SALESFORCE.COM, INC.

The document aims to analyze business processes in Salesforce.com. It

furthers focuses on a subprocess, Salesforce Commerce Cloud

Group 9 | Section B 8/23/19 B2B Company Analysis Project

 SALESFORCE.COM, INC. | Group 9 | Section B

Table of Contents
1. About the Company ............................................................................................................................ 2
1.1 History of the Company ................................................................................................................ 2
1.2 Basic offerings by the company .................................................................................................... 2
1.3 Evolution of the company ............................................................................................................. 2
2. Business Processes .............................................................................................................................. 5
2.1 Business Process – Level I – Salesforce ......................................................................................... 5
2.2 Business Process – Level II – Salesforce ........................................................................................ 5
2.3 Products – Salesforce .................................................................................................................... 6
3. Salesforce Commerce Cloud: Solution for All ..................................................................................... 7
3.1 Market Offerings ........................................................................................................................... 7
3.2 Customer and Suppliers ................................................................................................................ 8
3.3 Key Market Processes ................................................................................................................... 8
3.4 Revenue Model ............................................................................................................................. 9
3.5 Customer Acquisition Strategy ................................................................................................... 11
3.6 Competitor Comparison.............................................................................................................. 11

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1. About the Company

1.1 History of the Company
Salesforce was incepted in 1999 by Marc Benioff, Parker Harris and Frank Dominguez in a
one-bedroom apartment as a SaaS (Software as a Service) company. The three founders have
left jobs that offered them hefty packages to start of the venture. Salesforce’s first product,
sales automation software was launched during September-November 1999.

1.2 Basic offerings by the company

Salesforce is originally an American based company that operates in cloud-based software
solutions. Salesforce has multiple offerings like product offerings, services, solutions, support
and events. The major chunk of the revenue for Salesforce is contributed by Customer
relationship Management (CRM) services. Salesforce also operates in the space of enterprise
solutions like customer service, engagement services, marketing automation, analytics,
ecommerce and integration platforms.

1.3 Evolution of the company

The various key events in the process of evolution of Salesforce is as follows:

 2000 – Anti-software campaigning by Salesforce, where salesforce has started

protesting against the software installed at sights and also through the “City Tours”,
where Salesforce has organized parties to campaign against the software. There was
always an existence for CRM market. However, sales force wanted to enter the market
with a differentiated product. Hence, they identified the gaps in the market offerings
and they have entered the market with a new differentiated product

Ansoff Matrix

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 2003 – Launch of new event named Dreamforce. This has replaced the “City Tours”,
that Salesforce was doing to attract new customers by sending invitations. They have
started using this platform for announcement of new products and ideas.
 2004-2006 – With its IPO announced in 2004, Salesforce has been the mention of the
year with a stock appreciation of 55%. Their product was simple and more streamlined
to use, other than the competitor (Oracle, SAP) offerings during that period, which have
attracted the sales persons in different companies demanding their companies for Sales
Force.
o Also, the Sales Force had a strategy to offer the service for free of cost for the
first five accounts in a company, which encouraged the experienced users
recommend to the employees about the feature benefits and ease of usage which
has created the requirement for the product among various accounts in the
company. It is primarily through word of mouth marketing that they have
ensured to capture the market share in their initial days.
o Also, the product benefit of a non-necessity to install the program on the work
sight has promoted the increased usage of the product among the users. They
had to use the software on the web. The company have crossed a mark of 100%
compounded annual growth for the initial years.
o From 2002 to 2006, Salesforce has achieved sales efficiencies more than 100%,
which translates $1 spending on marketing efforts into $2 of revenue.
o During 2005 for the first time, the company has moved from a pipeline business
model to a platform-based business model. They have ensured this by keeping
the platform open for third-party developers to develop their own apps and then
sell the products to the other users of Salesforce. By doing this, they have
ensured an integrative value creation. They have opened the source code to the
developers, who in turn have developed applications, which were bought by the
consumers of Salesforce, which have created additional value for the
consumers. With increased product functionality, customers perceived value
towards Salesforce have increased with the increase in the number of relevant
and useful applications. This have led to the increase of the sales of Salesforce
CRM. This is a classic example of higher value appropriation in platform-based
models than the pipeline-based models. This has led to value and data exchange
and feedback process in the chain.

