Chapter Four “Players”

Chapter Four“Players” Jennifer Mele and Molly Patrick

Becoming a Player Bittersweet Success: Holland Sweetener & Monsanto Another Coal Porter: Norfolk Southern & CSX -Should have sold competition -Could have been “Paid to Play”

Becoming a Player Cont… • Answering the Call: McCaw & BellSouth -Both companies were “Paid to Play” -BellSouth recognized who stood to gain • Look at the whole market before you enter -competition is valuable, don’t give it away -get paid to play

7 Ways to Get Paid to Play • Ask for contributions toward your bidding expenses. • Ask for a guaranteed sales contract • Ask for a last-look provision • Ask for better access to information • Ask to deal with someone else • Ask to bid on additional pieces of business • Ask the customer what he would pay

8 Hidden Costs of Bidding • Better uses of your time • When you win business, you lose money • The incumbent can retaliate • Your existing customers will want a better deal • New customers will use the low price as a benchmark • Competitors will also use low price as a benchmark • It doesn’t help to give your customers’ competitors a better cost position • Don’t destroy your competitors’ glass house

Calling all Players • What to do when a customer wants you to match a bid… - People make up bids - Remind the customer of your track record - If customer values the relationship, you won’t need to meet it entirely - May be better to let them go

Bringing in Other Players • Bringing in Customers • Bringing in Suppliers • Bringing in Complementors • Bringing in Competitors

Customers Why bring in customers? - it’s a bigger pie - more sales - more profits - lowers the added value of all the existing ones

Customers How to bring in customers - educate the market - pay them to play - stimulate complementary products - become your own customer

Suppliers Why bring in suppliers? - no one supplier is essential - buyer becomes stronger How to bring in suppliers - pay them to play - form buying coalitions - become your own supplier

Complementors Why bring in complementors - raises your added value - the more the merrier How to bring in complementors - form a buying coalition of behalf of customers - pay them to play - become your own

Competitors Why bring in competitors - pushes you to be your best - increases customer interest How to bring in competitors - license your technology - create second sources - promote internal competition

Changing the Players • Who stands to gain from your entry? • Should you play? • Changing the players - customers - suppliers - complementors - competitors

Chapter Four “Players”