Esteban Tapia, Olimpiu Capra and Javier Valera Marketing Management

SAP AG is an international public owned software developer and consultancy corporation offering solutions to businesses

SAP is the world's largest business software company and the third-largest independent software provider in terms of revenues

1. Terminology2. History of the company3. Mission statement4. Products and strategy5. Competitor map industry6. The market7. Main competitor8. According to SAP…9. Competitive positions10. Conclusion

B2B: Business to business solutions ERP: Enterprise Resource Planning CRM: Customer Relationship Management SaaS: Software as a service (on Demand) Installed Base: Current Customers Tiers: Layers of complexity

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  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 Business Suite (with ERP 6.0)

“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”

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. CRM: helps companies acquire and retain

customers, gain marketing and customer insight PLM: helps manufacturers with product-related

information SCM:  helps companies with the process of

resourcing its manufacturing and service processes

SRM: enables companies to procure from suppliers

Netweaver Platform Development platform (SDK) Market development through strategic partnerships

SAP Business All-in-One Business solutions focused on SMEs (PYMES) Interesting for SAP due to big growth opportunities

Business byDesign Saas for SME’s

Business Objects BI and reporting

Very long product life-cycle High investment Perceived as ‘game changing’ Constant improvement releases

(maintenance) Highly customizable Industry focused

Fortune 500

2nd Tier

3rd Tier

Medium (<2500 employees)

Small

OOSAPSAP

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%)

2nd Tier

2nd Tier

SaaS

SaaS

BI

Business Objects

SASOracle

+ Hyperion

MS

Business solutions market has experienced a remarkable change in the last years due to increasing competition among leading firms development of new products

2 main products: ERP and CRM. Analyzing segmented market share: For ERP:

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

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 has the highest percentage of customer satisfaction 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

Similar market share, high rivalry

Oracle Second player in ERP market Main CRM software provider Its strategy is based on product innovation and

increasing market size through acquisition of smaller firms (Relsys, Sophoi, Sun Microsystems, HyperRoll, GoldenGate, Salesforce…)

Due to their aggressive strategy they put themselves in all the markets SAP is working in

For SAP, positioning is based on these points: Differentiation (Porter) 

Offering the possibility of total customization of the product Long product lifecycle and even longer customer life (around 20 years)

Focus (Porter)  SAP is concerned about serving major multinational corporations  SME’s are just a strategic placement, not their main revenue source They also focus in certain industries that require high technology

software, like aerospace, automotive, chemicals, engineering and construction, or industrial machinery

Customer intimacy (Treacey & Wiersema) Customers help to develop the solutions, providing their feedback to the company

about what things can be modified or improved

Co-innovation (through their ecosystem)

Organic Growth (Customer base) Smart Acquisitions (buying

competitors, technology uses)

New Demand New users

The Netweaver ecosystem

Improve productivity Improve added value

Through constant improvement of their solutions

Win market share Win competitors

Acquisition of Business Objects

Defend position Mobile defense

SaaS (Business byDesign) Flanking defense

Facing Tier 2 vendors with Business All-in-One Adding market necessities to their offer

SAP has become slow and sluggish Oracle is a big threat High cost products (price*time) The ‘cloud’ is reducing the size of the

market Short run safety, long run bleak SaaS as a lifeboat