MGT731 Corporate Entrepreneurship and Innovation: Atlassian

This case study examines Atlassian, an Australian software company, and its innovative approaches to software development, content management, and project management. Founded in 2001, Atlassian adopted a unique strategy of investing in research and development rather than sales and marketing, relying on customer-driven promotion. The report highlights Atlassian's business strategies, including its customer-centric approach, employee-friendly workplace, and societal contributions. It also addresses challenges such as scaling issues, competition, human resource management, and marketing mix complexities. The study proposes solutions like enhancing marketing strategies, improving scaling through JIRA data centers, refining product and pricing strategies, and reinforcing human resource management practices. Recommendations include investing in sales and marketing, protecting work culture, and diversifying product offerings to ensure sustained competitive advantage. Desklib offers a variety of resources for students, including similar case studies and solved assignments.

Running head: CORPORATE ENTREPRENEURSHIP AND INNOVATION
CORPORATE ENTREPRENEURSHIP AND INNOVATION
Name of the Student
Name of the University
Author Note

1CORPORATE ENTREPRENEURSHIP AND INNOVATION
Executive Summary:
The purpose of this report is to discuss on the innovative approaches of a software company
and the methods adopted by the company to develop distinguishing factors in the market. The
report will also stress on the issues pertaining to business strategies of the software company
Atlassian. The Australian-based company Atlassian specialize in the products for software
development and content marketing. The organizational strategies will be highlighted to
understand the business approach of the company and the factors, which can affect their long-
term success plan. It can be concluded by having a clear view of the issues and challenges
faced by the company or will occur in the future and the approaches by which it can be
addressed.

2CORPORATE ENTREPRENEURSHIP AND INNOVATION
Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Overview of the company-.....................................................................................................3
Grounds consisting issues and challenges-............................................................................5
Issues of Atlassian-................................................................................................................6
Solutions and approaches for tackling issues-.......................................................................8
Recommendations:.....................................................................................................................9
Conclusion:................................................................................................................................9

3CORPORATE ENTREPRENEURSHIP AND INNOVATION
Introduction:
The process of starting new businesses by introducing innovative products and
services from a parent organization for generating growth in revenue. The process involves
the action and skills of entrepreneurship. The purpose of this paper is to understand the
entrepreneurial actions adopted by an organization for offering innovative products to the
consumers and the issues pertaining to the business strategy. In this report, the company
selected for assessing the innovative strategies and approach in developing the business is a
software company Atlassian based in Australia. Atlassian projects a very different business
approach, as it believes in investing in innovating products and services by research and
development rather than on sales and marketing (Atlassian.com, 2019). The report will stress
on an overview of the company, the business strategies, issues pertaining to the development
strategies and the ground at which the company is experiencing /may experience the
concerns. The report will be concluded by suggesting alternative approaches which can
present a clear vision of the software company Atlassian.
Discussion:
Overview of the company-
The software company Atlassian is based in Australia, which specializes in products
for projects managers, content management as well as for software development. Mike
Cannon-Brookes and Scott Farquhar registered the company in the year 2001 and started
their operation by introducing JIRA 1.0 (Atlassian.com, 2019). Their business strategy was
unique as they decided to invest in creating a value product by spending on research and
development of the software and services rather than investing in the sales and promotion.
Mike Cannon-Brookes and Scott Farquhar believed in ‘no sales force’ approach, by
developing a quality innovative product, which will be offered at a low/reasonable price and

4CORPORATE ENTREPRENEURSHIP AND INNOVATION
will be automated for high volume sales. Atlassian considers their customers to be the
segment who can market and promote their products.
The distribution model of Atlassian is given below:
Fig.1: Distribution Model of Atlassian
(Source: Atlassian.com, 2019)
Atlassian provide a happy and motivating workplace where employees are treated as
an important asset. It provide schemes for paid parental leave, paid holiday offers, celebration
party for the new joiners and appraisal policies involving awards. They have introduced a
collaboration platform where employees can interact, share their experiences and appreciated
for their achievements (Mahroum, 2016). Their operation is based on customer centric
approach, which focusses on presenting quality product (Sauvola et al., 2015). The software
company is not only involved in creating business but it gives back to the society in which it
Innovative
products
Reasonable
price
Pursue
volume
Sell online
Easy and
Free trials

