SAS Institute Case Analysis
1. Basic Business Model
The business model of SAS is such that it in general it offers services coupled with software. Unlike typical firms in the industry it follows an annual software subscription model. Rather than sell its software, SAS leases to its customers - a strategy of immense importance in understanding the company’s relationship to its users. The fact that leases must be renewable annually creates a tremendous emphasis on customer satisfaction and quality in addition to stabilising its revenue. Furthermore, its products are made based on what customers require and its developmental process is almost wholly customer driven. There is also a strong focus on employee satisfaction leading to customer retention and loyalty which SAS believes is directly linked to customer satisfaction. As seen by the SAS Institute, the leasing strategy helps keep the company sharp by ensuring that technological advances are driven solely by customer needs.
2. Capabilities and Core Competencies to execute its Business Model SAS possesses many capabilities and competencies to help execute its business model effectively. These include flexibility from being a private company, an effective tacit leadership, unique corporate culture, strong brand, dedicated human capital and a considerable amount of financial resources which they efficiently allocate to certain projects whenever required. Being private, it is able to focus on the long term, continue to implement activities which have a strong focus on employee satisfaction and focus on slower but steady growth, something that would have most likely have not been possible had SAS been a public company. With a strong leadership spearheaded by CEO Jim Goodnight, coupled with a strong brand, SAS is able to recruit and retain the key talent it requires to execute its business model. Having a corporate culture which is egalitarian and based on mutual trust and respect also plays a significant role in retaining talent and keeping
The business model of SAS is such that it in general it offers services coupled with software. Unlike typical firms in the industry it follows an annual software subscription model. Rather than sell its software, SAS leases to its customers - a strategy of immense importance in understanding the company’s relationship to its users. The fact that leases must be renewable annually creates a tremendous emphasis on customer satisfaction and quality in addition to stabilising its revenue. Furthermore, its products are made based on what customers require and its developmental process is almost wholly customer driven. There is also a strong focus on employee satisfaction leading to customer retention and loyalty which SAS believes is directly linked to customer satisfaction. As seen by the SAS Institute, the leasing strategy helps keep the company sharp by ensuring that technological advances are driven solely by customer needs.
2. Capabilities and Core Competencies to execute its Business Model SAS possesses many capabilities and competencies to help execute its business model effectively. These include flexibility from being a private company, an effective tacit leadership, unique corporate culture, strong brand, dedicated human capital and a considerable amount of financial resources which they efficiently allocate to certain projects whenever required. Being private, it is able to focus on the long term, continue to implement activities which have a strong focus on employee satisfaction and focus on slower but steady growth, something that would have most likely have not been possible had SAS been a public company. With a strong leadership spearheaded by CEO Jim Goodnight, coupled with a strong brand, SAS is able to recruit and retain the key talent it requires to execute its business model. Having a corporate culture which is egalitarian and based on mutual trust and respect also plays a significant role in retaining talent and keeping