Chapter FourChapter Four“Players”“Players”

Jennifer Mele and Molly PatrickJennifer Mele and Molly Patrick

Becoming a PlayerBecoming a PlayerBittersweet SuccessBittersweet Success: :

Holland Sweetener Holland Sweetener & Monsanto& Monsanto

Another Coal PorterAnother Coal Porter: : Norfolk Southern Norfolk Southern & CSX& CSX

-Should have sold -Should have sold competitioncompetition-Could have been “Paid to Play”-Could have been “Paid to Play”

Becoming a Player Cont…Becoming a Player Cont… Answering the Call:Answering the Call: McCaw & BellSouth McCaw & BellSouth-Both companies were “Paid to Play”-Both companies were “Paid to Play”-BellSouth recognized who stood to gain-BellSouth recognized who stood to gain

Look at the whole market before you enterLook at the whole market before you enter-competition is valuable, don’t give it away-competition is valuable, don’t give it away-get paid to play-get paid to play

7 Ways to Get Paid to Play7 Ways to Get Paid to Play1.1. Ask for contributions toward your bidding Ask for contributions toward your bidding

expenses.expenses.2.2. Ask for a guaranteed sales contractAsk for a guaranteed sales contract3.3. Ask for a last-look provisionAsk for a last-look provision4.4. Ask for better access to informationAsk for better access to information5.5. Ask to deal with someone elseAsk to deal with someone else6.6. Ask to bid on additional pieces of businessAsk to bid on additional pieces of business7.7. Ask the customer what he would payAsk the customer what he would pay

8 Hidden Costs of Bidding8 Hidden Costs of Bidding1.1. Better uses of your timeBetter uses of your time2.2. When you win business, you lose moneyWhen you win business, you lose money3.3. The incumbent can retaliateThe incumbent can retaliate4.4. Your existing customers will want a better dealYour existing customers will want a better deal5.5. New customers will use the low price as a New customers will use the low price as a

benchmarkbenchmark6.6. Competitors will also use low price as a Competitors will also use low price as a

benchmarkbenchmark7.7. It doesn’t help to give your customers’ It doesn’t help to give your customers’

competitors a better cost positioncompetitors a better cost position8.8. Don’t destroy your competitors’ glass houseDon’t destroy your competitors’ glass house

Calling all PlayersCalling all Players What to do when a customer wants you What to do when a customer wants you

to match a bid…to match a bid…- People make up bids- People make up bids- Remind the customer of your track - Remind the customer of your track recordrecord- If customer values the relationship, - If customer values the relationship, you you won’t need to meet it won’t need to meet it entirelyentirely- May be better to let them go- May be better to let them go

Bringing in Other Bringing in Other PlayersPlayers

Bringing in CustomersBringing in Customers Bringing in SuppliersBringing in Suppliers Bringing in ComplementorsBringing in Complementors Bringing in CompetitorsBringing in Competitors

CustomersCustomersWhy bring in customers?Why bring in customers?

- it’s a bigger pie- it’s a bigger pie- more sales- more sales- more profits- more profits- lowers the added value of all the existing - lowers the added value of all the existing onesones

CustomersCustomersHow to bring in customersHow to bring in customers

- educate the market- educate the market- pay them to play- pay them to play- stimulate complementary products- stimulate complementary products- become your own customer- become your own customer

SuppliersSuppliersWhy bring in suppliers?Why bring in suppliers?

- no one supplier is essential- no one supplier is essential- buyer becomes stronger- buyer becomes stronger

How to bring in suppliersHow to bring in suppliers - pay them to play- pay them to play - form buying coalitions- form buying coalitions - become your own supplier- become your own supplier

ComplementorsComplementorsWhy bring in complementorsWhy bring in complementors

- raises your added value- raises your added value- the more the merrier- the more the merrier

How to bring in complementorsHow to bring in complementors - form a buying coalition of behalf of - form a buying coalition of behalf of customerscustomers - pay them to play- pay them to play - become your own- become your own

CompetitorsCompetitorsWhy bring in competitorsWhy bring in competitors

- pushes you to be your best- pushes you to be your best- increases customer interest- increases customer interest

How to bring in competitorsHow to bring in competitors - license your technology- license your technology - create second sources- create second sources - promote internal competition- promote internal competition

Changing the PlayersChanging the Players Who stands to gain from your entry?Who stands to gain from your entry? Should you play?Should you play? Changing the playersChanging the players

- customers- customers- suppliers- suppliers- complementors- complementors- competitors- competitors