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  • 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 dont want to implement a global account management program because that will just allow our multinational customers to get a bigger price discount from us. Its 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)

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

    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

    Page 3

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

    The race has already started Three Reasons

    Page 4

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

    The race has already started Three Reasons

    Page 5

    The increasing importance of global customers

    The quest for customer-centric sales models

    Differing views of global business potential

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

    The increasing importance of global customers

    Chocolate producer Barry Callebaut announced closer strategic cooperation with Nestl, Hersheys, and Cadburys 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. Britains 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)

  • Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 7

    The quest for customer-centric sales models

    Country

    Product

    Customer

    Future

    Source: AMC, Senn (2006).

  • Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 8

    Differing views of global business potential

    EXAMPLE Suppliers 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 Customers 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

  • Prof. Christoph Senn, Account Management Center (AMC), 2010Page 9

    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

  • Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 10

    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

  • Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 11

    ... 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

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

    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

    Page 12

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

    How to make GAM Programs really work: Insights and examples

    Page 13

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

    How to make GAM Programs really work: Insights and examples

    Page 14

    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

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

    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)

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

    Pick the right type of GAM program

    Page 16

    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)

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

    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)

  • Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 18

    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)

  • Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 19

    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)

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

    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

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

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

    Page 21

    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

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

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

    P&Gs top 2-10 global customers represent an estimated additional 16% of total business

    P&Gs 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?

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

    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

    Page 24

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

    Breakout sessions: Ba

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