Question

4. Even though Oracle has the second market share in the database industry (33.7%, behind IBM's 34.1% in 2004), it has chosen to let IBM'DB2 customers use their future products (iFlex, Retek and Fusion). It may seem all the more strange to form this kind of "alliance" with the competitor just ahead of them. Analyze Oracle’s strategy using the theory of lock-in and Compatibility.

Answer 1

• Historically there was no notice period required to terminate your Oracle support contracts. You simply stop paying your bill, and Oracle would stop supporting you. However, in the last year or two Oracle rolled out this new strategy

• The Strategy is simple. On example is rather than sending you a new support contract and waiting for you to send Oracle an invoice to activate the new year’s contract, Oracle will now automatically renew your support unless you opt out 32 days prior to the end. While Oracle claims this change is an effort to avoid customer pain of going without support for a few days, it’s really a money grab to lock you in and increase Oracle’s margins. Oracle thinks there is room for improvement.

• Oracle is implementing this change in phases. It appears, however, they are ramping up their efforts as more and more clients are seeing “auto renew” language in their support contracts. Many customers have no idea it’s in there.

• Oracle’s Retail Price management is a highly configurable, strategy-based pricing solution that suggests and assists with pricing decisions. RPM empowers retailers to automate and streamline pricing strategies across the organization, yielding a more predictable and profitable outcome. It provides decision support through pricing-focused business information to validate and approve new retails and markdown suggestions. This approach results in improved margins and strengthened productivity, all while remaining competitive.

• It supports the creation and execution of manual price changes and clearances. It also provides semi-automated pricing functionality through the execution of a pricing strategy. Pricing strategies allow the retailer to define parameters that will propose retail prices based on competitive information, margin targets, or clearance objectives.