Sage Group plc SWOT and PESTLE Analysis

Strength

1. Market leader with a strong portfolio of world-class and innovative products: The Sage Group is known as a global market leader and technology-provider for the SMEs (small and medium businesses). Sage delivers greater customer value through innovation. Some of the innovative products include Sage Accounting, Sage Intacct, Service Fabric and Pegg. Sage Intacct is powered by the advanced technologies, artificial intelligence and machine learning, including AI-powered timesheets, contract renewal forecasting and transaction anomaly detection. Service Fabric is another example of Sage Group’s portfolio of innovative products, which acts as the architectural ‘glue’ of Sage Business Cloud. Also, the world’s first accounting chatbot, Pegg has been continuously evolving over the years, from a social-media based bot in its infancy to providing robust support for Sage products.

2. Robust digital & direct sales presence, with a global network of partners: Sage is a global market leader with unified, technical solutions for the small and medium businesses, as it upholds the ambition to become a great SaaS company. The company further strengthens its customer reach, with the help of its strong digital and direct sales presence, that is largely supported by a global network of partners. The network comprises of 100,000 accountants who provide advice and sell solutions to the company, 40,000 value-added resellers who are involved in the selling and implementing Sage solutions, and 1,000 independent software vendors who add further functionalities as well as vertical customisation to the Sage solutions. Moreover, a number of strategic alliances with some of the biggest technological companies are also included in this global network.

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Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Initiatives to reduce carbon footprints across business: With the awareness about reducing the harmful environmental impacts of business operations rising by the day, companies all over the world are trying their best to adopt various initiatives to make themselves green. Over the years, the Sage Group has also tried to make concerted efforts in order to reduce its carbon footprints across businesses through different initiatives and programmes. In the financial reporting year of 2019, the group projected significant progress including the initiative of increasing the use of bioethanol as fuel for business travel. Moreover, considering business travel contribute to 50.1% of the company’s total CO2 emissions, Sage Group has taken strides to encourage sustainable travel practices by reducing business travel.

2. Investments in multiple energy reduction opportunities like low energy consuming technologies: With surge in the middle-class segment of the ever-growing population, the greatest environmental impact is originating from overconsumption of resources, most of which are exhaustible. To deal with this problem, companies are either adopting methodologies to lower their energy consumption or are turning towards renewable sourcing methods. Some of the initiatives adopted by the Sage Group include investments in newer technologies including laptops and workstations that consume comparatively lower energy, taking full advantage of energy reduction opportunities that include chiller improvements and building management system technologies, and moving corporate buildings to more energy efficient locations. Moreover, the group has shifted to renewable sourcing contracts with suppliers, for its operations in countries like Brazil, India and Portugal.