SAS Institute Case Analysis
The business model of SAS is such that it in general it offers services coupled with software. Unlike typical firms in the industry it follows an annual software subscription model. Rather than sell its software, SAS leases to its customers - a strategy of immense importance in understanding the company’s relationship to its users. The fact that leases must be renewable annually creates a tremendous emphasis on customer satisfaction and quality in addition to stabilising its revenue. Furthermore, its products are made based on what customers require and its developmental process is almost wholly customer driven. There is also a strong focus on employee satisfaction leading to customer retention and loyalty which SAS …show more content…
Big companies with strong brands such as IBM could follow its stringent recruitment process but would not be able to imitate its unique culture as easily. With most companies providing incentive compensations and stock options, it would not be easy to eliminate that and emphasize non-monetary incentives. This is especially so when public companies would have to go through its board just to provide employee benefits on a similar scale as SAS. It would also be unfeasible to bring outsourced functions back in-house as it would most certainly drive up labour costs and hence be blocked by a hard-nosed board.
5. Extent to which SAS is dependent on continuation of its CEO
With a flat organization structure and having 27 direct reports, Goodnight also appears to be very much on top of all the details of the organization. Conversely, he appears to give his direct reports a clear direction of where SAS Institute is going on the product or technology front, and then let them run their own areas. Even though Goodnight is no longer directly involved with most decisions related to SAS’s work culture, his original vision has spawned a self-perpetuating culture, and “new” decision makers now share his vision, which