Atlassian is a software organization that was formed by Mike Cannon-Brookes and Scott Farquhar and launched in 2002. This Company has its specifics in productivity for business tools. It falls under the tech organizations. It has more than 51000 organizations as clients. These clients use their software products. Also, it has subscribed 5 million monthly members. These company programs include; JIRA, Bitbucket, Hip Chat, and Confluence (Mahroum 2016). This company has applied various strategies that have seen the organization do well in the competitive market and realized massive profits in a short period.
Atlassian is one of the collaboration and development Tech Company listed among the most successful companies in Australia. It achieved over $ 6.7 billion in the last financial year. The growth potential is very high especially with the strategies put across by the two owners. This organization finances its expansion globally by using the cash flow in the company rather than having investors. The two owners focus more on creativity and innovations for the future growth.
This technical analysis aims at finding out the factors affecting Atlassian tech industry, its profitability and the strategies that are put across. According to Cortellessa, Di Marco and Inverardi (2011), this examining tool, involves examining market, growth and economic factors affecting the industry.
There are changes which are always taking place in the tech market, such as customer demands. These changes impacted on prices, services, and quality where customers demanded the best services. This lead to interruptions in software and the models of business as well as delivery services. Tech companies such as HP, e-Bay, and IBM faced competition, and they were all looking for better models to carry out their businesses. Atlassian came up with a unique strategy, which enabled it to have an advantage over the others. Business maintenance is through the continuous subscription fees by active members rather than sales from software. It enabled this organization to be ahead in the market. The performance and the global growth of Atlassian were mainly due to their strategy of word of mouth marketing. This approach enabled the customers to sell their products to others; this created traffic by customers on the organization’s website leading to massive profits. According to the latest gains made in the last financial year, Atlassian is likely to make a positive growth trend in the future, with the increased innovations and creativity under way by the two co-founders.
According to Warner (2011), Porters five forces is a crucial analysis tool, in determining whether a business will do well among those already present in the market. The five forces include:
1. The competitive rivalry
This force explores the current state of competition in the market. This involves finding out who are the competitors and what are their strengths in the industry. In this case, when Atlassian was being founded, HP, I BM, e-bay among others were the competitors in the tech industry.
2. The bargaining power of suppliers
It examines, the suppliers available in the market, their power intensity in raising prices. Business always does well when the number of suppliers is substantial.
3. The bargaining power of customers
This force goes into details on the customers’ power and how they affect the services and quality of products. For example, Atlassian’s market has had to face rapid changes by customers who raise their demands on services, quality products, and the prices.
4. The threat of new entrants
These forces explore the easiness of penetrating the market by other competitors. It can either be difficult or easy. If it is easy for others to come in, this places a risk on the market. In the case of Atlassian, due to the large starting capital needed, the market has had few new entrants.
5. The threat of substitutes
This fully looks at how consumers may switch from one business product to that of others. This may be caused by changes in the quality of products, mode of delivery or the fluctuation in prices. In the case of Atlassian, the co-founders have realized the need to keep their customers happy.
In formulating strategies, organizations must consider strategies that target the market by looking into the external environment. Macro environment involves those external factors that affect the performance of business. In an analysis of macro environment regarding factors that influence business, PESTLE analysis tool is used, (Del Marmol 2015). The PESTLE (political, economic, social-cultural, technological, legal and environmental) factors include;
The Political and Legal factors
Organizations are usually influenced by market and legal regulations, levies on tax and other obligations. These are the political and legal factors. Failure for business to conform to them may lead to imposed fines as well as denial of operating licenses.
The economic factors
The Economic environment of every business affects its performance. Fiscal policy and different interest rates are imposed in business both nationally and globally. The growth of the economy in a nation affects the way environment of the firm behaves as well as the inflation rates. For example, Atlassian Company does well because the economy of Sydney is stable and favors the business positively.
The socio-cultural factors
These factors include what makes up the society in which the organization is situated. For example, the level of literacy, age, demographics, lifestyles, population and the existence of social classes. These factors determine the type of customers that the organization will have and their behavior. Sydney is known to have a high level of educated people, one of the reasons why this software company does well, in selling their products because the target market favors them.
The Technological factors
New development in the industrial markets affects business. Organizations are affected by changes in the mobile technology, new developments, and internet changes. To do well, businesses need to find strategies that help to keep up to date with new tech developments.
These are factors like natural disasters. This only affects a small number of businesses. It also includes the scarcity of materials and pollution. Some marketers are concerned with these factors.