5CORPORATE ENTREPRENEURSHIP AND INNOVATION
is operating by contributing 1 percent of equity and profit for the education of the children in
growing and underdeveloped counties (Atlassian.com, 2019). Although, they are successful
in their strategies and approach for attracting customers and offering a quality product but the
company Atlassian have faced and are facing few challenges concerning their growth and
development in the software industry (Wall & Spinuzzi, 2018).
Grounds consisting issues and challenges-
Atlassian as an enterprise have faced challenges in the past and are still reflecting few
issues/challenges pertaining to the strategical approach of the business. The fields of concern
are mentioned below:
 Technological infrastructure- The increasing rate of customer demand required a
better plan on scaling of JIRA, which was not being efficient by the data centre
present at that time. The data centre was not able to develop and maintain the
application of JIRA (Carlson, 2017).
 Industrial challenges- Atlassian operates in software industry where the presence of
competition is very high. The threat of new entrants is considered as medium. Even
though the new entrants will not be able to establish a grip for its product offerings
easily but at the same time, the investment costs involved in starting a business is
comparatively low in regards with other industries (Norman & Venter, 2016). The
switching cost of the buyer was high but with the introduction of various offerings,
the scenario has changed, thereby increasing the buyer power (Moon & Choi, 2016).
Moreover, the industry also experiences a high rate of bargaining power of suppliers
or in this case, employees as the presence of competition in the market have
influenced the power of the employees in regards with the negotiation of salary
(Cocco, Concas & Marchesi, 2016).

6CORPORATE ENTREPRENEURSHIP AND INNOVATION
 Human Resource Management- Rapid business growth by doubling the employee
strength and disruptive innovation technique in a short period indicates weakening of
work culture. “As of June 30, 2016, 2015 and 2014 we had 1,760, 1,259 and 769
employees, respectively” stated in the annual report of 2016 (Atlassian Annual
Report 2016, 2019).
 Marketing Mix- Their product diversification and offerings are bit complex in terms
of customer knowledge and segmentation. The focus on their two major products
may act as a challenge with the increasing number of entrants with the same product
features as well as competitive edge.
 Integrated Marketing Communication- It involves components such as advertising,
direct marketing, internet marketing and publicity. Atlassian only concentrate on
product development. Atlassian only believes in marketing through its customers as
they assume the word of mouth technique is best for promoting their self-service
quality product (Atlassian.com, 2019).
Issues of Atlassian-
The main issues or challenges faced by Atlassian are as follows:
 One of the main issues of Atlassian is the scaling of the organization, which means
adding or removing nodes to a particular system. It may involve adding data points
for a software and it can mean adding or removing nodes to a system of multiple web
servers from a single server. The increasing demand from the customers and
expansion strategies gets affected from the process of scaling which is complex even
for a company like Atlassian. Rapidly increasing customer/subscriber base made
adding nodes to the system’s application difficult for the company. Moreover, the
complexity in the process of scaling and inability to handle the increasing demand can
deteriorate the quality of the product, which is the most invested field of the company.

7CORPORATE ENTREPRENEURSHIP AND INNOVATION
 The second issue can be the threat of focussing majorly on JIRA and Confluence
(Atlassian Corporation Plc., 2016, p, 13). Competition in these two offerings will
negatively affect the revenue inflow of the company. Two third of the revenue of
Atlassian comes from these two products (Fucci et al., 2018). Although, the work
culture and business approach of Atlassian is very different form its competitors but
the strategy of subscription-based software products is becoming a standard for all
other software providers, thereby affecting the competitive edge of Atlassian (Rajput,
2016).
 Another issue can be their minimal focus as well as investment in the integrated
marketing promotional tools. Product innovation being the only competitive edge can
be risky for the company as soliciting customers by using different platforms is also
important. The core strategy of self-service in Atlassian and the assumption that
customer plays a role in promoting the product through word of mouth cannot be
always true (Chen et al., 2015). There are wide ranges of customers who prefer
responding to a traditional form of sales setup. Software industry is highly
competitive where a company needs to differentiate itself in different fields to be able
to sustain in the market and to capture the share of mind of customers (Li, 2015).
 Eroding work culture with the swift growth in the market. “As of June 30, 2016,
2015 and 2014 we had 1,760, 1,259 and 769 employees, respectively” a statement in
the annual report of 2016 (Atlassian Annual Report 2016, 2019).
 The durability of Atlassian’s resources is low as the value of the resources are
captured by various parties such as Atlassian itself for internal business activities
which needs technological/software support, by the competitor for relating their
products with the value of Atlassian’s resources to increase the customer base.
Moreover, with the increasing industry competition the availability of software

