1. Oracle Attempts to Consolidate the Software Industry
Oracle announces acquisition of Seibel Systems for $5.3 billion in cash and stock in late 2005
Oracle had completed 7 acquisitions prior to Seibel acquisition
Oracle’s intensified focus on business applications software reflects substantial changes in its operating environment

2. Case Study: Oracle Attempts to Consolidate the Software Industry
1. How would you characterize the Oracle business strategy (i.e., cost leadership, differentiation, niche, or some combination)?

3. Case Study: Oracle Attempts to Consolidate the Software Industry
Cost leadership as Oracle seeks to
Add revenue with little additional cost
Grow revenue through cross-selling
Achieve economies of scale through better operating facilities utilization
Achieve economies of scope by closing duplicate G&A, R&D, and sales and marketing departments
Niche as Oracle focused on increasing share of business application software market
Differentiation as Oracle attempted to differentiate itself by developing the ability to offer a range of integrated business software applications (similar to Dell, HP, and Xerox more recently)

4. Case Study: Oracle Attempts to Consolidate the Software Industry
2. What other benefits for Oracle and other competitors such as SAP do you see from further industry consolidation?

5. Case Study: Oracle Attempts to Consolidate the Software Industry
Additional pricing power by reducing the number of competitors
Depriving competitors of potential customers

6. Case Study: Oracle Attempts to Consolidate the Software Industry
3. Conduct an external and internal analysis of Oracle describing those factors that may have influenced the development of Oracle’s business strategy?

7. Case Study: Oracle Attempts to Consolidate the Software Industry
External analysis
Oracle’s core database products, which accounted for 70% of firm’s revenue) achieving market saturation
Customers want vendors providing full range of integrated software products
Internal analysis
Oracle’s core competency is developing database software ( a niche product)
Oracle’s products based on proprietary software that doesn’t easily integrate with other software products
Conclusion: Oracle not well positioned to meet changing
external trends

8. Case Study: Oracle Attempts to Consolidate the Software Industry
4. In what was the Oracle strategy targeting key competitors?

9. Case Study: Oracle Attempts to Consolidate the Software Industry
Oracle’s strategy targets competitors by eliminating partners with whom competitors had worked to augment their product offerings to customers (e.g., IBM and Seibel).