Download - Suppliers get the global customers they deserve …€¦ · Suppliers get the global customers they deserve... ... and Cadbury’s ... Suppliers get the global customers they deserve

AIM Industry Trade Committee Meeting Brussels, January 27, 2011

Suppliers get the global customers they deserve...So, are you investing to get what your company needs?

© Prof. Christoph Senn, Account Management Center (AMC)

© Prof. Christoph Senn, Account Management Center (AMC), 2010

Contrasting internal views of GAM

“We don’t want to implement a global account management program because that will just allow our multinational customers to get a bigger price discount from us. It’s a lot of effort for little or even negative return.”

“Our global account management program is essential for the retention of our most important multinational customers and it contributes in a major way to growth in both revenues and profits.”

(Source: Yip, 2009)


Agenda

1. The race has already started: Three reasons

2. How to make GAM Programs really work: Insights and examples

3. Implications for own GAM business and industry: Breakout sessions


The race has already started – Three Reasons


The race has already started – Three Reasons

• The increasing importance of global customers

• The quest for customer-centric sales models

• Differing views of global business potential


The increasing importance of global customers

Chocolate producer Barry Callebaut announced closer strategic cooperation with Nestlé, Hershey’s, and Cadbury’s – share price rose 50 percent overnight.

European energy firm declined to introduce a global account program for multinational customers. Leading customer switched to a competitor. Total firm revenues dropped 12 percent, share price fell sharply.

IBM switched to global procurement for public relations. Britain’s Text 100 won the contract; U.S. incumbent agency TSI lost entire revenues and laid off 70 percent of employees.

Ypsomed announced that order volume for insulin pens from it global customer Sanofi-Aventis would be lower than expected. Share price dropped 23 percent in one day and CEO was replaced.

(Source: Capon, & Senn, 2010)


The quest for customer-centric sales models

Country

Product

Customer

Future

Source: AMC, Senn (2006).


Differing views of global business potential

EXAMPLE – Supplier‘s proposal: „We define a strategic business relationship between your company and XYZ Corp. as a long-term commitment dedicated to lowering costs and increasing revenues for both companies“.

(Source: AMC)

EXAMPLE – Customer‘s response:„You should be doing five times the business with us if you got your act together. You work with most of our organization but focus on nothing!“

(Source: AMC)

Supplier Global CustomerReality Gap


The surest way to lose the race is lack of alignment and engagement as measured by degree of collaboration excellence

Supplier Customer

Strategies

Solutions

People

Relationships

Processes

Structures

Knowledge

Systems

Information

Alignment + Engagement = Value Creation

Source: AMC


Our research shows that many companies have only adopted a solid “Global Account Selling" approach ...

Strategies

Solutions

People

Relationships

Processes

Structures

Knowledge

Systems

Information

Source: AMC


... but are lacking a systematic “Global Account Management" view on value creation with their most important customers

Strategies

Solutions

People

Relationships

Processes

Structures

Knowledge

Systems

Information

Source: AMC


Agenda





How to make GAM Programs really work: Insights and examples


How to make GAM Programs really work: Insights and examples

• Acknowledge industry-specific situations

• Pick the right „type“ of GAM program

• Prepare for and overcome internal resistance

• Focus on relationships with „booster“ potential

• Implement with a 10-15 year planning horizon


Acknowledge industry-specific situations

LowLow

High

HighGlobal Integration

The best computer company

The GAM Frontier

The best chemical company

The best bank

LocalAutonomy

A1

A2

B2

B1

C1

C2

(Yip, 2006)


Pick the right „type“ of GAM program

Power balance betweencountries and customers

Coordination GAM

Country-based salesoperation with GAM acting as coordinatoracross countries

Control GAM

Balanced matrix, GAM reports to both countrysales manager andcorporate executive

Separate GAM

Firm structured firstaround global accounts and customer groups; countries secondary

(Sources: Arnold et al., 1999; Yip, 2007)


Prepare for and overcome internal resistance

Cost-to-serve

Margin

Margins reduced byextra volume discounts

Costs increased by new GAM structures and processes

(Arnold, 2002)


Focus on relationships with „booster“ potential

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Collaboration Excellence

Shar

e of

Wal

let

Protect

Improve Boost

Maintain

Optimize

Secure

(Source: AMC Client Project)


Example: Turnaround of a B2B supplier-customer relationship

Red Flags in almost all collaboration areas; but significant growth potential

Collaboration Excellence Cockpit Identified weaknesses1. Strategic level: No direction at all2. Functional level: No integration3. Organizational level: People issue

Implemented consequences"Reset" of relationship supported by top-management and nomination of new, full-time global account manager

ResultsProfit (net margin) +150 K€ p. month;new three-year contract worth 50 M€

(Source: AMC Client Project)


