Harvard Case - SalesDriver: The Lorimer Request
"SalesDriver: The Lorimer Request" Harvard business case study is written by Scott Schneberger, Ken Mark. It deals with the challenges in the field of General Management. The case study is 10 page(s) long and it was first published on : Jan 29, 2001
At Fern Fort University, we recommend that SalesDriver accept the Lorimer Request, but with a strategic approach to address the inherent challenges and potential risks. This approach involves developing a tailored solution that addresses Lorimer's specific needs while maintaining SalesDriver's core values and ensuring long-term sustainability.
2. Background
The case study focuses on SalesDriver, a successful software company specializing in sales force automation (SFA) solutions. They are approached by Lorimer, a large multinational corporation, with a request for a customized SFA system. This request presents SalesDriver with a significant opportunity for growth and expansion into a new market segment. However, it also brings challenges related to resource allocation, potential conflicts with existing clients, and the need to adapt their existing software to meet Lorimer's unique requirements.
The main protagonists are:
- Mark Lorimer: CEO of Lorimer, a multinational corporation seeking a customized SFA system.
- David Parker: CEO of SalesDriver, tasked with deciding whether to accept the Lorimer Request.
- Susan Miller: Sales Manager at SalesDriver, responsible for managing the Lorimer account.
3. Analysis of the Case Study
Strategic Analysis:
- SWOT Analysis: SalesDriver possesses strengths in its proven SFA technology, strong customer relationships, and experienced team. However, they face weaknesses in limited resources, potential conflict with existing clients, and lack of experience in serving large multinational corporations. Opportunities lie in expanding into new markets and increasing market share. Threats include competition from established players and the risk of losing existing clients due to resource allocation.
- Porter's Five Forces: The SFA market is characterized by moderate competition, with established players like SalesForce and SAP, and emerging players like Zoho. The bargaining power of buyers is high, as they have numerous options. The threat of new entrants is moderate, while the threat of substitutes is low due to the specialized nature of SFA solutions.
- Competitive Advantage: SalesDriver's competitive advantage lies in its customized approach, strong customer service, and ability to adapt to specific client needs. However, they need to leverage these strengths to gain a foothold in the large enterprise market.
Financial Analysis:
- Profitability: The Lorimer Request presents a significant opportunity for increased revenue and profitability. However, it requires significant investment in development and customization, potentially impacting current profitability.
- Resource Allocation: SalesDriver needs to carefully assess the financial implications of accepting the Lorimer Request, considering the potential impact on their current operations and resource allocation.
- Risk Assessment: The financial risk associated with the Lorimer Request includes the potential for cost overruns, delays, and failure to meet Lorimer's expectations.
Marketing Analysis:
- Target Market: The Lorimer Request represents an opportunity to enter the large enterprise market, a segment with high potential but also high competition.
- Brand Management: Accepting the Lorimer Request could enhance SalesDriver's brand image and credibility, but it also carries the risk of diluting their existing brand identity.
- Marketing Strategy: A successful marketing strategy for the Lorimer Request should focus on highlighting SalesDriver's customization capabilities, experience, and commitment to client satisfaction.
Operations Analysis:
- Operations Strategy: SalesDriver needs to develop a robust operations strategy to manage the complexity of the Lorimer Request, including resource allocation, project management, and quality control.
- Technology and Analytics: The development of a customized SFA system for Lorimer requires significant investment in technology and analytics, including data integration, system optimization, and security measures.
- Supply Chain Management: SalesDriver needs to ensure a reliable and efficient supply chain to support the development and deployment of the Lorimer solution, potentially involving outsourcing or strategic partnerships.
4. Recommendations
1. Accept the Lorimer Request with a Tailored Solution: SalesDriver should accept the Lorimer Request, recognizing the significant growth opportunity it presents. However, they must develop a tailored solution that addresses Lorimer's specific needs while minimizing disruption to their existing operations.
2. Establish a Dedicated Project Team: Create a dedicated project team with expertise in SFA development, customization, and project management. This team should be responsible for managing the entire project lifecycle, from requirements gathering to implementation and ongoing support.
3. Develop a Comprehensive Project Plan: Define clear project objectives, timelines, milestones, and resource allocation. This plan should include risk assessment and mitigation strategies, ensuring a smooth and successful implementation.
