Centra Software

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Centra Software

Catalogue
Ⅰ Ⅱ Ⅲ BACKGROUND ANALYSIS ALTERNATIVE PLANS



COMMENTS



PLAN IMPLEMENTATION

Ⅰ Background
Centra is a pioneer in software eLearning in the fast-growth market. However it faces the threat from WebEx, who sells exclusively over the phone. Now, It is debating how to modify its go-to-market strategy and how to add telesales to improve sales force productivity. Should Centra concentrate on the enterprise customer and exclude small and mid-size corporations ? OR

Should Centra ‘fish where the fish are biting’ ?

Ⅱ ANALYSIS
The market for Corporate eLearning and eMeeting
the market for eLearning and eMeeting 11 12 10 8 6 4 2 0

1.1

1999年

2004年

The number of Delivery Platforms Vendors
the number of Delivery platforms vendors

The one that wins the broadest installed customer base in the least time,

20 20 15 10 5 0 3

survive!

ANALYSIS (Continued)
Competitors
The competition among 20 vendors is very fierce. Comparison between three typical companies is as follows. revenue($'000) sales spending 25000 51000 revenue per customer($'000)

technology

sales process

customers

simple

telesales

3300

7.58

WebEx
field sales, telesales and enterprise sales

sophisticated

23000 4673

440

52.27

Centra
enterprise sales; single-source vendors

sophisticated

2200

20

110.00

Lotus

Not available

ANALYSIS (Continued)
technology

Positioning

sophisticated

simple

revenue per customer

ANALYSIS (Continued)
Straightforward strategy Market leader in sophisticated end Products from simple to sophisticated R&D capability Rapid growth markets Merger waves

The friction between telesales and field sales Bad financial situation Penetration rather than dissemination Limited experience in enterprise deal Success of new competitor, WebEx Compared with LMS vendors, lack the support from SIs.

Ⅲ Alternative Plans
A
Target customers: All types of customers Part of telesales integrated with field sales being responsible for Global 2000;other telesales responsible for non-Global 2000 customers.

B
Target customers: Global 2000 Telesales responsible for EMeeting and Conference; Field sales responsible for Symposium.

C
Target customers: Global 2000 Telesales commence Initial contact and try to sell big-ticket products. They would deliver the transaction to field sales when necessary.

Ⅳ Comment on Plan A
Advantages: • Economical efficiency; • Clear classification of responsibilities; • Expansion of telesales to Global 2000 brings better penetration and dissemination. million $ 30 25 20 15 10 5 0 1996

Disadvantages: • Decentralization of target market; • Reduced chance to become a leader in a particular market segment.

"Shot gun" Sales force are used like
Sales SG&A expense

1998

2000

a shot gun to cover over a large spectrum of customers. Sales may be satisfactory but leadership of any market segment may be lost thereof.

Reducing this cost item is vital for financial improvement of the company. For every million dollar of sales, telesales saves $100,000 compared with field sales. So telesales is a possible solution to this problem.

Comment on Plan B
Advantages: • Concentration on one single market segment; • Economic efficiency; • Clear classification of responsibilities. Disadvantages: • Potential conflicts of interest between telesales and field sales personnel; • Possible loss of business opportunities.

"Automatic pistol"
2%

Revenue from products
17% 66% 15%

Symposium Conference EMeeting Other services

Although faced with some loss of small and mid-sized midcustomers, all the sales force can cooperate to help the company achieve the leadership in the mainstream market segment.

Telesales people may try to sell EMeeting to customers instead of more profitable Symposium or Conference in the best interest of themselves. It is also a hidden trouble of...
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