Oracle Inc. Case Study

This case study analyzes the strategic management of Oracle Inc., a multinational corporation of computer technology. It provides an overview, history, and past performances of the company, as well as describes its HR strategy. The strategic challenges are evaluated using PESTEL analysis, SWOT analysis, and Porter's Five Forces. Suggestions for the company are also provided.

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Running Head: ORACLE INCORPORATION
Oracle Inc. Case Study
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Running Head: ORACLE INCORPORATION
Table of Contents
Introduction......................................................................................................................................2
Overview, History and Past Performances of the Company...........................................................2
Description of its Strategy...............................................................................................................3
Strategic Challenges........................................................................................................................3
Suggestions......................................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Oracle Inc. is a multinational corporation of computer technology based in USA. It
headquarters is in Redwood shores in California in USA. The paper will analyze the strategic
management of Oracle Inc. It will provide overview, history and past performances of the
company. It will describe the HR strategy of Oracle. Different types of strategic tools will
evaluate the strategic challenges of the company. PESTEL analysis, SWOT analysis and Porter’s
Five Forces will be used as strategic tools to analyze the strategic challenges of Oracle. There are
various factors which have impacted the strategic planning of the firm. Moreover it will provide
some suggestions to the company.
Overview, History and Past Performances of the Company
Oracle Inc. is a multinational corporation of computer technology based in USA. It
headquarters is in Redwood shores in California in USA. The firm develops and markets
database technology and software, products of enterprise software and cloud engineered systems,
specifically its own products of database management systems (Oracle.com, 2019). In the year
2018, it was declared the third largest producer of software after Microsoft and Alphabet. Oracle
also makes and develops tools for database systems and development of middle-tier software,
software for customer relationship managements (CRM), software for supply chain
managements (SCM) and software for customer enterprise resource planning (ERP).
Oracle was established by Larry Ellison along with Bob Miner and Ed Oates and with the
name as Software Development Laboratories (SDL) in the year 1977. In 1970 Ellison was
inspired from a paper of Edgar Codd based on relational database management systems. Ellison
heard about IBM System R from the article of Oates. He desired to make the product of oracle
compatible with IBM System R, but could not do so as the codes was kept secret by IBM. In
1979, SDL was named as Relational Software Inc. and 1982 as Oracle System Corporation. At
that time, Bob Miner was the senior programmer. The firm sold its first product on 12th March in
1986. In the year 1995, the company’s name was officially changed as Oracle (Oracle.com,
2019). The early success of Oracle was due to use of C program in its products.
Most of the firm’s success has come by acquisitions of software firms with products for
technology applications. It had claimed high-profile and multibillion-dollar acquisitions of

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PeopleSoft in 2005, Siebel in 2006, BEA in 2008, Sun Microsystems in 2010 and NetSuite in
2016. Ellison got success through his early implementation of internet ((Jasiulewicz-Kaczmarek,
2016). The company had made products which were compatible with the technologies of World
Wide Web which helped Oracle to develop besides acquisitions.
Description of its Strategy
The business strategy of Oracle is to continue making profits from software licensing and
Oracle Information Architecture along with the efforts to assess the fields of education and
consulting (Altamony, Al-Salti, Gharaibeh & Elyas, 2016). Larry Ellison has identified relational
databases as great opportunity for its business and one of the many brilliant moves made by
Ellison all his career. In 1970's, an idea of inter-connected data storage was brought by IBM,
which allowed the users to perform for the ad-hoc queries. This concept was failed to capitalize
by IBM, but Ellison grabbed the opportunity and made it successful (Bell & Rochford, 2016).
Oracle programs are utilized by manufacturers and government agencies for their data
management.
In the initial period, the company was a win-at-all-costs and sales-driven organization.
With its unique products and a hungry market Oracle turned into one of the top organizations of
the world with the help of this formula. The strategy of HR management of Oracle is to institute
a global framework for the consistent HR procedures (Bruner, Micaelian & Bruner, 2017). The
HR track all the sensitive information of the employees for a purpose like tax calculations and
display the sensitive information according to data privacy laws of the country. The HR
management systems (HRMS) manage the entire lifecycle of the employees in Oracle. Various
functions of HR like employee benefits and payroll are managed by HRMS (Elmonem, Nasr &
Geith, 2016).
Strategic Challenges
SWOT Analysis
Strengths Weaknesses
 Great leader like Larry
Ellison
 Oracle offers best
 Stiff competition from
top IT companies
 Strategy limited to

