Kauflauf GmbH Essay

Business modelKauflauf GmbH was founded in 2002.First European organisation to offer _ software as a service_The product portfolio included Customer Relationship Management and ERP software for Auto Parts, Computer/ Office Supplies and Medical Devices companiesProduct owners worked with design team, gross revenue force to prioritize refreshed features and anticipate customer demandsTheir competitive advantage was derived from their successful field consultants who provided consulting and support to customersKauflauf had three divisionsDevelopment and Support services,MarketingSalesThey had a strong competitive advantage due to _hands on consulting_ provided by field consultants backed up by the development group. As opposed to competitors who targeted larger firms, Kauflauf targeted middle market (revenues from deoxycytidine monophosphate million to 1 billion) and top-tier sm aloneer customers._CLIENT EDUCATION, HAND HOLDING AND CUSTOMIZATION_ were the main areas of focus for th e sales force, in order to obtain customer loyalty. The culture of the company was _YOUTH lie AND ANTI-HIERARCHICAL_ . It was characterized by small company friendliness and deep pride in superior software engineering.JESS WESTERLEYAn American woman who had lived with her family in Germany as a child, Jess had genuine a love for the country and was fluent in the language. She has been hired as Assistant Product Owner (CRM product) for computer and office supply wholesalers and retailers.CREDENTIALSJess came with a proven track record. She had earlier worked with a rapidly growing CRM software service provider in the United States, where she demonstrated great success in growing market share.Has high degree of analytical capabilities and keen grasp of market evolution.Is deeply interested in computers, management and international business.Able to treat German and form informal relationships with her colleagues.RESPONSIBILITIESTo understand the market and customers.To establish pr oduct development priorities to serve both existing and future customer needs.To increase sales volume and enable greater penetration in the global CRM subscription software marketJESS WESTERLYS PROPOSED CHANGEEven if the external environment was non changing, the competitive landscape was stable and Kauflauf was doing well in terms of business and revenues, the company still required to bring slightly a variegate. The internal environmentwas changing and demanded for Kauflauf to shake itself up in regard to its strategy, processes and structure.With its single minded focus to operate in the middle size market segment, the firm was operational in silos. There was a persistent failure to spot new development and opportunities in the market.Thus, to trigger off innovation, increase sales revenue and shew more than agility in the company, Jess Westerly proposed a change in the sales call patterns at Kauflauf GmbH, with the field consultants redirecting atleast 30% of their time and focus towards larger, more established potential purchasers of CRM software services in the computer and office supply business.Based on Jess westerlys own quantitative abstract and simulations, she had identified thatOnly 35 % of the consultants time went to customers who produced 85% of the revenues, while the remaining time was spent with smaller, little profitable accountsBy lessen the time spent with customers with annual sales volume less than 250,000 (Class 5 and 6 clients) by 20%, and instead focusing on bigger prospective clients , Kauflauf could increase revenues by 30% landing field Consultants spending time on closing sales for companies with less than 100,000 in annual sales volume solitary(prenominal) yields suboptimal returnsKauflaufs recent success in getting business from Dart, one of worlds largest suppliers of computer parts through persistent call efforts as well supported her proposalThus, the company was losing significant sales growth opportunities b y strictly focusing on smaller accounts and neglecting large prospective companies.WHY IT FAILED THE enemy TO CHANGE1. An organization-level change requires the change agent to clearly communicate the vision ahead to those being most impacted by the change. Jess Westerley did non speak to RSDs and consultants beforehand sending out the memo to implement the changes.2. Change requires the agent to form a core group of people who buy into his/her idea and begin the change process. Jess did not explain why there was a need for change, even though there were no changes in the companys external environment. Internally, it seemed that all was well too. Hence, the field consultants felt that she was intruding into their work schedule. To them, it appeared that she was interfering with their work-patterns though she had no idea of how things actually worked.3. Jess did not understand the challenges faced by consultants at different levels of experience She did not seek the consultants opinion which could have contributed to the change. The issues that came to light when Jess sent out the memo were Consultants felt that this proposal was not for their marketThey did not wish to work for a firm that served larger accountsThey doubted whether such a change would be good for the firms competitive advantageThey doubted Jess understanding of different marketsThey had concerns about Kauflaufs development capacity to support class 1 and 2 sales4. She did not get approvals from the higher management and RSDs before approaching the Field consultants. An approval from them might have madethem think of the change more seriously. However, the entire change process that she suggested was completely based only on her abridgment and simulations, and it did not have the backing of the higher-ups.5. Large clients did not allow consultants to have access to top management and hence closing a sale was tougher and less probable. However, this was the one point which gave maximum mot ivation to the consultants. Since closing a successful sale required a lot more effort with larger clients, the consultants were go forth disappointed at times when all their efforts did not bear fruit. Hence they were up in arms against the idea of changing their call patterns towards larger clients.