External Environment of Salesforce

Threats
There are several challenges and threats that Salesforce is confronting due to external factors. Politically, the environment of catering to political factors is growing and due to uncertainties, it is affecting all the businesses especially the international business (Pratap, 2019). Salesforce and other software companies face political threats from countries which puts their companies (domestic business) over international services which makes it difficult and complex for the companies to enter into various countries because of these barriers (Pratap, 2019). It constricts the scope of the business. Also, as the technology is increasing, the governments are moving towards more private data conservation due to which there are frameworks and laws protecting their countries’ data (Salesforce.com SWOT and Pestle Anlaysis, 2018) threatening the growth of the company.
There are some socio-economic threats and challenges as well as the people are changing and the trends and the buying patterns keep changing because of different cultures (Pratap, 2019), it is very important for the Salesforce to keep themselves updated of all these barriers and changes to better penetrate within the market.
Technology is the main factor that derives the growth of this company and since the competition with the competitors is intense in the CRM industry, it’s very threatening to the company as it has to innovate constantly and keep updating since the competitors can come up with any disruptive technology and rule Salesforce out of the market. Also, since there has been an upward growth of technology, there are a number of threats that has come with it like data hacking and data stealing. Since it’s a software company, it is prone to hacking and stealing of the data (Salesforce.com SWOT and Pestle Anlaysis, 2018) causing the core competencies of the company to be easily copied and taken advantage of.
Opportunities
There has been a lot of political factors that has also provided benefit to these companies through increasing the consumer’s income levels by cutting the taxes like in US Tax Cut of 2017, leading to more consumer spending in the US market (Pratap, 2019). The economy has been stable in the past few years and the countries especially the target countries of Salesforce which are US, Europe and Asia Pacific, have seen a fair economic growth leading to more jobs, companies being able to purchase better goods and services (Pratap, 2019), increasing the customer base of the company. Also, there has been growth opportunities according to some analysts of the US Economy which will give Salesforce an opportunity to expand as more and more companies would be turning towards these software companies to control their operational cost (Pratap, 2019).
There are numerous opportunities for Salesforce to acquire new and upcoming small business to expand their business and maintain the leading position in the market like InStranet (Salesforce.com SWOT Analysis, Competitors & USP). It also has various opportunities to go through vertical and horizontal integration and strategic alliances like with Google and other software companies (Salesforce.com SWOT and Pestle Anlaysis, 2018) to grow and innovate more within the domain of CRM.
Threats Outweigh Opportunities
There are numerous threats for the companies but the company has still maintained its position as one of the leading cloud companies (Pratap, SALESFORCE.COM SWOT ANALYSIS, 2019). It was able to grow even with the toughest competitors like Amazon, Microsoft and IBM (Pratap, SALESFORCE.COM SWOT ANALYSIS, 2019) which shows that despite having numerous challenges Salesforce continued with its journey successfully. Thus, the threats are more and does outweigh the opportunities but still the company has progressed. The threats outweigh opportunities as there are political barriers and growing concern for privacy and data conservation in most countries (Salesforce.com SWOT and Pestle Anlaysis, 2018), making it more challenging to break through it. Due to technological advancement there will always remain a threat of data hacking, impacting the company in huge ways. There are various opportunities as well, but the threats are more weighted than the opportunities.
Response to Opportunities and Threats
Salesforce has been one of the top leading cloud companies and has managed to grow faster than the competitors through various acquisitions including MuleSoft and Datorama (Pratap, SALESFORCE.COM SWOT ANALYSIS, 2019). Not only this, it has continued to grow and innovate to beat the competitors in this tough environment through bringing about new features and platforms like sales force automation, digital commerce etc. getting to the revenue of 10.5 billion dollars in 2018 (Pratap, SALESFORCE.COM SWOT ANALYSIS, 2019). Since the countries like Asia have very strong barriers and complex socio-economic culture, Salesforce has partnered with local players to penetrate into the market as international players cannot enter into the market without a local partnership (Pratap, PESTEL ANALYSIS OF CRM BRAND SALESFORCE, 2019).
Salesforce has efficiently responded to the threats and opportunities which shows in the profitability and success of the company but it needs to counter some factors that can create threatening position of the company in the future. To take advantage of the opportunities present in the market, Salesforce needs to create a customer centric approach and to have a strong business model that takes into account all the political uncertainties. Salesforce need to develop marketing strategy which is locally suited according their linguistic and culture so more and more companies can be attracted to it. Localized marketing strategy helps the company to understand its consumers more deeply and customize the services according to their needs. Salesforce also needs to expand internationally to different countries, maximizing its scope of business. As the software company provides solutions to various companies, the economic factors are very much in favor of the growth of Salesforce (Pratap, PESTEL ANALYSIS OF CRM BRAND SALESFORCE, 2019). These are the factors that will help the company to reap more benefits from the external environment as these opportunities will help the company be more innovative and technologically more advanced in the coming years, helping it to counter the threats present in the environment for these tech companies.
References
Pratap, A. (2019, November 18). PESTEL ANALYSIS OF CRM BRAND SALESFORCE. Notesmatic. Retrieved from https://notesmatic.com/2019/10/pestel-analysis-of-crm-brand-salesforce/
Pratap, A. (2019, March 2). SALESFORCE.COM SWOT ANALYSIS. Notesmatic. Retrieved from https://notesmatic.com/2018/09/salesforce-com-swot-analysis/
Salesforce.com SWOT Analysis, Competitors & USP. (n.d.). MBA Skool. Retrieved from https://www.mbaskool.com/brandguide/it-technology/2609-salesforcecom.html
Salesforce.com SWOT and Pestle Anlaysis. (2018, December). S & P Swot and Pestle.com. Retrieved from https://www.swotandpestle.com/salesforce/