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product suite through several
acquisitions
 It has market
dominance in 100 nations all over the
world in ERPs
 Excellent R & D and
technological innovation
thinking and innovation
 Several controversies
and court cases lead to negative brand
image
 Less control on
international operations than domestic
operations
Opportunities Threats
 Access the hardware
market through acquisitions and
expansions
 New brand visibility
can be high point
 Merging with
government firms of the world can
help to develop its business
 Tapping the vast data
and internet market along with B2C
solutions
 Integration problems
due to acquisitions
 Recessions and market
fluctuations can decrease the profits
 Increasing competition
can reduce the market domination
The strengths of Oracle is showing that the company is developing and augmenting its
profits. Its great leader, best product suite through several acquisitions, market dominance in
world’s 100 nations and excellent R & D and technological innovation allows Oracle to be in an
advantageous position as in comparison to its competitors in the same industry (Kallimani,
2018). The firm carry out several activities that contribute highly to its efficiency. This is
followed by acquisitions which have expanded the product range of Oracle and led to gain
profits. The strengths and opportunities of Oracle has several limitations. Several weaknesses
and threats has slow downed the performance of the firm to some extend by posing limitations
on the management of Oracle. Some of the weaknesses of Oracle are stiff competition from top
IT companies, strategy limited to thinking and innovation, several controversies and court cases
and less control on international operations than the domestic operations (Niazi et al., 2016). The

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threats of Oracle are integration problems due to acquisitions, recessions and market fluctuations
and increasing competition.

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PESTEL Analysis
(Source: Kaltenecker, Hess & Huesig, 2015)
Political Factors - The factors of politics plays a vital role to determine the factors which
affects the long term profitability of Oracle in the market of USA. The company operates in the
industry Application Software in USA and expose itself to various political risks and
environment. In order to accomplish the success in the dynamic industry of Application Software
of USA, Oracle has to differentiate the systematic threats of political situations of USA. The
corruption level in regulations of technology sector and interference of US government in the
industry of Application Software are other political issues (Olszak, 2016).
Economic Factors - The economic factors like inflation rates, interest rates, foreign
exchange rates, economic cycles and savings rates determines the total demand and investments
in the economy of USA. The norms of competition also affect the competitive benefit of the
company. The frequent changes in economic factors like growth rates and economic indicators of
inflation and industry like the growth rates of the industry of Application Software and customer
investment to predict the growth rate also affect the firm.

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Social Factors - The culture of the society and ways of doing things affect the
organizational culture of Oracle in the working environment. The changing attitudes of the
people of USA and their shared beliefs pose challenges to Oracle (Pati & Veluri, 2017). The
marketers at Oracle need to identify the potential customers of the US market and design its
strategy in accordance to the customers of Oracle.
Technological Factors - Since the past 5 years, the technology has been changing
rapidly and so it is rapidly disrupting Oracle by providing opportunities to other established
players in the industry to handle the changes. The industry of Application Software is ruled by
players such as Microsoft, SAP and IBM (Nasir, 2017). The industry is fast moving towards the
automation by technology like Google & disrupting Oracle. The company not only carry out the
technological exploration of the industry but also the speed of the technology which is disrupting
the operations of Oracle. Slow speed takes more time and give the company little time to handle
technical issues.
Environmental Factors -The changes in the norms of environment also changing the
priorities of product innovations. The initiative to make renewable and eco-friendly
technological products always put pressure on Oracle (McDonald, 2016). Extreme climate also
adds to the operating cost of Oracle as it has to invest more in making more flexible supply
chain. Moreover regular scrutiny by the environmental organizational also adds to its operating
costs.
Legal Factors - The changes in some of the laws of USA such as Anti-Trust Law,
Employment Law, Discrimination Law, Health and Safety Law, Consumer Protection and E-
Commerce Law, Data Protection Law and Copyright, Patents and Intellectual Property Law in
the industry of Application Software as well as in the nation are not strong enough for protecting
the company organization (McKinley, 2017). The theft and use of APIs of Oracle by Google was
one of the lawsuits that continued for several years.

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Porter’s Five Forces
(Source: Zahedi, Shahin & Babar, 2016)
Suppliers Power - The powers of supplier is low for the fact that Oracle do not have the
threats of forward integrations. It mostly makes software, but can produce finished products if
they are demanded. The company have sufficient money and the resources to easily acquire the
production plants to manufacture hardware products (Phadermrod, Crowder & Wills, 2019).
Their suppliers does not controls scarce resources since databases are commodities. All these
limits the threats of the suppliers.
Buyers’ Power- Large firms are mainly served by Oracle that indicates that the buyers
are fairly significant due to their purchases which represent major portions of the sales. Most of
the products are customized as per the needs of the customers which signifies that it is difficult to
compare prices of Oracle with other companies of same industry (Ranjan, Jha & Pal, 2016).

