The rise and the fall of the Baan Company

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The rise and the fall of the Baan Company

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Abstract

This case study focuses on the rise and fall of Baan Company which developed in the market of software technology. Baan was one of the leaders of the market in the beginning, but it crashed in 2000. Initially, Baan was especially strong with its manufacturing module, SAP with its finance module and PeopleSoft with its HRM module. Later, these differences became smaller because each company was in a continuing process of product improvement, imitation and innovation. In any case, Baan was the most visionary of the ERP vendors. It then (in the 80ss) positioned itself as a software manufacturer and gave up a part of the service sector. Contrary to the others ERP vendors, it chose to grow on the licenses market which was more volatile than the services market but the profit margins were much higher.

Pestel framework
1. Political
2. Economic
3. Sociocultural
4. Technological
5. Environmental
6. Legal
Five forces framework
1. The threat of entry
2. Threat of substitutes
3. Buyer power
4. Supplier power
5. Competitive rivalry
Key drivers of change
Key success factors
Notions of the dynamics of competition
Swot
Layers of the business environment
The life-cycle model
Cycles of competition
Market segmentation
Strategic gap
Strategic capability and competitive advantage of Baan Company
1. Threshold capabilities
2. Capabilities for competitive advantage
3. Cost Efficiency
4. The experience curve
5. Capabilities for sustainable advantage
6. Dynamic capabilities
7. Organisational knowledge
The value chain of Baan Company
The value network of Baan Company
The activity map of Baan's company
The benchmarking
Expectations and purposes
The governance chain
Corporate governance reforms
Relationships with customers and clients
Stakeholder mapping
Sources and indicators of power
Cultural context
The cultural web
Communicating organisational purposes

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[...] ➢ Constantly decreasing of the time of life of software: companies need to invest a lot of money in R&D. ➢ The possible crisis in the IT field Layers of the business environment • The organization : The Baan company • Competitors : Oracle, PeopleSoft, SAP • Industry : Software • The macroenvironment : see PESTEL The life-cycle model Development At the end of 1989, Baan started distributing the world's first ERP Growth The demand of ERP systems grew very strongly Shakeout Mid 1990s, market for ERP packages was very turbulent. [...]

[...] In any case, Baan was the most visionary of the ERP vendors. Then (in the 80's) positioned itself as a software manufacturer and gave up a little the services. Contrary to the others ERP vendors, it chose to grow on the licenses market which was more volatile than the services market but the profit margins were much higher. For example was of Baan's revenue in 1998 whereas it was 35% for SAP and 25% for Oracle. In the end, Baan's performances decreased until the company was taken over by Invensys in 2000. [...]

[...] In 1995, they conducted an IPO, giving new stakeholders' power. Paul Baan tried to build a strong network of partners and alliances giving them somehow the power to interfere in Baan decisions. CEO's of Baan changed. After the crash, it was bought by another company. Relationships with customers and clients Baan tried to earn its clients' loyalty and, in order to do so, they could not afford to be neglecting .They had to provide them with the best services and quality of software possible. [...]

[...] ➢ Cultural context: The context here is competition and free market. It entails quick and effectives decisions. ➢ Organizational purposes: The mission of Baan Company was to stay highly competitive and to fulfill stakeholder's expectations. The objectives were to keep to their ethics and provide their clients the best services and software in order to gain their loyalty. The governance chain Here ownership and management control were going hand in hand as long as the Baan brothers were at the top management. The text doesn't provide us with much information. [...]

[...] Baan did not really pay attention to the Services branch and did not really diversify its activities, furthermore the crisis came really fast and Baan could not change its strategy overnight. [...]

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