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ELECTRONIC NEGOTIATIONS “A STRATEGIC PERSPECTIVE”

PLMA. ELECTRONIC NEGOTIATIONS “A STRATEGIC PERSPECTIVE”. W. FRANK DELL II, CMC DELLMART & COMPANY November, 2002. Your Salvation. Broker Or Direct. Collaborative Planning Forecasting & Replenishment. Electronic Negotiations. Auction Theory. Why Private Label? Is a commodity

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ELECTRONIC NEGOTIATIONS “A STRATEGIC PERSPECTIVE”

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  1. PLMA ELECTRONIC NEGOTIATIONS“A STRATEGIC PERSPECTIVE” W. FRANK DELL II, CMC DELLMART & COMPANY November, 2002

  2. Your Salvation Broker Or Direct Collaborative Planning Forecasting & Replenishment Electronic Negotiations DELLMART & COMPANY

  3. Auction Theory Why Private Label? • Is a commodity • No perceived difference • Quality • Performance • Service • Support • Retailer price mentality Before After DELLMART & COMPANY

  4. Internet Power • Knowledge Is Power • Electronic Commerce is the future • EDI’s expensive • Internet inexpensive • Eliminates middlemen • Exchanges? • Data Synchronization? • Item Registry? • Reduce transaction cost • Purchase Order $125 • Error correction $150 to $300 • Time is money, but change also costs money DELLMART & COMPANY

  5. Exchange Factors DELLMART & COMPANY

  6. Costing Sales - Broker Com. / Pay Terms - Cost of Goods - Label allowance = Gross Margin - Management - Sales - Order Processing - Marketing - Accruals - Distribution - Freight - Accounting - Acct. Rec. & Deductions = Operating Profit DELLMART & COMPANY

  7. Strategy Questions • Are you truly a commodity? • Are your points of difference real? • Product quality • Product performance • Service & support DELLMART & COMPANY

  8. Strategy Alternatives • Ignore • Help your competition into bankruptcy • Compete to WIN • Become the low cost supplier • Cut the bull • Develop & Market unique products DELLMART & COMPANY

  9. Operations Plan • Be honest with yourself • Define your policy • Know your costs • Allocate staff & support • Maximize competitive intelligence • Define & execute bid tactics DELLMART & COMPANY

  10. Broker’s Role ? • Who are they working for? • Do they represent competing manufacturers? • Are they a middleman? DELLMART & COMPANY

  11. Closing Thoughts • Electronic Negotiations will not control the world • Limit the competition • Create a Selling Cooperative • Leverage “Balance of Power” DELLMART & COMPANY

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