11 Nov 2009

BUSINESS MARKETING

SUBMITTED TO:

PROF. V. SEKHAR

SUBMITTED BY: GROUP 8

ABHISHEK.BANSAL

RAGHAVENDRA MISKIN

KRITIKA PRABHAKAR

SURAJIT GOGOI

NIRAJ R

VAIBHAV MISRA
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ORACLE
Oracle Corporation (Nasdaq: ORCL) is the world's leading supplier of software for
information management, and the world's second largest independent software company.
With annual revenues of more than US$23.25 billion, the company offers its database, tools
and application products, along with related consulting, education, and support services, in
more than 145 countries around the world. The company was founded in the year 1977 at
California, USA. The company was initially founded by Lawrence J. Ellison and his few
associates. When CEO Lawrence J. Ellison and a few associates formed Oracle in 1977, they
were out to prove wrong the prevailing theory that relationship databases could not be
commercially viable. Larry Ellison, Bob Miner and Ed Oates found Software Development
Laboratories. Inspired by a research paper written in 1970 by an IBM researcher titled "A
Relational Model of Data for Large Shared Data Banks", the three decide to build a new type of
database called a relational database system. Their original project is for the government and is
titled Oracle. The founders believe that Oracle, meaning source of wisdom, would be an
appropriate name for their project and receive permission from the CIA to use it.
Headquartered in Redwood Shores, California, Oracle is the first software company to develop
and deploy 100 percent internet-enabled enterprise software across its entire product line:
database, server, enterprise business applications, and application development and decision
support tools.

Oracle is the only company capable of implementing complete global e-business

solutions that extend from front office customer relationship management to back office
operational applications to platform infrastructure. Oracle software runs on PCs, workstations,
minicomputers, mainframes and massively parallel computers, as well as on personal digital
assistants and set-top devices. As more and more companies transform themselves into e-
businesses, Oracle's Internet-enabled solutions provide a cost-effective way to expand market
opportunities, improve business process efficiencies, and attract and retain customers. By
replacing expensive, unwieldy client/server computing models with the efficiency and reach of
the internet, companies can deploy a wealth of innovative applications that can be accessed
with a Web browser.

The only software company to offer a full suite of e-business products, Oracle provides:

• An Internet-ready platform for building and deploying Web-based applications.

• A comprehensive suite of Internet-enabled business applications.

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• Professional services for help in formulating e-business strategy, as well as in designing,

customizing, and implementing e-business solutions.

The company has over 74,802 employees and 300,000 Database customers worldwide.
The key people of the company are Larry Ellison, Co-founder and CEO, Jeffrey O. Henley,
Chairman, Safra A. Catz, President, Charles Phillips, President. Oracle has become a highly
recommended supplier catering the needs of the 24 of the World’s top 25 financial institutions.
Oracle also operates the world’s three largest genome database. Not only among the private
clients, has Oracle provided their services to almost 2000 government organizations around the
globe. The 22 agencies that comprise the Department of Homeland Security are also dependent
on the software provided by Oracle. Oracle also supports around 500 communication
companies providing and developing their infrastructure with software’s that meets their daily
requirements. Oracle’s e-Business Suite is adopted by 3 of the top 5 most profitable Fortune
100 communication companies. Oracle provides support to the major 500 global airlines
companies. Global retailers like Wal-Mart uses Oracle aided software’s to keep track of their
inventory level. Oracle also provides assistance to 20 of the top 500 Global oil and gas
companies including ESSAR and British Petroleum. Over 3600 educational institutions
worldwide run on Oracle.