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Oracle usually provides expensive products and services. All these makes the buyers less
powerful.
Threat of New Entrants - The threats of new entrants are both high and low for Oracle
depending on the particular products. The threats are low in the context of databases. The threats
are high for Oracle as the initial expenses have to be in billions to compete with Oracle. The
new entrants will be need huge amount of manpower and efforts to form wide-ranging integrated
products in accordance the standards of the industry. The new entrants in order to compete with
Oracle have to considerably invest on marketing and sales that can range in billion dollars (Song,
Jung, Oh & Choi, 2015). A latest research has predicted that it will almost cost more than $119
million only to enter the US market and compete with Oracle. Copyrights and patents can
hamper the new entrants from using the technological developments effectively.
When the matter is of enterprise software, Oracle do not have much market shares and
has only 13% market share in enterprise software. The technology industry is extremely
competitive since it has huge potential for vast profit and thus all the companies want to be a part
of this market. Oracle is gaining the market shares slowly as it is acquiring more IT firms.
However, it is extremely easy for a new entrant to steal the market shares and become famous for
themselves in the field of enterprise software, if they focus only on enterprise software.
Threats of Substitutes - Threats of a firm to switch to a competitor from Oracle is low
until the company is very disappointed. It is due to the fact that switching to a new firm has
involves huge price. Not only the buying costs of products are expensive, but also the execution
time is very expensive. Total costs of ownership for Oracle for three years is 48% less than SAP
(Taghavifard, Amoozad Mahdiraji, Alibakhshi, Zavadskas & Bausys, 2018). Moreover, only 81
labor hours are needed to execute Oracle in comparison to 372 labor hours of SAP.
Threats of Rivalry - Oracle has constantly improved its products and purchase new firms
to maintain its market shares. Though the database of Oracle is the number one product, the
giants of the same industry such as SAP and IBM are constantly innovating and improving their
products to overtake Oracle and steal the market shares. SAP is a threat in the field of enterprise
software. SAP has entered US market much before Oracle and became famous for its ERP.

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Currently, SAP is leading the market of ERP products and hold a benefit in the field
because of its early access to the market. SAP would carry on as a threat to revenues of Oracle in
this market. In hardware industry, well-known firms such as IBM and HP already have strong
footing and will carry on to stand in the path of development of Oracle. The rivals of Oracle in
the main industry have similar financial capability to make heavy investment in technology and
marketing. It makes more difficult for Oracle to steal the market shares, but it have to be always
beware of their moves. Oracle need to be active and carry on to make improvements for their
clients.
Suggestions
 It is strongly recommended to Oracle that it need to design more
innovative products to stand in the competitive market of IT sector. The electronic and IT
products are highly competitive in the market. More innovative software and databases
have to be considered by the firm. There are different factors which affect the future
strategy of the company. Those factors are the core values and they are compared with
the objectives of the strategic planning. These core objectives of Oracle must be
prioritized and the core values have to be followed with due respect to the core objectives
of the companies
 Oracle have continued to maintain high ethics to develop different types of
software and databases. It have always supported diversified culture of the staffs. This
firm has also created a policy of inclusion and diversity both for its employees and
clients. Oracle has always attempted to sustain the environment. So, it need to develop
software that could not damage the environment. Moreover, it can be specified that the
organizational strategy of Oracle in future need to be based on the strategic planning of
the firm
Conclusion
The paper had evaluated the strategic management of Oracle Inc. It had provided
overview, history and past performances of the company. It had described the business and
management strategy of Oracle. Different types of strategic tools had been used to analyze the
strategic challenges of the company. SWOT analysis, PESTLE analysis and Porter’s Five Forces
had been utilized as strategic tools to analyze the strategic challenges of Oracle. There are

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various factors which have affected the strategic planning of the firm. Some suggestions has also
been provided to the US based computer technology and software company. Stiff competition
from top IT companies, strategy limited to thinking and innovation, several controversies and
court cases and less control on international operations than the domestic operations, integration
problems due to acquisitions, recessions and market fluctuations and increasing competition are
some of challenges of Oracle.

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