4Agenda Customer relationships Competitor and contingent relationships Collaborator relationshipsCo-worker relationshipsThe network of key relationships
5Strategic relationships and networks CustomerrelationshipsCompetitorand contingentrelationshipsStrategicrelationshipsand networksCollaboratorrelationshipsCo-workerrelationships
6Customer relationships Do we know what we want the customer relationship to be?Do we have that relationship or can we get it?Can we deliver that relationship?Do we understand the link between the strength of the customer relationship and the attractiveness of that customer’s business?
7Customer relationship The dancehall dilemmaCustomer relationshipStrongWeakPrime targetcustomers -achieve synergy aswe retain the “best”customers (we hope)Targets forconversion -are they attractiveenough to beworth chasing?HighCustomerattractivenessStickycustomers -they want us, wedon’t want them,so what do we do?Mutualantipathy -they don’t want us,we don’t want them,end of discussionLow
8Competitor and contingent relationships Some fundamental issues:every organization has competitorsevery company says “we know who our competitors are” and frequently get it wrongmost think that “competitors are in our industry” – see back to the Competitive Box to dispel that myth
9Competitor and contingent relationships Really understanding the competitionconventional analysis develops a competitor response profilethe psychology of competition may be just as significant – e.g., how ugly are the competitors around here?
10Competitor analysis Competitor’s goals What are they trying to achieve in thismarket?Competitor’s strategyWhat is this company’scurrent strategicposition?Competitor’s response profileIs this competitor satisfied with its current position?What are the likely moves they may make?Where is this competitor most vulnerable?What is this competitor sensitive about, what ismost likely to provoke a competitive reaction?Competitor’s strategicassumptions - Howdoes managementlook at the market?Competitor’scapabilities - What aretheir strengths andweaknessesAdapted from: Michael E. Porter, Competitive Strategy, New York: Free Press, 1980.
11How ugly are the competitors around here? Competitive reactionto our move?YesNoFight tothe deathShowdisdainHighCompetitiveaggressionWeakcounter-attackIgnoreusLow
12Competitor and contingent relationships Where is the competition coming from in this market?can we predict the strategic moves of our competitors and maintain our competitive advantage?do we recognise new potential competitors and new technologies?does our value proposition give us a specific positioning thatb plays to our strengths and avoids head-on competition?
13Competitor and contingent relationships Critical contingents:shapers of opinionregulatorsrecommendersgatekeeperssupplierssupply chain partners
14Collaborator relationships From outsourcing to alliances and networksoutsourcingpartnershipalliancevertical integration
15Types of collaborative relationship Closeness ofrelationshipNature of the relationshipOutsourcingArm’slengthLowPurchase of goods and servicesfrom outside the company, possiblyover the long termShort-term focus, but coordinatedactivities between partner companiesShort-termLong-termLonger-term focus with integration ofactivities between partner companiesPartnershipPermanent“Permanent” arrangement withpartner companies highly integratedJointventureShared ownership in an operationwith a collaborator companyAllianceVerticalintegrationFull ownership of the activitiesor operationsOwnershipHigh
16Collaborator relationships Advantages in collaboration:cost efficiencycustomer servicemarketing advantagestrategic advantageprofit stability and growth
17Collaborator relationships Network organizationsa new organization form: the hollow or networked organization
19Collaborator relationships Collaborations that crashsynergy or “ygrenys”Managing partnerships and collaborationscorporate compatibilitymanagement style and techniquesmutualitysymmetry
20Collaborator relationships Partnership-based strategy should consider time and cost in:establishing the partnershipmonitoring the partnershipstrengthening the partnershipgetting out of the partnership
21Co-worker relationships Can and will employees/managers in the company/alliance deliver the promise of the value proposition to the customer?do not assume everyone will think our strategy is great and buy-inbe realistic about capabilitiesLink to internal marketing strategy
22The network of key relationships Relationships with customers, competitors, contingents, collaborators and co-workers are connectedChallenge is to test market choices and value propositions against the network’s capabilities
23British Airway’s relationship network CustomersCustomer satisfaction levelsfalling; premium passengersswitching brands; higherservice image weakenedCompetitors and contingentsVirgin antagonism continues;low cost operators attackingthrough courts; Europeanregulator investigates;no help from governmentCollaboratorsUSAir alliance crashed;American Air alliance stalled;travel agents are hostile;BAStrategyCo-workersClimate surveys go down; newbranding is resisted; industrialaction takes place and moreis threatened
24The network of key relationships The danger is developing and pursuing attractive strategies that rely on relationship network capabilities which do not exist