SaleSoft Inc is faced with making a tough, time constrained and strategic choice to either continue with it’s PROCEED software development or redirect the efforts of the entire company’s workforce to deliver the Trojan Horse (TH) product in time for the sales automation conference. The decision taken will have to be absolutely exclusive and is expected to have a critical impact on the company’s future and indeed it’s very viability. I would recommend the company to
1. Fully redirect all of its efforts to get Trojan Horse (TH) product to market quickly so that they can showcase it at the SA conference. This would be necessitated by the financial situation of Salesoft Inc as analyzed in this document. They can concentrate on getting the PROCEED product out after demonstrating TJ.
2. Adopt a customer oriented value-based pricing for Salesoft and price it at a higher entry point of $1000 for the computer hardware market.
3. Clearly choose the computer hardware industry as their target market segments and spend minimal time and effort in getting involved with selling to financial sector industries.
4. Realign their internal sales organization to cater to the needs of the TH customer base more effectively and strongly consider the possibility of offshoring some of the software development to lower cost locales like India and China to reduce the cash burn-rate.
It is evident from the case that Salesoft Inc has very limited funds for operation and has to show positive developments to venture capitalists before they can raise further funds. |
The main objective of SaleSoft (SS) is of becoming a leader in the high end of the Sales Automation (SA) software industry for which they introduced PROCEED which had very little competition and high demand. Now, SS needs to decide whether or not to introduce a Trojan Horse (TH) product which could potentially distract SS from its primary objective.
There is a risk that if SS launches TH then the sales of PROCEED might get affected.
PROCEED had received good response but to convert interest to actual sales was taking time and also with limited funds it had to show performance.
SA has a market for around $1 billion and expected growth was 40 % annually for next five years.The time to sell and install a typical SA project took anywhere from 22 to 30 months.
The major concerns for the company were that:
• Company didn’t have enough resources to have separate forces for the two products (TH and PROCEED).
• If company sells both the products, then customers might end up buying TH rather than PROCEED which is great loss to company as the company has invested a huge amount to get PROCEED in market.
SaleSoft needs decide to whether to go ahead with PROCEED or not.
• Can either go for PROCEED
• Or can go for Trojan Horse
• Or can go for both.
• TH was more than CMS but less than CSAS.
• TH mainly targets those customers who didn’t want to go for complete automation for all the processes.
We recommend introducing the Trojan Horse solution instead of continuing with PROCEED’s development due to multiple reasons that we will illustrate. To start off the financial situation is in crisis when it comes to PROCEED as it requires 1 million dollars and it will take a total of 8 month with 5modules still remaining to be fully operational and that is not feasible as the sales automation conference is taking place in 3month where the product will not be ready. As the CSAS illustrates that it was difficult for vendors to satisfy the customers as many of its functions are not required by the customer and so will not come into play.
On the other hand inquiring TH is more beneficial financially as it only requires $200,000 to develop and will need nearly half a million to market within the next few month which entitles its...