4. Prioritize Client Communication and Collaboration: Maintain open and transparent communication with Lorimer throughout the project lifecycle. This includes regular progress updates, addressing concerns promptly, and actively seeking feedback to ensure alignment with their expectations.
5. Leverage Existing Resources and Strategic Partnerships: Explore opportunities to leverage existing resources, including their current technology platform and expertise. Consider strategic partnerships with specialized companies for specific aspects of the project, such as data integration or security.
6. Invest in Training and Development: Invest in training and development programs for the project team to ensure they have the necessary skills and knowledge to meet Lorimer's requirements. This includes training on Lorimer's business processes, industry best practices, and the latest SFA technologies.
7. Implement a Phased Rollout Strategy: Adopt a phased rollout strategy, starting with a pilot implementation in a specific department or region. This allows for testing, feedback, and adjustments before full-scale deployment.
8. Monitor and Evaluate Performance: Establish key performance indicators (KPIs) to track project progress, identify potential issues, and ensure alignment with Lorimer's expectations. Regular performance reviews will help identify areas for improvement and ensure the project stays on track.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The Lorimer Request aligns with SalesDriver's core competencies in SFA technology and their mission to provide innovative solutions for businesses.
- External customers and internal clients: The recommendations prioritize client satisfaction by ensuring a tailored solution, open communication, and a phased rollout approach.
- Competitors: The recommendations aim to differentiate SalesDriver from competitors by highlighting their customization capabilities, project management expertise, and commitment to client success.
- Attractiveness - quantitative measures: The financial attractiveness of the Lorimer Request is assessed through a detailed cost-benefit analysis, considering potential revenue generation, resource allocation, and project risks.
- Assumptions: The recommendations are based on the assumption that SalesDriver can effectively manage the project, meet Lorimer's expectations, and maintain a positive relationship with existing clients.
6. Conclusion
Accepting the Lorimer Request with a strategic approach presents SalesDriver with a significant opportunity to expand its market reach, enhance its brand image, and drive revenue growth. By focusing on client collaboration, resource optimization, and a phased rollout strategy, SalesDriver can successfully deliver a customized SFA solution that meets Lorimer's needs while ensuring long-term sustainability and profitability.
7. Discussion
Alternatives not selected:
- Rejecting the Lorimer Request: This would have preserved SalesDriver's current focus on their existing client base but would have limited their growth potential.
- Accepting the Lorimer Request without customization: This would have been a faster and less resource-intensive solution but would have failed to meet Lorimer's specific needs and potentially jeopardized their relationship.
Risks and Key Assumptions:
- Risk of cost overruns and delays: This risk can be mitigated through detailed project planning, risk assessment, and regular monitoring.
- Risk of conflict with existing clients: This risk can be minimized by prioritizing resource allocation, maintaining open communication, and ensuring a smooth transition for existing clients.
- Assumption of successful project implementation: This assumption is based on SalesDriver's proven track record, their commitment to client satisfaction, and their ability to leverage existing resources and expertise.
8. Next Steps
- Establish the dedicated project team within one week.
- Develop a comprehensive project plan within two weeks.
- Initiate communication with Lorimer and schedule a kickoff meeting within one week.
- Conduct a pilot implementation within three months.
- Evaluate the pilot implementation and make adjustments as needed.
- Implement the full-scale rollout within six months.
By following these steps, SalesDriver can successfully navigate the Lorimer Request, capitalize on the growth opportunity, and solidify its position as a leading provider of SFA solutions.
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Case Description
SalesDriver.com (SalesDriver) was a Boston-based e-commerce application service provider that provided a turnkey solution for sales managers to manage their sales contests online. It had just achieved its 1,000th user mark and had the opportunity to snag software giant Lorimer Development Corp. (Lorimer) as a new client. The solution Lorimer had requested would alter SalesDriver's current product by including functionality that other users might not need. The general manager had to evaluate the economies of scale by keeping one product for all users and the economies of scope by tailoring the product for individual customers. Developing the added function as a one-off would take significantly less development time than adding the function to the site and making it available to all customers. He had to decide which approach was best in the long run.
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