Oracle’s Corporate Strategy hasn’t changed over the years. Oracle has maintained its
focus on developing top-of-the-line software for all types of business-oriented applications. The
primary industry that the company produces software for is database and file management
functions of business. Other types of business applications that the software is used for are for
supporting business operations, assisting in collaboration and application development, data
warehousing, customer relationship management, and supply chain management. For such
reasons Oracle has been referred to as a Standard Based Company. They offer various types
products down the line including Database Products, Middleware Products, Application
Products and Scale Products. Database Products are based on Open Standards. These products
are Fast, Secure, Reliable and Lowest cost. These products run on Grids which is unique to
Oracle. Middleware Products are also based on Open Standards. These products are
completely integrated and provide the lowest costs of operations. Like Middleware products,
these products also run on Grids. Application Products are built on Standard Based Middleware
and Database. These products are also completely integrated and extensible. These products
can be customised according to the choice of the customers thus providing a scope of unlimited
application and fusion. These products provide the industry’s Best of Breed Functionality. Scale
Products are completed and integrated stack which performs between Database and
applications.
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These products can move beyond ERP and into Mission-Critical Operation Processes. These
products have become the number one in all Businesses including utilities. The various products
offered by Oracle focuses on the following Prime areas: -
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Products Specializations

 Application Server Business Intelligence,

J2EE/Web Services, Mobile
and Portal Security.

 Collaboration Suite Compliance, Email Calender,

Files and Ultrasearch,
Voicemail and Fax, Web
Conferencing and Wireless
and Voice.

 Database Business Intelligence, RAC

and Security.

 E-Business Suite CRM, Financials, Human

Resource, Projects, Supply
Chain Management and
Technology.

ORACLE FINANCIAL SERVICES SOFTWARE LTD.

Oracle Financial Services Software Limited (formerly called i-flex Solutions Limited is an IT
solution provider to the Banking industry. Oracle Financial Services is majority owned by Oracle
Corporation. It claims to have more than 880 customers in over 135 countries on its financial services. Its
range of applications software, custom solutions and consulting services enable financial institutions to
cut costs, respond rapidly to market needs, enhance customer service levels and mitigate risk as per
oracle analytics financial services solutions.
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SWOT analysis
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Competitive advantage of Oracle over its competitors

Oracle has several distinctive competencies that have allowed it to gain competitive
advantage over its rivals. That the company has achieved competitive advantage over its rivals
is evidenced by the fact that its net profit margin and return on assets lead its competitors.

Profitability Oracle IBM Microsoft SAP Industry2 Market3

Gross Profit Margin 77.78% 42.52% 85.88% 70.11% 82.15% 48.37%

Pre-Tax Profit Margin 40.21% 12.49% 38.79% 24.30% 26.41% 9.62%

Net Profit Margin 27.94% 8.75% 25.98% 17.45% 17.64% 6.20%

Return on Equity 34.3% 28.3% 21.2% 34.6% 12.2% 11.7%

Return on Assets 22.4% 7.7% 15.4% 20.8% 8.7% 2.0%

Source: Oracle’s Annual Report 2008

Three areas the firm particularly excels in are research and development, production
and information systems, and marketing and sales.

 Research and Development: Research and development have always been a key focus
at Oracle. Spending on R&D has always been high. In 2003 spending represented 12%
of total revenues, and in 2004 the amount increased to 13%.
 Production and Information Systems: As a premier maker of business software, Oracle
has put its expertise to use in its own company saving more than $1 billion in operating
costs by coordinating and streamlining all its business processes. Its three tier
approach, “simplify, standardize, and automate”, form the core of its money saving
strategy.
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In the creation of the service it provides to its customers, Oracle constantly

strides to create competitive advantage by providing its customers with a higher return
on investment. It does this by lowering the total cost of its software by improving
integration, decreasing installation times, lowering administration costs, and improving
the ease of use.
 Marketing and Sales: Following the late 2004 merger with PeopleSoft, the sales force at
Oracle increased 65%. This allows the firm to engage its customers face to face and to
learn and understand a customer’s organization, processes, and specific requirements.
In addition, Oracle has 11,000 consultants worldwide with the knowledge of how to
implement Oracle technology and Oracle applications. Further, in addition to Oracle’s
own sales and service forces are indirect sales channels such as resellers, system
integrators/implementers, education providers, internet service providers, network
integrators, and independent software vendors. Oracle has made a commitment to
focusing on the customer in its marketing and sales efforts.
In addition to the above mentioned advantages of Oracle over its competitors, the
company has adopted several different strategies which give them an extra edge over its
competitors. These are: -

