Apple Computer Inc and the use of sales force automation

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Brian Baker



Individual Project

Apple Computer Inc. and the use of sales force automation

The technology I choose to research and analyze is a type of an operational customer relationship management (CRM) technology. Specifically I choose to look at sales force automation or (SFA). I used Apple Computer Inc. as the company in which the technology would be implemented. The purpose is to asses the SFA technology in its current and projected future forms, to determine if it is a viable opportunity to create a substantial amount of value for the organization

The use of a customer relationship management system such as sales force automation is of great use to any large corporation of today. Beginning as a rudimentary and basic system of files and paperwork filled out and stored physically by sales people, the use of SFAs has taken over much of the process. This has allowed more and more complex and complete fulfillment of the following processes. The system would provide many benefits to businesses. Such managerial capabilities would include the ability to automate forecasting, sales administration, and account and contact management. By automating these functions and operations Apple Computer Inc. would save many man hours and money. Other capabilities that a SFA technology could bring to the table are tracking: customer preferences, order types, and price quotes. Lead time and self performance could also be easily tracked under a SFA. All of these primary applications can be undertaken with the technology of today through the use of SFAs.

Current limitations of SFA are that some systems are not currently designed to handle overly large sales forces or corporations. For instance, is set up with a basic template to handle basic functionality and what might be limited capability or data input ability. This may be an issue for a company with a very large sales department in terms of employees, customers, and complexity.

Over the next several years, for instance by 2010, SFAs will continue to expand in terms of capabilities, function, speed, and access. This will reward those who are early adaptors with ease of transition, use, and implementation. In the near future SFAs will also become more and more advanced and integrated with multiple systems of corporations, allowing them to complete more complex and multi-functional processes.

It would be my recommendation that Apple Computer Inc. implement a type of sales force automation to assist in the maintenance, development, procurement, and satisfaction of customer accounts, information, and needs.

The SFA technology would be able to enhance many of Apple’s processes, strategies, and operations. For instance the ability to forecast demand based on detailed customer preferences, demographics, and performance would be a huge advantage to Apple. By forecasting the amount of demand Apple would be able to be ready to capitalize on every possible sale, leaving no sales unable to be filled. Also Apple would not be overproducing products with lower demand. This would also provide insight into the end users view of products, more forecasted demand is in direct relation to end users acquisition and value associated with the product. Hence, giving Apple a greater understanding of what the customer wants.

In terms of processes and operations the SFA would allow transparency of accounts, contacts, quotes, and sales administration. By allowing the management and sales people to more completely understand what the processes are allows better performance and less lead time. Also a pure enhancement of the technology is the speed at which information pertaining to customers and sales can be accessed, allowing for more networking and interaction with customers than with a traditional paper system. This in turn will allow sales people to be more productive and generate more sales for the company.

The adoption of the technology of SFA as projected to exist in 2010, by other firms is that of positive implementation. The results of the greatly improved and extensively more efficient and robust SFA systems will be vast and noticeable by many firms. Firms such as Hershey, General Mills, and Procter and Gamble will be able to more accurately determine demand and forecast future needs based on trends, demographics, and tracking all interpreted and analyzed by the system. Also the ability to precisely determine account management needs such as reordering or re-supplying customers with no experienced lead time for them. Essentially having a system so advanced it recognizes, orders, and delivers a product to the customer precisely on time to maintain appropriate supply levels automatically.
The firm I choose to implement the sales force automation is Apple Computer Inc. Apple Computer is a multi-billion dollar corporation with a market cap of 64.61 billion, and an enterprise value of 55.12 billion. It is a strong leader in the personal computing market and consumer devices. Its operations include development, manufacture, and sale of products such as the iPod, the iMac, the iBook, and many other devices. Also within each category are a range of types of that product, for instance a consumer can choose what size hard drive for their iPod and what size they want. Also iTunes has become a major point of success for the company opening the market of music and video sales to anyone with a computer, internet, and credit card. With a 10.34% profit margin and revenues at 18.16 billion annually, and 24% quarterly revenue growth Apple is in a strong and healthy fiscal position.

