(a) Performance of Oracle in the years 1985 until 31 August 1990.
Assessing the performance of a company over several years a comparison should be made with how effective it had grown in relation to comparable companies. The effect of the economic environment should also be taken into account together with the effect of inside and outside influences of the industry sector. A ratio analysis reflecting the current state of the company in relation to its own history as well as comparable figures would also indicate how Oracle performed.
Economic Environment.
Due to the fact that the technology industry growths faster than the normal economic growth it would be of more value to compare the sales growth and market share of Oracle to its competitors. The expected worldwide market share of Oracle in DBMS reflects that it would most probably have 40% market share in 1991. Its nearest competitor IBM is expected to have 27% and the rest less than 7% market share. This in itself shows that irrespective of the economic environment Oracle had phenomenal growth for a company that only started 12 years before. .
Industrial environment.
Porters five forces model can be used to determine how effectively the company performed in relation to the sector.
Force Application to Sector Application to Oracle.
Threat of new entrants Due to high profits the industry seemed very attractive, branding however could be a big stumbling block.
The high research cost is a major deterrent.
Oracle's had a substantial sales force with access already to distribution channels and major corporations.
Oracle has achieved phenomenal success entering an industry with a high learning curve successfully.
It has also created a brand name and got such a big slice of the market making entrance of other players very difficult. .
Bargaining power of customers Customers had to make buying decisions based on the compatibility of the software towards their own systems and hardware.