Corporate-Level Strategy:

The corporate level strategy of the Oracle Corporation has remained relatively the same
since it was first started. Oracle has maintained its focus on developing top-of-the-line software
for all types of business-oriented applications. The primary industry that the company produces
software for is database and file management functions of business. Other types of business
applications that the software is used for are for supporting business operations, assisting in
collaboration and application development, data warehousing, customer relationship
management, and supply chain management

With all of the resources at the company’s disposal, one might think that Oracle would
branch out into other industries. However, the software giant has remained solely in the
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software industry, continuing its long battle with Microsoft for the top position. Microsoft has,
in the recent past, branched out into other industries such as the video game industry with the
release of the highly popular X-BOX. Oracle did not follow its main competitor on this move, but
this isn’t to say it hasn’t expanded its product line to enter new markets of the software
industry. One example of this new market entry by Oracle was its release of the Business
Intelligence 10g application, moving the company into the enterprise content management
software market. With the takeover of PeopleSoft Corporation in January 2005, the company
gained a large segment of the market and this also allowed the company to expand its
applications R&D budget. The company has also found recent success in the automotive
industry to which it provides software to serve a very wide range of functions and it provides
this software to nearly all automakers in the U.S. and many overseas companies. It has also
recently been reported that nearly 70% of the 1000 largest U.S. companies now use software
developed by Oracle. With such a wide range of software product offerings, Oracle may not be
compelled to enter new industries to remain competitive.

Business-level Strategy:

The business-level strategy of Oracle is to gain a competitive advantage over others in

the enterprise software market through its innovation and quality of products. The innovations
of Oracle include the clustered database, being the first software company to develop and
deploy 100 percent Internet-enabled enterprise software, and availability on different
platforms. It is these innovations that also lend to the perception of the quality of the Oracle
products. Because Oracle can offer more features and functions than other similar database
software, customers attribute a higher quality to Oracle software. The fact that Oracle ranks
first in database customer satisfaction for product features should say something for the quality
of its products.

As mentioned earlier, Oracle creates value for its customers through simplification,
standardization, and automation. Oracle simplifies through its Information Architecture, which
consolidates organization information into one database to allow companies to better connect
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all of their business systems and applications. Oracle’s Information Architecture maximizes
compatibility through standardization by providing integrated, standards-based technologies
for infrastructure and applications. Oracle software offers a higher level of automation than
older-model applications. This automation permits companies to manage their entire
infrastructure as one large computing system.

Since Oracle is so well known and is the largest enterprise software provider it does not
have to rely on a cost leadership strategy in order to be competitive, this allows Oracle to
charge above-average prices and reap the profits while still remaining competitive with other
companies. Although it is already the leader in the database software industry, Oracle is always
looking for new innovations as well as ways to increase the quality of its products.

Another advantage that Oracle has gained over their competitors is its acquisition of Sun
Microsystems which was an astounding move that will enhance Oracle's ability to compete
against Microsoft, VMware, IBM, and others.

Sun's infrastructure software includes four fantastic assets that address several competitive
issues in the short term. Those four are:

 Java which has been used by many of Oracle's partners and competitors (such as IBM)
would provide Oracle fusion over its middleware and database technology stack.
 Solaris represents a blow to another shared villain of Oracle and Sun: Microsoft. In
addition to open access to a vast community of developers, having a rock-solid
operating system as an alternative to Windows Server could be a very decisive
component for Oracle.
 Sun also has expertise and strong involvement in OpenOffice.org on top of its own
collaboration tools. With the help of Oracle's sales power, it could be a game-changer
for these solutions, especially at a time when Microsoft's leadership is being brought
into question."
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 MySQL open-source database: With the acquisition of SUN Microsystems, like Java,
Oracle can take this business to the next level by putting the right resources behind it.
This would be another blow to Microsoft by being positioned as a direct competitor to
Microsoft's SQL Server.

