In spite of an unabated growth, Salesforce has a major flaw in their growth strategy – its concentration in the Americas and limited overseas expansion. Ignoring markets like Asia Pacific, Salesforce lets immense growth potential slip away.
In recent years, Salesforce has successful expanded into multiple product categories but has not extended to geographical markets. The company remains firmly rooted in North America with very limited operations in Europe, Asia Pacific and Japan. This is underscored by the fact that Salesforce derives nearly three-quarters of its revenues from the Americas
Salesforce’s strategy of focusing almost exclusively on its home ground is in contrast to rivals like Oracle, which is steadily expanding its presence in the emerging markets. Earlier this year, Oracle announced plans to significantly expand its sales team in the Asia Pacific region. The company explicitly stated that a key purpose behind the expansion is to drive the growth and support demand for Oracle Cloud in the region. It also has significant plans for China, which is a major albeit heavily regulated market.
Salesforce may be able to grow at a strong annual clip of over 20% on the basis of product diversification. But for consistent long term growth, it needs to expand its horizon beyond the Americas and establish a foothold in these lucrative overseas markets also.