Partnering for Competition: External

Partnership

• Internal Partnering•Partnering with Suppliers and Customers•Partnering with Potential Competitors

What is competition?• rivalry for customers or a share of the marketplace• Rivalry in which every seller tries to get what other sellers are seeking

at the same time: sales, profit, and market share by offering the best practicable combination of price, quality, and service (businessdictionary.com)

External Partners• Entities such as customers, suppliers, partners, government regulators

and the society, which interact with an organization and may influence its performance, but are not under its direct control (businessdictionary.com)

Partnership ReadinessCustomers cause many problems with suppliers: inadequate specificationspoor planning sloppy communication changing requirements too much dependence

Skills neededCommunications Joint problem-solving and continuous improvement skills Conflict management Scope and commitment management

External Partnership• based on providing and sharing reciprocal value• develop deep, mutually beneficial relationships over the long-term• the aim is to secure the best possible commercial advantage• Principle: teamwork is better than combat

Supplier Partnership

“A commitment over an extended time to work together to the mutual benefit of both parties, sharing relevant information and the risks and rewards of the

relationship. These relationships require a clear understanding of expectations, open communication

and information exchange, mutual trust and a common direction for the future. “

-- Institute for Supply Management

Why partner with suppliers?•Cost savings•Value•Operating efficiencies

Types of supplier relationships (Kevin Davis, in his book Slow Down, Sell Faster!)

Approved Vendor • having an acceptable price and service, and is called upon by the

company for the “sole purpose of acquiring a specific product or service at a competitive price” • the company is looking for a transaction-driven solution and will turn

to that vendor who has a good reputation for delivering on time and on budget

Types of supplier relationships (Kevin Davis, in his book Slow Down, Sell Faster!)

Valued Consultant• provides not only a product or a service, but also exchanges

information and shares knowledge with the company team members• exhibits forthright interest in helping the company succeed by offering

helpful hints • “perceived as the ‘go-to’ person” • understands the company’s business processes and preferences

Types of supplier relationships (Kevin Davis, in his book Slow Down, Sell Faster!)

Strategic Partner• helps a company “see the future faster, and in a new and different

way.” • continually seeks to add value to every situation [in addition to the products

or services provided by the contract agreement]

• works toward “continuous improvement.”• helps to mutually develop solutions, knows and understands your

business goals, turns their knowledge into action on your behalf

Customer Partnership

An extended relationship between buyers and sellers based on confidence, credibility

and mutual benefit.

-- Council of Supply Chain Management Professionals

Customer-supplier partnership relationships are an important way to obtain valuable

insights and provide mutual opportunity to take action and avoid risk

Customer Partnership• shared journey to create a future for both parties that is better than

either could have developed alone• customer influences every aspect of your business and is the

foundation of your organization's success• more than "putting customers first", or finding mutually satisfactory

solutions to shared problems, or a dedication to excellence in every sale or service encounter

Why Customer Partnership?• help your organization maintain the focus you need to make good

decisions and harness the power and commitment you need to weather volatile times• represents your firm's "capacity to anticipate what customers need

even before they know they need it"

BMWBMW is constantly seeking to discover new technologies and design features to put into future cars. To harvest the insights of creative minds outside the BMW Group, the firm's Virtual Innovation Agency (VIA) is the point of contact for all external innovators who do not as yet have contacts within the firm. VIA makes it easy for car fans to communicate their ideas through its web-site, with additional online discussions that solicit ideas from enthusiasts around the world.

GEInvolve customers, urged Jack Welch. Quality program is aimed at enhancing satisfaction of your customers. Find out what customers want. Involve them to participate in your work, to drive it, to "manage your enterprise."

ACTIVITY/QUIZ• Case study

ASSIGNMENT1. Search for companies with external partners – either online or a

physical store.2. Describe the two entities.3. Describe the benefits with their partnership.Reading Assignment: Read Quality Teamwork sent to your email