Core Competency and Market Strategy

The core competency of oracle is that everyone knows about the brand and it is their name that
sells. A product or a service offered by Oracle sells solely because of the brand name attached
to it. In order to achieve this they do the following:-

1. They concentrate on emerging markets. Emerging markets are used to describe a

nation's social or business activity in the process of rapid growth and industrialization.
Since these markets allow greater scope for growth oracle taps them and constantly
moves from one market to the next untapped emerging market. For instance, Denver
Colorado, brazil, Mexico, States in Africa, China, India. Emerging markets have a first
mover advantage.

2. Focus on ingredient branding. if the host product is new or has low awareness, if its
technology is complicated, or if the ingredient brand can provide the product with a
legitimate quality advantage over its competition, then the ingredient branding strategy
can be highly effective. if the host product is new or has low awareness, if its
technology is complicated, or if the ingredient brand can provide the product with a
legitimate quality advantage over its competition, then the ingredient branding strategy
can be highly effective.
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Emerging Market Conditions and First Mover Advantages:

The research review suggests that economic, technological, social, political, and
marketing conditions in emerging markets have both positive and negative effects on first
mover advantages. These conclusions are tentative and merit further investigation.
 First mover economic advantages are facilitated by low labor costs, dual economies
(highly skewed internal income distributions that create short-term opportunities for first
movers), economic growth, the concentration of affluent populations, pent-up buyer
demand, lack of marketing sophistication, and low levels of advertising. Economic
advantages are diminished by emerging market conditions of low per capita income, poor
infrastructure, indirect and fragmented distribution systems, foreign investment restrictions,
price controls, and tariffs and import limits.
 First mover pre-emptive advantages are enhanced by the predominance of low quality
goods and services, limited qualified technical personnel, governmental support, and low
market development. They are inhibited by oligopoly or monopoly control of scarce assets,
emphasis on personal relations in commercial transactions, tariff and non-tariff barriers, and
political uncertainty.
 Technological advantages encounter mostly inhibiting conditions in emerging markets:
low technological development, low education levels, nominal patent and trademark
protection, and lack of enforceable commercial laws and weak judicial systems.
Technological benefits are facilitated by low per capita income, which creates opportunity for
economically priced goods derived from first mover process efficiencies, and by low
technological competition.
 Behavioural advantages are aided by governmental support, low competition, and
limited marketing sophistication. These help first movers establish prototypically(the ability
of the product to establish the ideal or set the standard for its product category) and
reputation effects. These advantages are somewhat diminished by a predominance of
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inexpensive local products, underdeveloped communication infrastructures, and cultural

fragmentation.

Managerial Implications

Any consideration of a pioneering strategy for an emerging market should be

accompanied by an evaluation of a host of economic, technological, social, political, and
marketing-related factors. Many conditions specific to developing markets moderate first
mover advantages. Hence, the notion that first mover advantages accrue automatically by
virtue of entering ahead of others must be further investigated in the context of emerging
markets.
Another implication is that firms that have decided to be pioneers in emerging markets
should expect environmental obstacles and prepare specific measures to overcome them.
The third implication relates to the larger question of whether or not it pays to be a pioneer in
an emerging market. Although many emerging market conditions appear to inhibit rather than
enhance first mover advantages, companies need to account for the endogenous (internal)
qualities that may uniquely qualify some firms not only to embrace the risks and costs
associated with being first in these markets, but also succeed via their ingenuity, tenacity, and
resources. Such firms will be able to enter markets ahead of the pack, overcome negative
conditions and thrive, reaping many benefits for a long period of time.

(source: )
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Distribution channel

The distribution channel of Oracle, predominantly a product based company, is significantly

different from other channels. Oracle is a truly global company with its presence in more than 100
countries. Hence it’s a real challenge to maintain an efficient supply chain. Oracle has indeed taken the
challenge head on and proved why they are the world leader in what they do. That’s because of the
efficient distribution channel of Oracle.

