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Why the Sales Slipped Backwards: Siebel Limited Case Study

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Updated: Jun 28th, 2022

Introduction

Siebel Limited has been a giant in designing, developing, marketing, and supporting customer relationship management software. Thomas M. Siebel found the Company in 1993 and the company was one named to be the fastest growing technology firm in the United States. By then, the company had sales of about forty five percent of the total sales in the industry.

Statement of Problem

In 2001, the company started slipping backwards especially in terms of sales. The growth of the company went down and the company’s rivals went past it. The company’s revenue tumbled by twenty two percent in one year when the corporate application software industry had only gone down by two percent. This is an indication that the company had greatly contributed to the downfall in the industry. The problem experienced by Siebel was caused by a weak economy and a software upgrade that the company had produced. The upgrade produced was very difficult to install and many customers were reluctant in buying it. The upgrade could cost the company a whole year to install which is a lot of time. The failure to satisfy its customers affected the publicity of the company to the users. SAP took over the ground that was previously enjoyed by Siebel. As Siebel was moving downwards, SAP was improving in revenue. Over sixty percent of the organizations that had bought the product were dissatisfied in that after two years of investing in the software, they had not recovered their investment. The products provided to the consumers by Siebel focus in customer relationship management applications which is only one area. The market has become competitive where consumers need software that consist integrated products. Specializing in one line when other suppliers are providing broad suites of integrated products made the company less competitive.

Criteria for Solution

Siebel has slipped backwards in terms of sales and revenue and the position has been taken up by its competitors. The future of the company depends on the solution that will be found to this problem (Gianakis, 2004, p.43). The company still has the capacity to make a timely decision that will put it back to its previous position. The company wants to gain its position of obtaining high revenues. The first cause of the down fall is the update that the company provided to its customers. This has reduced the loyalty of customers towards the company’s products. The research done showed that customers are dissatisfied with the update. Instead of denying the results, the company should conduct a research on its own to establish the truth in the matter. If the case is true, the company will then come up with a solution that will help solve the problem. The first solution will involve rebuilding the customer loyalty. The company should train its employees who will go out and install the update in the organizations (Mind Tools, 2006, para.7). The employees will also train employees in those organizations on how to use the software. This will make the software more efficient to the organizations. The company will also offer to visit the organizations frequently so as to see the progress in the software. Other companies such as SAP have undergone such problems before and have recovered to their current position. The company has also been able to overcome some overhauls before and this is not that a big issue.

Alternatively, the company can sacrifice some money and produce another update that will be easier to install and maintain. The company has professionals that are capable of producing the best updates around. The update will be provided to all organizations that had purchased the previous update and it never worked for them. The organizations will be required to pay money for the update after the update had met their expectations. The price that these organizations will be charged will be much lower than the prices that other companies offer for similar products. This way, customers will see the company’s concern to their success.

Instead of producing products that specialize in one line, the company needs to come up with a full suit of products that can solve many problems at a go. This will involve the integration of different functions of organizations in single software. SAP and Oracle developed HR, Commercial, and ERP packages that did not require specialists to deploy because they were already integrated (Alorie, 2002, para.5). This made a great contribution in eroding Siebel’s market. Other companies have had a competitive advantage over the company because of this characteristic. This will help the company meet the demands of different organizations. This will also increase its ability to compete with other companies that are already offering such products (Simon, 2000, p.122). Alternatively, the company can come up with a product that melds with other products with no patches to be added. This way, customers will prefer the product because it will be applicable even in future products. In addition, the product can also be meld to products from competitors including those that are integrated to solve different problems in organizations. In fact, the main target of the software will be to meld products from Microsoft, IBM, Oracle, SAP, BMC Software, and many other competitors. This will increase the competitive advantage of the company over these companies.

Recommendations

The company should develop another update that will be provided to customers to rebuild their loyalty in the company. The update will be developed within the next six months because it is only some changes that will be done to the existing one so as to reduce the complications in installation. Organizations will be made aware of the plan and they will therefore wait for the update other than go to the market to buy other updates. Software that will be able to meld products from the company and from other companies should be also developed. This will be developed instead of developing integrated software that cannot work with software from other companies. Customers will be willing to wait for the software that will be able to meet their present and future needs.

Insights from the Critical Thinking

This exercise presents some questions concerning the decisions made. Some of the facts presented may not be certain. This means that one may come up with a solution using this fact s and the solution will also be eventually uncertain. The factors that caused the problem are not completely interrelated. This means that a solution may only solve part of the problem and not the entire. Developing a new update for the organizations at a standardized price may be a risk and the money may not be recovered (Ranyard, Crozier, & Svenson, 2001, p.38). The company is not sure of how these organizations will react to the update.

Conclusion

Siebel has been a market leader in providing customer relationship management applications. The growth of the company however went down in 2001 as a result of competition from other companies especially SAP and Oracle. The company must come up with strategies to help it win back its position.

Reference

Alorie, G. (2002). Rivals Vie for Siebel’s Customer Spoils. Web.

Gianakis, G.A. (2004). Decision Making and Managerial Capacity in the Public Sector. New York: Marvel Dekker Inc, P.43.

Mind Tools, (2006). Introduction to Decision Making Techniques. Web.

Simon, H.A. (2000) Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations. 3rd Ed. New York: Free Press.

Ranyard, R., Crozier, R., & Svenson, O. (2001). Decision Making: Cognitive Models and Applications. London: Routledge Publishers, 37-39.

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