Implement with a 10-15 year planning horizon

Dead-End

Limited

Lim

ited

Deep

Bro

ad

Pilot

Embedded

„Afterburner“

„Rebound“

Springboard

Source: Capon and Senn (2010)

GAMProgramCommitment

GAMProgramScope


Example Applied Materials: GAM is a strategic choice and not just a costly marketing accessory

810

500

1000

1500

2000

3000

4000

5000

6000

7000

8000

9000

MUSD10000

Founded in 1967, low growth period until 1987

1987: Decision to implement GAM (clear focus on fastest growing global customers, no exclusive contracts)

1988 – 2000: Strong growth period

2000 – 2010: Hit by several industry slow-downs, but fast recoveries

Today: Dominates the industry

(Source: www.appliedmaterials.com)

8382 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 0480 05 06 07 08 09 10Year


Example P&G: Focus on global accounts as integral part of corporate strategy

78 bn 54 bn

12 bn

12 bn

100% 68% 16% 16%

• P&G’s largest global customer, Wal-Mart Stores Inc., accounts for 16% of P&G’s consolidated net sales (2008, 2009, 2010)

• P&G‘s top 2-10 global customers represent an estimated additional 16% of total business

• P&G‘s top-ten customers grow between 5-10% faster than rest of business (e.g. +8% in 2008)

(Sources: P&G Annual Reports 2003-2010, all figures in US $)

Suppliers get the global customers they deserve...So, are you investing to get what your company needs?


Agenda





Breakout sessions: Basic idea

To have an intensive, revealing, and entertaining discussion on select topics related to “Global Account Management Implementation”

Groups discuss with each other and share their ideas and insights

Ideas, lessons learned and conclusions begin to link and connect as groups “travel” from one table to the other


Breakout sessions: Guidelines

Three topics, three rounds of conversation (10 min. each)

Every table discusses all three topics

Write, sketch, or draw your main ideas on the tablecloths

One person remains at the table as the “host” – briefly summarizes prior discussions at the start of each round

All other guests can freely move from one table to another (after each round) and act as “ambassadors of meaning” who carry key ideas into new conversations

Final wrap-up of the conversation results by the table hosts and Christoph Senn


Breakout session questions 1 – 3

Question 1: What are the obstacles for implementing cross-functional collaboration with global customers in your firm? How can you overcome those obstacles?

Question 2: What are the key challenges in providing global customers timely access to information? How can GAM leaders deal with those challenges?

Question 3: What are the risk / dangers of demonstrating the value of GAM efforts too aggressively to stakeholders ? What can be done to deal with these risks?


Implementing GAM is a Business Transition, not a Project

„Global account management is the ultimate test for global business. If you are fit for GAM, you are fit for global business.

The launch and implementation of a GAM program is a significant strategic move in a company with a well-entrenched tradition of geographic and/or country line management.

It requires significant investment in resources of a different caliber than those available for business as usual, over an extended period of time, as well as the highest level of management support.

In essence, GAM has two consequences: First, it is a growth driver, but second, it is also a change driver.“

Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric SA, 2008


Global Account Management – Recommended Literature

CAPON, N.; SENN, CH.: Global Customer Management Programs: How To Make Them Really Work, in: California Management Review, Vol. 52, No. 2, Winter 2010, p.32-55.

THOMA, A.; SENN, CH.: Global Account Management. In: Encyclopedia of Business in Today's World. Thousand Oaks, CA : SAGE Publications, 2009.

CAPON, N.; POTTER, D.; SCHINDLER, F.: Managing Global Accounts (2nd ed.), Bronxville, NY: Wessex, 2008.

YIP, G.S.; BINK, A.: Managing Global Customers: An Integrated ApproachOxford: Oxford University Press, 2007.

SENN, CH.; THOMA, A.: Worldly Wise: Attracting and managing customers isn't the same when business goes global, in: The Wall Street Journal, in collaboration with MIT Sloan Management Review, East. Ed., S. R6, 2007.

YIP, G.S.; BINK, A.: Managing Global Accounts, Harvard Business Review, 2006.


Global Account Management – Upcoming People Development and Practice Sharing Opportunities

Customer-Centric Leadership

4th Global Account Manager Certification Program (GCP)

Winning and Keeping Global Customers

11th GAM Executive Program (GAMPRO)

Identifying next, Best Practices in GAM

Global Account Management Forum (2012 onward)


Making Customer Management Work

AMC Account Management Center Frankfurt – New York – Zurichwww.amc.com

Download - Suppliers get the global customers they deserve …€¦ · Suppliers get the global customers they deserve... ... and Cadbury’s ... Suppliers get the global customers they deserve

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