Do Business Well

4. You lose your location. You can insure your building against destruction through fire, flood, or earthquake. You can also purchase business-interruption insurance that is supposed to give you enough staying power to reopen in a new place. What if you don’t have that insurance? Or you have a month-to-month rental, and your landlord gives you notice? Maybe you miss a lease payment, and the building’s owner holds you to the letter of the lease and kicks youout?

For many businesses, this type of disaster in the early going isall but insurmountable. This is especially so where there has been a large investment in build-outs, signage, or fixtures that can’t be easily transferred to a new location. Here are some approaches thatmight save your bacon. Continue Reading »

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The second strategy focuses on solutions that address the specific circumstances of individual clients who are eager to break new ground. In other words, this approach concentrates on exploiting new opportunities and resolving ad hoc problems.

Traditionally, this has been the strong suit of strategy and operations consultants, whose depth of knowledge and years of experience give them a well-honed capacity to solve knotty problems. For a critical perspective and fresh thinking, customers call on McKinsey, A. T. Kearny, BCG, or A. D. Little—to name a few of the larger firms—or any of multiple smaller specialists. Continue Reading »

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So far, we have talked about projects that may take as little time to complete as a week or as much as several years. When a client replaces its computer systems or sets up a business-to-business exchange, the involvement, though lengthy, is finite with a specific beginning and end.

Here we focus on providing ongoing coaching and value- adding services to collaborators for as long as they are needed or wanted. The market leaders that excel at offering them stand out as much for their insight and knowledge as for their clear understanding of customers‘ specific and evolving needs. At the root of their success is the capacity to form genuinely respectful, trusting, close relationships with their clients. Not unlike the relationships that doctors, clerics, lawyers, and other confidants form with their patients and clients, these suppliers get to know and understand their customers, hence are far more able to guide and advise them on myriad circumstances. Continue Reading »

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When your largest customer dominates its industry, you can expect to share in its good fortune. This is self-evident to the executives at Keystone Foods and J. R. Simplot, two privately held (hence unranked) companies that supply McDonald’s restaurants in the United States with, respectively, meat and potatoes. They are among the many suppliers whose fruitful collaborations with the fast food chain have lasted decades, after starting with nothing but a handshake agreement.

When customer and supplier interests are so intricately entwined, the concept of teaming up with customers assumes another dimension in addition to those we have discussed thus far. As a result, my fourth strategy for winning collaborator customers calls for more than specialized expertise and a close relationship. It entails a radical commitment—not easily reversed—to joint success. Here the primary emphasis changes to the physical and strategic interlocking of the supplier’s and customer’s businesses. Continue Reading »

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What collaborators value above all else are their suppliers‘ skills as consultants and expertise in project management. That explains why demand has surged for all kinds of advisory services, for instance, the offerings of the Big Five accounting-cum-consulting firms, and the likes of EDS and CSC. Outpacing them all on the basis of growth is IBM, which for decades has been portraying itself as a total-solutions provider. About 60 percent of its growth over the past six years was derived from value-added services, not products. With an army of 130,000 people working to ensure that customers glean the maximum benefit from technology and its complexities, IBM generated $32 billion in service revenues during 1999. Working with collaborators accounted for roughly half of that; outsourcing and related services provided to delegators accounted for the other half.

The trend toward embellishing offerings with value-added support has escaped neither other technology companies nor other industries. Continue Reading »

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`Place’ (Convenience in the 4- Cs) means the elements of the marketing mix that marketers use to enable customers to access the benefits of a product or service. Traditionally, this has meant ‘channels of distribution‘ through (e.g.) various wholesaler and retailer combinations. Viewing from the ‘convenience for the customer‘ (4-Cs) perspective gives a more customer-orientated focus. This is a vital decision area for the e-Business for three reasons. First, relatively small local companies can widen their market and even export (e.g. Botham (www.Botham.co.uk), to be described further in Chapter 9). Second, many e- Businesses aim to gain competitive advantage by using e-Systems to de-layer the distribution chain. For example, Dell (www.dell.co.uk) supplies customers directly, rather than through distributors, wholesalers or retailers. Third, distribution is an area where some e-Businesses have been severely criticized for failing to deliver customer service (see Chapter 9 for more details).

Place elements of the marketing mix have been changing rapidly over recent decades, and these changes impact in many ways on the marketing operations of the e-Business. First, the growth of retailer power has involved major retailers taking more control of their supply chains. The involvement of wholesalers has been reduced, tending to give way to contract logistics (under retailer control). At the same time, supply chains have become more efficient, with computer network links between suppliers and retailers — many still based on EDI. Predating the Internet, EDI is based on privately owned third-party computer networks. Stock levels have been reduced using techniques such as JIT and Enterprise Resource Planning (ERP). Control of the physical distribution, ordering, invoicing and payment systems, particularly for major retailers, is often still carried out using EDI networks such as Tradanet (www.gegxs.com/gxs/ products/product/traser). Increasingly, though, retailers such as Tesco are allowing Internet access to their suppliers for real-time electronic point-of-sale (EPOS) data. Trusted supplier partners can thus respond more quickly to changes in customer demand. Continue Reading »

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