Case Study of SAS Business Strategy
What kind of approach does SAS pursue (cost leadership/differentiation)? Discussion about staff, resources, and performed activities. To justify your answer, provide a comprehensive analysis.
In comparison with other competing companies, SAS implements the Porter Force differentiation strategy concept that makes it distinct. The main focus of this strategy is on the competitive edge. One way they did this is to move to cloud-based technology. SAS produces high-quality software and creative goods. Due to the increased simplicity of decision-making, it is suitable for any customer. The product must meet current market requirements and create incentives to return to its clients.
One method SAS is to benefit from competitiveness is by constantly reinvesting in R&D. They strive to keep the game ahead of technology while providing their consumer base with incredible happiness. SAS is seen as a major global analytical company and it must maintain this unique market position. Technology is always expanding and continuous investment is needed to ensure that businesses stay ahead of the curve. This is another piece of evidence that SAS is an indicator because costs would be maintained to a minimum if they were cost-driven.
Another means of encouraging a positive work environment for employees is for SAS to acquire a competitive advantage as a differentiator. By providing them with difficult work possibilities, SAS displays faith in its workers. They also accept the requirement for the person to live without work if they achieve the requirement of the 8-hour day. SAS attempts to relieve the stress of employees to bring essential benefits, such as healthcare, the fitness center, day-care, and performance prizes. These working circumstances assist employees to meet both personal and professional requirements which are essential to promote a positive working environment. Again, a considerable amount of funding is necessary to show that low-cost procedures are not so significant.
SAS is a distinctive and powerful brand that distinguishes out from its competitors at the moment. They are prepared to spend money to improve their firm and produce value. This is demonstrated by investment in employees, business growth, and possibilities for development.
How critical are your measures or key success indicators to assess the effectiveness of SAS? Provide at least three significant success reasons for example.
As mentioned in the last question, SAS is a quality and customer preservation differentiator. On that basis, we determined the following major criteria of success that are important for the company:
Customer satisfaction – For SAS and the analytics sector in general, customer satisfaction is extremely crucial. The SAS systems are designed to simplify and facilitate the lives of people. If you do not do so, your firm will not be successful, thus you have to keep up with consumer wants and requests quickly.
Progress in technology. The technological capabilities would be the most visible KSF. SAS works to give its customers a service based entirely on their technological capabilities and available information.
Quality of the product. SAS needs to focus on what makes its product distinctive and important for its clients. Only if the quality is made into a high KSF quality will the product be more valued.
Purchase fidelity. In this industry, loyal clients are vital. Because it is a time-demanding process, customers do not want to shop consistently for analysis items. The better it’s for the business, the more SAS customers can attract and retain. If the product is bad, which underscores the importance of the product above, customers will not be loyal.
Image of the brand. SAS has a good market reputation and does its utmost to extend this image. The more high-end customers you maintain, the better the brand image you keep. This underscores the necessity to meet the best quality for all items since a business name does not take much to destroy!
SAS has a close relationship with its strategy to its major success criteria. For the Company, the high client focus and fast-changing technology market are the primary difficulties that will extend its prosperity for many years to come if they can manage.
You’re a SAS advisor. Talk about potential profiteering difficulties at SAS based on existing strategies. By focusing on interlinked strategic budgeting cycles, how could you deal with these issues? To justify your answer, provide a comprehensive analysis.
Profit planning is a series of actions to attain a specific level of profit. This work is significant since it can help decide on cost-effectiveness improvements and enable resources to be invested or cost-effective.
Potential profit issues discovered in SAS I include:
Constant adjustments in strategy have occurred when SAS started adapting its ‘pricing strategy towards a smooth multi-annual revenue price over contract durations,’ which resulted in virtually flat revenue (0.5%) in 2019 following the adoption of a new accounting standard
Research & development investments may not always be profitable. With 1 billion dollars invested over 3 years, SAS is investing considerably in software innovation, education, and services. They also continue to reinvest an average of 25% of their income in R&D. This important expenditure might be risky for the organization if it is not profitable because in the short term it might lead to cash flow problems.
By using a substantial amount of income and time, SAS maintains employee satisfaction. Although this is beneficial, the money and time used can be re-evaluated in the future, with a 4% turnover rate (in contrast to the 20% turnover rate in the business).
With over half of its top 50 deals, SAS partners had a direct impact on over half (56 percent). This is a possible problem because SAS relies more on its partners than on the management employed for much of its sales.
Interconnected strategic budgeting cycles; three parts of interconnected strategic budgeting cycles can be used: the cash cycle, the income cycle, and the asset cycle. The (asset utilization).
Because at some point the recording standard has changed, SAS has shown flat growth at 5%. However, the exact growth of the company does not necessarily represent this. So it is vital to estimate projected sales and the increase in sales. This can be done by controlling trends month after month or year after year that are recognized as step one in the revenue cycle.
An adequate investment level may also be determined when the interconnected strategic budgeting cycles are used. As noted above, the organization’s overall expenditure and revenue can be appropriately examined in three phases of this procedure. To evaluate the effectiveness of an investment made, the methods used in this technique can include the comparison of ROI. A strong ROI will lead to a positive return on investment and a better understanding of the value of the project for continuation/repetition in the future.
The pleasure of employees plays a major part in the efficiency of the organization. But the organization must make sure that a large amount of money and time invested in staff does not affect these “committed costs” for fixed (non-varying) expenses, including discretionary (public) expenditures or activity-based indirect costs, for other expenditure necessities (set up and supervision costs). Overinvesting in the pleasure of employees might sometimes distract them from their work!
While the business is positive for new sales, half of the “new” sales originate from partners who can cause problems in the future, for example by separating or collapsing a partner organization. Predicting and planning at their management level needs some attention to be able to match themselves with the broader company model. The forecast analysis analyses the variability of operating costs and cost behavior. What is the financial amount and return on this expenditure delivered to partner companies? SAS must certainly try to gain sales on its own because its partners have affected half of the top 50 sales.
Suggest what kind of company organization in SAS should be used? Explain why the structure should be used by SAS. (Please refer to its present strategy)
As above, SAS is a differentiator that mostly relates to customer happiness. its major success elements. This would most benefit SAS from a structure consisting of market-based work units. Market-based workgroups are mainly groups/teams of people who work on a specified output (product). All functions related to their output are accomplished inside each work unit. This incorporates all procedures from design through sales, which means that all functionalities are customized for each product. Employees should be structured according to their performance into different work units.