When formulating strategies, the organization's management should consider policies on their competitors. Competitor analysis is a crucial aspect of strategic planning. Competitor analysis is usually composed of two important steps. The first is to determine who are the company’s competitors and their strengths. The second phase is to be able to map the behavior of the competitors identified, (Fleisher and Bensoussan 2015). Competitor analysis aims at having a proper understanding of the current competitors in the market, knowing the opponent's reactions to the activities of the company and having the know-how of the strategies outlined by the competitors. For example, Atlassian Company managed to be ahead of its competitors by identifying them. These were eBay, Hewlett- Packard, Symantec, and IBM. Atlassian strategized on doing things differently from them, such as using the word of mouth marketing to influence customers.
According to John and Roger (2012), competitor analysis is a gateway to a good marketing plan. This analysis helps in forming strategies that contribute to identifying the available opportunities and threats to the firm. The there is a structure that was identified by Porter (2014), that is used in analyzing competition in a company. This structure is made up of four major factors which include;
Strategies by competitors
This involves identifying the competitors’ strategy. This is achieved by learning about what the opponent says especially from their annual reports, press releases and statements made by the opponents’ manager. To determine if what is said is implemented, there is need to identify the actions taken in regards to what was said. This can be analyzed from the projects which their business is involved in, the investments and the partnerships they engage. This helps in understanding the current strategies of the competitor.
The resourcesof the opponent.
SWOT examination is used in analyzing the strengths and weaknesses of the competitors. This enables to learn the capabilities of the adversary.
Assumptions by competitors
In analyzing competitors, it is important to learn their assumptions about their organization. The way they perceive their company. This helps to determine, their failures and what their manager is doing. This contributes to coming up with strategies outlining what your organization could work improve. For example, Atlassian Company uses cash flow to expand its business rather than using investors’ funds.This strategy was unique among its competitors.
In competition examination, it is crucial to find out on the aims of the competitor in achieving their goals. This information is obtained from analyzing the background of their managers, the management composition, and the risks they faced and how they conquered those risks and their incentives. Learning this objective enables one to know whether the competitors have short or long term goals.
By accurately analyzing this structure, one can predict any move by the opponent hence an organization can come up with strategies that beat the game of their opponents by emerging on top. This approach can only be achieved by being acutely aware of what the competitors do and their plans and working on doing them differently (Porter 2014).
Company corporate strategy
Business often realizes other gaps to be filled outside their original line of industry. These opportunities lead to companies coming together to form corporate strategies. A plan of activities establishes the course of the firm economically to achieve the intended goals. The business strategy aims at diversification to gain competitive advantage. Corporate strategy is when companies come together to grow (Krug, 2009).
Company business strategy
These are the measures put down by a company with the aim of achieving its set goals in the long term. Business strategies involve the process of coming up with plans to implement the mission and vision of the organization. Lastly, it involves allocating resources to help in the implementation process of the objectives. Strategies are set out by the chief executive officer of the company and later approved by the members of the board of directors (Great Britain, 2007). In this case, the two co-founders of Atlassian Company came up with the strategies that have led to the success of the company.
In coming up with strategies, managers should be aware of certain guidelines to produce unique strategies that will achieve results. First, all leaders should come up with strategies that bring money to the organization. The goal of every policy is making the profit. Secondly, every leader should be well conversant with the structure of a company before coming up with any plan. Thirdly, every manager should be aware of the target customers of their products to come up with the right strategies .lastly, all strategies must be unique in their ways, and no strategy should be the same with another from a different organization. (Williams, 2014).
Strategic leadership is evident in Atlassian Company by the two co-founders; Mike Cannon-Brookes and Scott Farquhar. These two leaders have made strategies that have seen the company ahead of the competition and as the most successful in the tech company, making increasing profits each year. Some of the strategies that saw the success of the company include; Atlassian Company does not use sales people to market their products, but it made its products cheap and made it easy for customers to acquire through the web. Here they employed the word of mouth marketing strategy, where customers told others customers of their products. This approach has seen massive traffic on their sales website (Riehle, 2015).
Current position of Atlassian
Currently, Atlassian Company is still on top, as the provider of productivity and collaboration software according to the financial results of the Fiscal year, which ended on 30th June 2016. According to the co-founders, this is the year that Atlassian Company has made the most benefit. The company has realized more revenue of over $400 million as well gaining more net customers. This company emerged as a leader in the Stand Out; this was a great achievement. The co-founders are hoping for even better results in the fiscal year 2017.
Atlassian Company has a great future ahead if it goes on implementing those strategies that have worked best. This company is best known for embracing transparency with all the employees; this has also been part of the success they achieved. This is because of internal client strategy, is the best tool. Employees determine the performance of an organization. An open culture will spearhead the team success. In the next ten years, Atlassian Company can only make a 10X, if it deals with its terms and its schedule as well as maintain their marketing strategy.
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