold any and all sensitive internal documents per... [tags: Business Case Study]
995 words (2.8 pages)
- WAL-MART CASE STUDY WAL-MART CASE ANALYSIS Impressions Wal-Mart is a company that leads its industry in numerous areas. The areas which impress are the accomplishments the company has made. “About 140 million people in 11 countries shopped at Wal-Mart …every week. More than half of American shoppers visited Wal-Mart at least once a month…an estimated 82 percent at American households have made at least one purchase at Wal-Mart” (Bianco, Zellner, 2003). Less impressive is the company being involved in over 6000 active lawsuits and what seems to be a proven track record of forcing out smaller business in the areas it locates to, putting many people out of work.... [tags: Business Case Study]
865 words (2.5 pages)
- Introduction Since its' 1992 IPO, Starbucks has continually focused on growth. Initially, the growth was targeted to enable Starbucks to achieve their goal of becoming the leading North American retailer of specialty coffee. The early success they achieved resulted in Starbucks expanding their original goal to that of becoming the most recognized and respected coffee brand in the world. By way of example, this case study focuses on a request by McDonalds to serve Starbucks coffee at its' restaurants in order to discuss the marketing strategy and the underlying competitive premise that Starbucks has adopted to achieve both of their goals.... [tags: Business Case Study]
1449 words (4.1 pages)
- Systematic Lupus Erythematous
- The Destruction of the American Dream in John Cheever’s The Swimmer
- Comparing Nurses and Medical Assistants
- We Must All Take a Stand Against The Patriot Act!
- The Bottom of the Pyramid (BOP) Market Business Plan
- The Impact of Robinson Crusoe Essays on the Ecology of the Island
When there is an organization in market that sell’s some product, there will always be competitors or external challenges and SAP America too is not an exception for that. In 1995, competitive companies such as, Oracle, started providing worthy alternatives for R/3. Being an ace in the field of databases, Oracle deployed Enterprise Information System (EIS) on top of its databases and started marketing aggressively. Though SAP America has already won a lot of large accounts, they are in pressure to provide a quality and improved service to their existing customers for maintaining them in future. There was always a market perception about SAP states that most of its project were going for 18-24 months and this takes a longer time. Thus, this perception made SAP hard to penetrate the mid-tier companies.
2. What are the critical features of SAP's approach to partnering? What role has partnering played in the company’s success?
During summer 1993, the SAP America’s first strategy meeting was held on Bermuda and important ambitious sales target of $1 Billion was set. In order to achieve that the company proposed three strategies amongst them one is Partnering and their investments in the company. Each partner is given an R/3 and assigned partner manager. Ott worked on developing the partnering strategy and proposed four categories.
One important feature of SAP’s partnering strategy was, they never had any financial tie ups. They partnering tie ups were always mutually beneficial. In order to leverage client relationship and industry expertise, they need professional services to provide resource and service in sale and implementation of SAP products. This results in formation of Alliance partner who will provide those service. Though innovation is key to success, in order to be consistent in the market, a software should always be in sync with current and future technologies. So SAP decided to have tie up with Platform partners who provide such infrastructure services. Though hardware infrastructure acts as key functionality for performance, an environment that every end user can understand can be provided by software, thus resulting in Technology tie ups. There are different vendor who develop wide range of applications that runs on top R/3, therefore in order to maintain interoperability, the company decided to have Complementary partners.
SAP managed a healthy relationship with its partners. SAP shares their plans and goals every year with their partners. Partners were also living up SAP’s standards by maintain the customer satisfaction above threshold and committing a partner manager of their own to SAP. SAP, on regular interval collected feedback from the ultimate customers about the product and based on that they insisted the partnering companies to work further in improving. Say for example the Alliance partners should have a software implementation methodology that is compatible with R/3, else they will be warned. In fact two of such partner’s we removed. Because of technology and platform partnering, they could develop their products more efficient and flexible. Partnering with SUN made their R/3 efficient with SUN databases.
3. What is your evaluation of the new organization? What problems was it designed to solve?
SAP America has become “one company” as the scattered regions and ICOE’s were brought under the roof of Biddle, yet not completely turned into a vertical management structure. Thus the company had overcome the decentralized structure. Earlier, due to stretched project time the cost of R/3 look even higher than that of its original estimated cost. This issue can be overcome in the new organization as there were no decentralized structure and hence when there is a problem, one team can work on it and rest all be aware that someone else is working on it and there is no need for additional resources. Earlier all the manager’s gained superior power because of autonomous regions, however the new organization limit the powers of manager and hence prevent them from creating their own consultancies. The new organizational structure will always have someone to report and hence breaks the ultimate authority as well as limit the responsibility. Since the projects timing were shortened, the concentration toward mid-tier market is increased. Resource utilization is key constraint in the earlier system, however the new system will break the discrepancies among the resources. The Sales, Consulting and training were assigned as separated as individual Line of Businesses respectively. Therefore the new organizational structure allowed more resource for Sales and Services.
4. Assess the components of value of the SAP offering using the multiple dimensions of value idea in Chapter 4. What does this assessment tell you?
In Multi dimensions of value a Technology’s Standalone Value and Network Externality Value are strong influential factors. SAP has tie ups with most of the major hardware and software organizations through their platform and technology partnership. Therefore the software operates like any other software in the industry as a result of which customer convenience is achieved, which is key consider of a technology’s standalone value. SAP always value its customer feedback, as seen earlier the product and partnerships were molded based on the past customer feedback. Therefore SAP offers aesthetics and ease of use qualities to all the users who use it on different platforms. SAP is highly flexible for user. Based on the organizational requirements the software can be designed and based on the number of user, the charges will be accounted. SAP has collaboration with complementary partners and hence it offers lot of applications with runs on top of R/3. The key shortcoming of SAP is its longer duration of development and high maintenance cost.