8CORPORATE ENTREPRENEURSHIP AND INNOVATION
offerings are increasing in a wide ranges of prices, which decreases the switching
cost, thereby increasing the buyer bargaining power.
 The age of the founders of the company can be a threat, as they do not have
experience in business prior to this company, which can be a hindrance in the
expansion plans of the business in this competitive industry.
Solutions and approaches for tackling issues-
 Although, the company Atlassian is known for its attractive work culture, considering
employees as an asset but to tackle the high bargaining power of the employees
(suppliers), the company can introduce an approach for providing training on software
development free of cost by the terms of getting associated with the company for a
certain period. This can help in acquiring skilled suppliers for improving the product
offerings of the company.
 The company should improve its marketing strategies by allocating the investments
into distinct categories like in research and development, sales activities and
promotional tools. Along with selling its product online, the company can adopt one
of the tool of Integrated Marketing Communication, internet marketing (Riasanow,
Galic & Böhm, 2017). It will provide a definite rate of customer conversion ratio,
which was not possible through the assumption of word of mouth advertising
(Rahman et al., 2015).
 Introduction of JIRA data centre for improving scaling of system but this approach
will require a system of shared file source for proper information regarding profile
(Filion et al., 2017).
 Improving the product strategy and pricing strategy by developing distinct offerings
of the software so that customers/businesses can pay for the feature they need.

9CORPORATE ENTREPRENEURSHIP AND INNOVATION
Diversification of the products might be needed in the future as even if the work
culture cannot be imitated, the products can be (Kazanjian, Drazin & Glynn, 2017).
 Investment in the approach of Human Resources Management for maintaining one of
its competitive advantages of having a good working culture.
 Incorporating leadership decisions for identification of the future strategy for growth
and expansion. This step is very crucial for acquiring a clear understanding of the
future position of the company (Schonell, 2017).
Recommendations:
The recommendation for the software company Atlassian can be the investment in
sales and marketing approaches to have a complete form of competitive advantage structure
in the market. Another can be incorporating better human resource techniques for protecting
the eroding work culture, which is one of the core competencies of the company that cannot
be replicated. The promotional strategies needs to be incorporated to let the customer
understand the distinct features of the product offerings of Atlassian. Diversification can be
the future step of the company because of the product features can be easily replicated.
Expansion of the business is one of the main factor, which can help in the development of the
company. Leadership strategies in expansion can help the company to achieve the annual
goal acquiring skilled employees form every part of the world and to offer everywhere in the
world as stated “We aim to have every knowledge worker, in every team, in every company
use an Atlassian product every day” (Atlassian.com, 2019).
Conclusion:
Therefore, the report can be concluded by stating the innovations involved in the
entrepreneurial activities by the software company Atlassian and the issues pertaining to the
business strategies. The issues involved focus of a single segment of developing competitive

10CORPORATE ENTREPRENEURSHIP AND INNOVATION
advantage, dependency on two of his major products rather than the plan for diversification,
completely involving in an unconventional method of running a business and complexity in
implementing the process of scaling which can deteriorate the product quality, which is the
major field of investment for the company. Another major issue detected in this report was
not having a clear vision as well as expansion plan for the future. The recommendation like
investing in sales and promotional activities to have a clear rate of conversion, introduction of
human resource activities for preserving the core competency, which cannot be imitated.
Moreover, the company owners Mike Cannon-Brookes and Scott Farquhar needs to project
leadership quality in understanding the future position of the company by forming a clear
vision.

11CORPORATE ENTREPRENEURSHIP AND INNOVATION
References:
Atlassian Annual Report 2016. (2019). Atlassian Annual Report 2016 [Ebook]. Retrieved
from https://s2.q4cdn.com/141359120/files/doc_financials/2016/Q4/Atlassian-
FY2016-Annual-Report.pdf
Atlassian.com. (2019). Atlassian | Software Development and Collaboration Tools. [online]
Retrieved from https://www.atlassian.com/
Carlson, R. M. (2017). Atlassian: Analysis and strategic recommendation.
Chen, Y., Wang, Y., Nevo, S., Benitez-Amado, J., & Kou, G. (2015). IT capabilities and
product innovation performance: The roles of corporate entrepreneurship and
competitive intensity. Information & Management, 52(6), 643-657.
Cocco, L., Concas, G., & Marchesi, M. (2016). Simulation of the competition among
traditional and on-demand software vendors. Simulation, 92(1), 33-45.
Filion, L., Daviot, N., Le Bel, J. P., & Gagnon, M. (2017, April). Using Atlassian tools for
efficient requirements management: An industrial case study. In 2017 Annual IEEE
International Systems Conference (SysCon) (pp. 1-6). IEEE.
Fucci, D., Palomares, C., Franch, X., Costal, D., Raatikainen, M., Stettinger, M., ... &
Schenner, G. (2018). Needs and Challenges for a Platform to Support Large-scale
Requirements Engineering. A Multiple Case Study. arXiv preprint arXiv:1808.02284.
Kazanjian, R. K., Drazin, R., & Glynn, M. A. (2017). Implementing strategies for corporate
entrepreneurship: a knowledge‐based perspective. Strategic entrepreneurship:
Creating a new mindset, 173-199.