GENERAL
Intuit Inc. is a leading provider of business and financial management solutions for small businesses, accounting professionals and consumers. Our
flagship products and services, including QuickBooks, TurboTax, ProSeries, Lacerte and Quicken, simplify small business management, tax preparation and filing, and personal finance. Founded in 1983 and headquartered in Mountain View, California, we had revenue of $1.9 billion in fiscal 2004. We
have approximately 6,700 employees in offices across the United States and internationally in Canada, the United Kingdom and several other locations.
PRODUCTS AND SERVICES
Intuit's mission is to transform the way people run their businesses and manage their financial lives. Our goal is to create solutions so profound and simple that customers wouldn't dream of going back to their old ways of keeping their books, managing their businesses, preparing their or their clients' taxes, or organizing their personal finances.
We have three business portfolios: Small Business, Tax and Other. These three portfolios contain a total of five business segments, as discussed below.
Small Business. Our Small Business portfolio consists of two segments, QuickBooks-Related and Intuit-Branded Small Business.
- QuickBooks-Related includes our QuickBooks accounting and business management software as well as the products and services that people add on to QuickBooks. These include financial supplies, Do-It-Yourself Payroll, technical support and merchant services.
- Intuit-Branded Small Business products and services are designed primarily for small businesses but do not carry the QuickBooks brand or require the use of QuickBooks. Intuit-Branded Small Business offerings include outsourced payroll, information technology management solutions and solutions designed to meet the specialized needs of businesses in four industries.
Tax. Our Tax portfolio consists of two segments, Consumer Tax and Professional Tax.
- Consumer Tax includes our TurboTax consumer tax return preparation products and services.
- Professional Tax includes our ProSeries and Lacerte professional tax products and services.
Other. Our Other portfolio contains one business segment, Other Businesses. This segment consists primarily of our Quicken personal finance products and services and our Canadian business.
Our primary products and services are sold mainly in the United States. Classes of similar products or services that accounted for 10% or more of total net revenue in fiscal 2002, 2003 and 2004 were as follows:
| |
FISCAL |
 |
| |
2002 |
2003 |
2004 |
|
| QuickBooks |
|
15 |
% |
|
15 |
% |
|
15 |
% |
 |
| Consumer Tax products and services |
|
27 |
% |
|
26 |
% |
|
26 |
% |
|
| Professional Tax products and services |
|
17 |
% |
|
15 |
% |
|
13 |
% |
|
MARKETS
Our primary target markets are small businesses with up to 20 employees, professional accountants and individuals. In addition, we have acquired
several companies that offer business management solutions to small and medium-sized businesses. These include Innovative Merchant Solutions, Intuit
Information Technology Solutions, Intuit Distribution Management Solutions, Intuit Real Estate Solutions, Intuit Construction Business Solutions and Intuit
Public Sector Solutions.
Many of the markets in which we compete are characterized by rapidly shifting customer demands, continuous technological change and frequent new
product introductions by competitors. Market and industry changes can quickly render existing products and services obsolete, so our success depends
on our ability to respond rapidly to these changes with new business models, updated competitive strategies, new or enhanced products and services,
alternative distribution methods and other changes to the way we do business.
MARKETING PROGRAMS
We use a variety of marketing programs to generate software orders, stimulate demand and generally maintain and increase customer awareness of our
products. These programs include mail, e-mail and telephone solicitations, direct-response newspaper and magazine advertising, and television and radio
advertising. We also use workflow-integrated in-product messaging in several of our software products to market other related products and services,
including third-party products and services. Customers who respond to direct marketing campaigns and in-product messaging purchase products and
services from us by telephone or through our Web sites.
DISTRIBUTION CHANNELS
Direct Sales Channel. We sell many of our products and services directly to our customers through our Web sites, call centers and direct sales force.
Over the past three years, we have introduced more sophisticated, higher-priced software products and business management solutions. These include
broader outsourced payroll offerings and business solutions for information technology managers and businesses in selected industries. As a result, we
have been enhancing our direct sales capabilities to support revenue growth in these areas.
Retail Distribution Channel. We market our QuickBooks, TurboTax and Quicken desktop software at retail in North America primarily through office
supply superstores, warehouse clubs, consumer electronics retailers, food and drug retailers, catalogers and general mass merchandisers. In international
markets, we also rely on distributors, value-added resellers and other third parties, who sell products into the retail channel.
We continue to benefit from strong relationships with a number of major North American retailers, which allows us to minimize our dependence on any
specific retailer. We deliver products to larger retailers through a combination of direct to store deliveries and shipments to central warehouse locations.
We also ship products for many of our smaller retail customers through distributors. We continue to aggressively manage our inventory to optimize
in-stock presence and ensure good product placement within retail stores. In response to current retail trends, we are also placing a greater proportion of
inventory with retailers on a consignment basis.
OEM Channel. We have relationships with a number of personal computer "original equipment manufacturers," or OEMs, including Apple Computer Inc.,
Dell Inc. and Hewlett-Packard. Although aggregate revenue from our OEM channel is much less significant than revenue from our other distribution
channels, OEM relationships help us to generate sales of our core desktop software products in two ways. First, certain OEMs "pre-bundle" new-user
versions of certain desktop software products on the computer systems that the OEMs sell to their customers. These pre-bundled OEM sales are a good
source of new customers and future revenues. The second source of revenue from the OEM channel is "after-market" programs, in which customers who
are purchasing computers can select and purchase software products at the same time.
Third-Party "Value-Added" Distribution Arrangements. We supplement our direct sales capabilities and our retail and OEM distribution relationships
with third-party distribution arrangements. We believe these relationships will enhance the growth opportunities for our higher-end product and
service offerings by allowing us to benefit from the value-added marketing and sales expertise of these third parties. We currently have arrangements with
third parties who have specialized expertise in marketing, selling and providing post-sale implementation services for Innovative Merchant Solutions and
some of our Intuit-Branded Small Business solutions. During fiscal 2005 and beyond, we expect to continue to optimize and support our network of
third-party relationships.
|
|
|