Apples stock performance over the past year has been amazing it has risen from $50/share up to 74.62 as of 10/5/2006. Apples stock price is even more of a success story when looking at the 5 year chart; Apple was a mere 6 dollar stock 5 short years ago. Apple is top of the line in product development and marketing and that’s what their stock price has reflected over the past years. Their major competitive strengths rest with product differentiation, with many companies making Windows based computers, only Apple makes computers capable of running their operating system. Also the iPod is a major product that is differentiated from their competitors with design and functionality far surpassing that of rivals. This has allowed Apple to capture most of the mp3 player market and make substantial profit off it. The iPod also lead the way to iTunes which incorporated the iPod and your music. One weakness the company does face is that its products are usually a greater cost to consumers due to the greater engineering and technology present in them. This could be a problem if consumers fail to see the value in paying more, but as long as Apples products continue to be top of the line and differentiated from others, they will be able to capture markets.

Apples strategic environment is in consumer computers, and handheld mp3 players. Major opportunities are ahead of Apple with the ability to capture market share from competitor Microsoft’s Windows based systems. It does however face some large threats from Microsoft in its mp3 market. Microsoft is launching a product called Zune to compete directly with the iPod. Along with Zune Microsoft is launching its own online store for mp3s like iTunes. With these products coming from Microsoft there is a potential for a large amount of market share to be lost. There are also countless smaller competitors that make somewhat similar devices for playing mp3s but their technology and design is far less superior to Apples products which don’t affect Apples target market.
I would recommend that Apple Computer invest in a sales force automation system that would improve efficiency and effectiveness in their business processes. I would recommend an immediate implementation, considering that they would be able to take full use of available systems such as which are equipped to handle their needs. I do however recommend that Apple continue to plan for the future and continuously push for upgraded capabilities whether through, a competitor, or internally generated sales force automation.

The primary application would be to allow sales teams to better understand the customer and their needs, while providing a way accurately asses and meet those needs in an appropriate and economical way. For instance Apple would receive benefits of reduced inventories and the costs and risks associated with carrying those inventories. Reduced inventory would be possible due to a better understanding of the market and demand through forecasting and account tracking. Another benefit would be lowered lead time to customers; this would result in more sales possible either through direct sales to end user or through sales to stores which would then sell to the end user. The lowered lead time would ensure stores including online venues would be sufficiently able to meet customer demands and prevent customer loss because of long lead times. This would be possible due to the SFAs ability to forecast and track customer preferences, so products could be ready to fulfill customer’s needs, while still maintaining a low amount of inventory. A third benefit would be performance management and review, the SFA would show what stores and products are doing well and which are not. This information can help to determine the best course of action, weather to close a store or discontinue a product. It could also help understand why certain aspects of the business are performing well and shed light on how to improve performance in areas that are lacking.

Possible disadvantages of using this technology are the fact that it could be costly to implement. Also it is continuously evolving into a more powerful tool which would require a commitment to keep up with the technology in terms capital spending on the system itself for upgrades, changes, and maintenance along with spending on training personnel on those changes. There are clear limitations to the current state of the technology, one being the difficulty in handling inordinate amounts of data and input which might be required by companies, such as General Mills or Procter and Gamble, efficiently through services such as

Organizational costs associated with implementing a SFA are many, but with them come large rewards. Some costs include the time and money needed to identify factors that are important to customers, their service, and to you. Also costs associated with the implementation are: directly acquiring a SFA system, maintaining that system, and training employees on that system. To increase successful adoption of this technology it will have to explore all of its options and choose the one that best fits the needs of it self, its consumers, and its users. It will also have to use the system appropriately to its full ability to reap maximum benefits from its implementation. A major factor in the success of the technology for the firm will rest in upgrading and improving the systems capabilities regularly to remain efficient and competitive in the marketplace. The most successful adoption will be an evolving one which takes a SFA from its current state and adapts it to the changing business environment by incorporating it with other systems to achieve maximum visibility and cross-functional abilities of all systems being used at the corporation.

Sources of additional information

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