Oracle has an Inside sales team in India where executives make calls, reaching out to potential
clients. There are around 2000 Business development Executives (BDE). Roughly, for every 15 calls that
a BDE makes, 1 company would be interested to take a demo. Let’s assume that the interested company
is in Brazil. This BDE reports this prospective client to the sales team in Brazil. They are the onsite sales
team. They sales executives there will set up a meeting with the interested company. These executives
report in to an onsite sales manager, who meets the customer. They have an initial round of meetings
during when the sales manager understands the exact needs of the customer. The customers ask for
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specific technical information to the sales manager. He then involves the Pre-Sales team. This team has
the technical experts. They prepare the collaterals and the presentations to be given to the customer.
Then, the pre-sales team gives a technical presentation and a demo to the customer. They either do a
video conference or travel to the client’s place. In a product company, demo happens before RPI and
RPF. If the client is satisfied with the presentation and demo, then they send a Request for Information
(RFI) to the pre-sales team. RFI is sent by the client to Oracle. The pre-sales team then sends a Request
for proposal (RFP) to the client. RFP is sent by Oracle to the client. This is a detailed document which
explains the legal clauses, disclosure agreement etc. This might even run up to 100 pages. If the client is
still satisfied with the RFP, a work order is generated and rate charts are prepared. The detailed
discussion about the pricing is discussed at this stage. If there are any disagreements at this stage, the
top people from Oracle (Director or VP) meet with the top people of the client and negotiate to reach an
agreement. If they client is satisfied with the RFP, an agreement is signed. The transition team takes
over from here. The pre-sales team is no longer involved. The transition team is responsible for the
implementation of the product at the client place. From here, the project starts. This team also is
involved in maintenance of the product, error fixing etc. This is the overall distribution channel that
Oracle follows.

Pricing
Oracle has two primary pricing models. Customers can choose between Named User Plus
and Per Processor pricing models based on their specific needs. Named User Plus is ideal for
organizations with discrete and countable user populations. For uncountable populations,
processor licensing is required. The Processor pricing model is based on the number of processors a
customer has installed and the number of those processors that the customer has operating. This
model is easily measured, a fact that makes costs transparent for our customers.

Named User Plus Metric

This metric is used in environments where users can be identified and counted. Named User
Plus includes both humans and non-human operated devices. All human users and non-human
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operated devices that are accessing the program must be licensed. A non-human operated
device can be many things, such as, a temperature monitoring device. It is important to note
that if the device is operated by a person, then this person must be licensed. A licensed Named
User Plus may access the program on any instances where it is deployed, provided that the
minimum on each server is met.
Per Processor Metric
This metric is mostly used in environments where the software users cannot be easily identified
or counted, such as internet-based applications. The Processor metric is also used when it is
more cost effective than Named User Plus licenses. All processors where the Oracle programs
are installed and/or running must be licensed. The number of required licenses shall be
determined by multiplying the total number of cores of the processor by a core processor
licensing factor.

People and Processes

Oracle Financial Services Software Ltd. has a broad hierarchy depending upon the
products/services offered and has a two way communication channel. Broadly there are four
offerings from OFSS viz-a-viz, Products, Services, Consulting and Support Functions.
Under product division there are many division heads based upon the geographical
requirements. Under each divisional head there are divisional managers who are responsible
for the planning, implementation & promotion of the product. Under Divisional Managers are
the sales & delivery personnel who take care of the sale initiation and closing.
In case of Services division the order is similar to that of a product division but with much a less
number of personnel involved at each stage.
Under consulting division the divisional head is preceded by the divisional manager who
precedes the consulting team. The consulting team helps the prospective customers in defining
their needs and thereby offering the best solutions to the prospects.
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The support function is of great importance since it is responsible for the after sales
support and other queries. It involves recruiting the right people, training and administers them
to provide high level of customer satisfaction by facilitating the customers with correct services
support.
The information is disseminated across each of the division till the end customer.
OFSS is a people-centric organization where the core values are Fairness, Openness,
Respect to Individuals, Team work, Customer Focus, Quality & Meritocracy. People are treated
assets. On the process side, the organization has been extremely mature – in 1994 the company
was assessed at Level 4 in the SEI CMM model, in 1999 at Level 5 & in 2008 we were at Level 5
of CMMi. There is enough scope for “Re-use” & learning for all as part of induction.