Analysis of Case Study

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 Misunderstood the product demand No prior experience High switching cost MCSEs were not ready to shift to Linux Very few Unix/Linux based System Engineers Large sales cycle Product less in features

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Sales Model
Product
Linux based Openmail

Process
Appointments with CIOs and Presentations Most of the leads were generated through contacts

Customer
Large Organisations (> 0,000 seats)

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Channel Direct Selling Product Linux based Email & Calendering Place Approached large corporations Price 43% lower than MS Exchange over 3 yr period Onetime $60 per seat fee + 20% List price for maintenance
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views of the CIO is echoed to the lower ranks There are plenty of medium & large enterprises where running current systems was cumbersome and needed change Confident about standing by the transaction sizes due to large and medium enterprises
The
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Skill of the sales personnel Length of the sales cycle Targeting the right customers High cost per sale Relationship management

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 Startup

No credibility Did not consider the views of operations team Very few people on Linux/Unix platform Scalix has product issues

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a customer base in the small and medium segment enterprises Build a new strategy to tackle CIO, Bottoms-Up method where training is given to lower rank employees. Have Linux/Unix based certification.
Build

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Scalix should emphasize on a combined model (Direct +Indirect Sales) Direct sales model makes contacts easy with large enterprises Tele Sales models should be adopted in order to target the small enterprises A contract with a large enterprise would act as a goodwill to get contracts with similar or small sized companies Scalix doesnt have Acts & Assets to offer credibility in the market and hence clinch deals with medium and large enterprises. They are not willing to take risk by going with Scalix as the stakes are very high as e-mail is an integral part of an organization.

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Targeting mid market companies will bring credibility and reliability for Scalix. Point of Differentiation Price, which matters more to mid market segment rather than Medium and Large Enterprises. Can use revenues from mid market sales to cover Total Variable Costs. In Initiation stage it is important to break even rather than make profit. Time taken to close a deal is small in mid market sales. With small organizations stakes are lower and chance to learn from mistakes.

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Telesales

Direct Sales

Start up in initiation stage. Low Value accounts. Low Selling Cost. Low Value familiar Product. Lower Connect with the Customer

During maturity stage High Value accounts. High Selling Cost. High Value unfamiliar Product. Greater connect with the Customer

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