Chapter Seven Strategic Relationships

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Chapter SevenStrategic Relationships
2
Strategic Relationships Between Various
Organizations
Channel Member
Competitor
Company
Customer
Supplier
3
Objective of building strategic relationships

• Gain Access to Markets
• Vertical relationships
• Horizontal relationships
• Enhancement of Product Offering
• Creating value
• Reduction of risk
• Joint Ventures
• Alliances

4
The Logic of Collaboration ?

• Is partnering a promising strategy?
• How essential is the relationship strategy?
• Are good candidates available?
• Do relationships fit our culture?

5
Types of Organizational Relationships - Vertical

• Customer Supplier Relationship
• The value chain
• Distribution Channel Relationship
• Vertical Marketing System
• End User Customer Relationships
• CRM

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Strategic Alliances

• Advantages
• Access to markets
• Access to technology
• Economies of scale in manufacturing and marketing
  activities
• Sharing of risk among partners

• Stumbling blocks
• Problems in coordination and trust
• Problems in implementing alliances on a global
  scale
• Problems in maintaining alliances over time

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Alliance Success

• Partners are evaluated based on
• Resource relationship
• Reputation
• Capabilities (Marketing R D)
• Chemistry/culture
• Relationship/ management skills

8
Joint Ventures

• Advantages
• Only path of entry to international markets
• Opening of market opportunities
• Better relationship with local authorities and
  customers.
• Acquire knowledge for core business

• Disadvantages
• 50 are disbanded because of disagreement over
  profit distribution
• Clashes over management style
• Disagreement over course that strategy should
  follow

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Internal Partnering

• Demonstrate management support
• Start with a pilot team
• Keep the team together
• Link the team to the strategy

• Seek complementary skills for the team
• Educate and train
• Address the issue of team leadership
• Motivate and reward team performance not
  individual performance.

10
Global Relationships Among Organizations

• Types of global organizations
• the network corporation
• trading companies
• The strategic role of government
• single nation partnership
• multiple nation partnership
• government corporations
• government legislation

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Customer Relationship Management

• The process of managing detailed information
  about individual customers and carefully managing
  all customer touch points to maximize customer
  loyalty.

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Groundwork for CRM

• Identify your prospects and customers
• Differentiate customers
• Interact with individual customers
• Customize products, services and messages to each
  customer.

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Improve Value of Customer Base

• Reduction in customer defection
• Increase longevity of the customer relationship
• Enhance the growth potential of each customer
• Making low-profit customers more profitable or
  terminate them
• Focus disproportionate effort on high-value
  customers