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Platform Ecosystem

 2008 – Salesforce has launched an official platform for developers, Force.com, which
has promoted the third parties to deploy apps on Salesforce architecture directly. This
also has ensured additional revenues, as the third-party logins have increased to use the
platform. This have transformed them in to PaaS company from a SaaS company.
 2011-2015 – Salesforce has acquired multiple companies during this period to improve
its product portfolio in categories like analytics, social media-based products etc.
 2015 to present – With 15 years of presence in the industry, Salesforce has evolved
from acquiring companies and developing new technologies for expanding its portfolio
to adopting the newer technologies in the industries and take a head on collision with
the start-ups and other competitor companies like Oracle and SAP. With a higher
bleeding power, Salesforce is able to offer solutions at lower prices to the customers to
face on the competitors.
 Present – Salesforce revenues for year 2019 are $13.28 billion.

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2. Business Processes
2.1 Business Process – Level I – Salesforce

2.2 Business Process – Level II – Salesforce

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2.3 Products – Salesforce

Salesforce offers multiple products to different B2B industries and companies. The products
that salesforce primarily offers is Customer Relationship Management (CRM) products. These
products are primarily responsible for managing a company’s clients/customers, relationships
and interactions with the current and potential customers. These products are aimed at the
improvement of revenue and profit of a company. Following are a few of the different products
offered by the salesforce to different categories of customers:

Sales CRM: This product offers the salesforce of a company to close the sales deals at higher
speeds by offering features like providing consolidated customer information at a single
location including leads, facilitating informed decisions by providing up-to-date data and by
providing the power of automation and artificial intelligence to the customer.

Service CRM: This product ensures early closure requests of service requests by anticipating
the needs of the customer and hence providing a more intelligent self-service option. This
product also offers personalized services to the customer’s customer there by ensuring quicker
services with suitable and relevant predictions.

Marketing CRM: This product helps in building personalized customer interaction flows the
marketing efforts towards the customers. It helps in personalizing email marketing at scale,
engaging with mobile messaging and in guiding through social media marketing.

Commerce CRM: This product primarily offers the value proposition of conversion of a greater
number of customers to grow the brand faster and fostering value, which is caused by unifying
the buying experience, conquering personalization and then reaching the goals

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3. Salesforce Commerce Cloud (SFCC): Solution for All

Commerce cloud which started as Demandware is cloud based commerce solution and content
management system for e-commerce, online stores, offline stores and mobile first POS.
Commerce cloud has integrated system along various channels like mobile, social, web and
store to provide management capabilities across diverse set of industries and diverse set of
domains like marketing, merchandising, content, promotion, customer service, fulfilment and
artificial intelligence. This makes SFCC an important asset for companies worldwide with
more than 100,000 companies using the platform.

3.1 Market Offerings

Primarily, the market offerings in terms of services can be divided into:

1. Integration across channels: It plugs in all the channels of contact to customer together
and integrate information to process and analyse. This includes social integrations, in-store
extensions, multisite management, guided navigations
2. Inventory Management: Product management, quick order and reorder templet, order on
behalf from sales and service, split shipment across multiple locations, merchandising tool
is included in inventory management system. Additionally, budgeting and buying authority
management is also included. It also does contract and multi account ordering.
3. Market Analysis: Customer segmentation via search engine optimisation, purchase
analysis, site search and cart and checkout analysis. It further does segment catalogue
assignment and assessment on the basis of customer segments. It also performs native
targeting and A/B testing.
4. Content Management: Localised content management, overall content management,
catalogue management, campaigns management, responsiveness across all channels like
mobile, web etc, site search management comes under content management aspect.
5. Pricing and Payment Integration: Pricing management, integration of payment methods
including POS, segment and customer specific pricing and one-touch payment options are
included in this.
6. Customised Targeting: All the content, product, promotion and themes are localised and
targeted to individual customer. The customization is AI enabled.
7. Integrated Visual Dashboard: It offers platform development, full featured personalised
application and real time dashboard and report.

It offers a complete solution of managing and handling day-to-day running of an e-commerce

business
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3.2 Customer and Suppliers

Salesforce commerce cloud has a customer list of more than 100,000 companies and is growing
further. It offers solutions for both B2C businesses and B2B businesses. The offerings for both
as below:
1. B2C Commerce: For B2C companies and consumer brands, SFCC provides e-commerce
websites to enhance their overall efficiency and effectiveness by providing:
a. Seamless integration and transactions among various platforms of company which
enhances customer shopping experience. This in turn benefits the e-commerce company by
increased traffic on the site and increased sales because of integrated channels.
b. Marketing and Merchandising control is made simpler and given to the e-commerce
company, allowing them to launch campaigns and promotions, personalise merchandising,
content and catalogue easily without an IT support.
c. Artificial Intelligence is provided by their “Einstein Product”. This allows companies to
personalise data and drive search and revenues with customer insights.
d. Innovation: They provide comprehensive developer tools which allows the companies to
use SFCC as a platform to implement their own technical/IT expertise and enhance their
offerings.
e. Scalability: It helps companies to manage multiple locations easily and execute global
strategies. It customises the offerings in regional languages like English, French, Italian,
Chinese or Japanese.
B2C customer base comprises of almost all the big companies spread across domains like
Adidas, Puma, Bossini, Mothercare, NYX, Scotch&Soda, Skull Candy and countless others.
2. B2B Commerce: For B2B companies, it provides tailored solutions by providing:
a. Simplistic, self-serving design which reduces complexities involved in B2B and empowers
sales team and channel partners.
b. Seamless, connected and relevant interactions lead to greater customer engagement.
c. Provide scalability by helping to execute global strategies and optimize costs and resources.
Additionally, it provides regular updates to B2B companies.
d. Industry specific designs of solutions helps to make B2B2C experience smoother for
companies.
B2B customer base comprises of companies like Alpine Group, Lockebuilt Industries Solutions
etc.

3.3 Key Market Processes

Key Market Processes include below processes guided by Analytics, AI using RESTful API1:
1. Marketing
a. Customer Segmentation
b. SEO
c. Campaign & Content Management
d. Targeted promotions and pricing

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Representational State Transfer Application program Interface. Set of standardized design principle which
makes network communication more scalable and flexible.

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2. Order Fulfilment
a. Order/Reorder templets
b. Order on behalf
c. Split Shipments
d. Cart and checkout application
3. Sales
a. Budget & buying analysis
b. Personalised themes
c. Payment standardisation and one-touch payments
4. Customer Service
a. Real-time dashboards and reports
b. Social and in-store extensions
5. Developing Community
a. Developer options
b. Community clouds Order
Fulfilment

Platform
Development
Developing Marketing
Communities Testing Integration
abilities
Analytic, AI,
RESTfulAPI
Localization
Guided
Controls

Customer Sales
Service Continued
Learning

360̊ degree engaement

3.4 Revenue Model

The revenue model of SFCC is very different from other service providers. It is synergistic
model based on “Gross Merchandising Value (GMV)” rather than usual tiered licensing.
Gross Merchandising Value: GMV is total value of a retailer’s merchandise sold over a
targeted period of time. It is used for measuring health and growth of the business as revenue
is dependent upon gross merchandise sold along with other fees.
GMV is considered before any additional fees received or expenses incurred by the business.

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So, instead of regular tiered licensing based flat-rate plans which allow smaller companies to
choose affordable plans, SFCC charges entirely on the basis of GMV.
Businesses are required to request for “get a quote” for the price. This is calculated on the
basis of gross merchandise value for B2C and similar matrix of Order Volume for B2B

So, irrespective of fixed subscription or licensing and size of the business, SFCC’s customers
are required to pay as per set GMV. This is usually, 2-3% of annual GMV extending
maximum up to 5%
The revenue model of SCFF is funded by revenue sharing, hence from OPEX rather than
CAPEX as there is no upfront licensing cost.
Revenue share model is most attractive to companies with strong product profit margins. Since
this is percentage of sales, so as sales increases, value given to SFCC increases and vice-versa.
Profit of companies remain intact.
This model is not appealing to companies with higher sales and lower margins, as the
percentage of sales given to SFCC increases with increase in sales and hence the revenue share
model becomes less profitable for them, than usual tier-based licensing.
Pricing contracts are there in place by SFCC for contract periods usually ranging from 3-5
years. Early termination fees or Severance is there if the customer breaches the contract and
moves to another service.
Within this pricing, regular dynamic and support updates and expansive cloud server space is
also included along with other features.

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3.5 Customer Acquisition Strategy

3.6 Competitor Comparison

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