Organizational transactions are handled along a continuum of the firm’s customer relationships, ranging from relational and friendly to more adversarial and us-versus-them in demeanor. For top ...customers, the approach is almost always close and relational. In this article, we question this view and suggest that it is beneficial to condition the firm’s relationship development efforts on an understanding of the true value to be gained from partnering and increased closeness. We provide a framework with which managers can diagnose their current portfolio of relationships with key customers or suppliers and offer suggestions for action. We provide an empirical illustration of the typical distribution of responses among five regions of the framework and discuss its implications.
Why are so few organizations selling beneficial products at the base of the pyramid (BoP) successful? This is not simply a story of companies failing, and it is one with a dramatic consequence as ...low-income people do not benefit from products that can improve their way of life. Instead, they continue to drink unsafe water, cook on stoves that emit fumes that kill over 1 million people per year, light their homes with dangerous kerosene lamps, and fall ill from a mosquito bite. Based on a multiyear field research program conducted in 25 countries, we argue that having a specific mindset about BoP customers is consequential to an organization’s success. Many organizations start with the assumption that BoP customers lack money, knowledge, and jobs. By contrast, successful organizations start from the assumption that customers can and will pay if they are provided with a satisfactory solution to their needs and are reassured about the level of risk involved. We detail the different practices that follow from this mindset change in the areas of value proposition, communication, and distribution and show how these practices can make or break the organization’s financial sustainability.
This paper investigates how firms' decisions to outsource or internalize production affect their technological performance. While several popular arguments and some anecdotal evidence suggest a ...direct association between outsourcing and technological performance, the effects of firms' governance decisions are likely to be contingent upon several specific attributes underlying a given exchange. This paper first demonstrates how standard performance models can improperly suggest a positive relationship between firms' outsourcing decisions and their technological performance. Models that account for firm- and transaction-specific features are then presented, which indicate that neither outsourcing nor internalization per se result in superior performance; rather, a firm's technological performance is contingent upon the alignment between firms' governance decisions and the degree of contractual hazards.
Many sustainability initiatives focus on improving the sustainability of products and operations in legacy or adjacent markets or on achieving sustainability gains by exploring new markets with a ...more diverse set of products. This is a variation on the classic "where to play/how to win" strategy familiar to most executives. Fewer leaders, however, are exploring an important new frontier in sustainability, in which brands actively partner with customers to achieve ongoing impact. This article describes a practical framework for creating sustainability strategies that take into account both dimensions-markets and customer engagement. The model lays out the four key ways that legacy companies can nurture growth in their sustainability efforts.
What has come to be known as the poverty penalty – the additional cost paid for goods and services by the poor relative to the more affluent – is a familiar mechanism in emerging countries. For ...profoundly different reasons, however, poor people in developed countries also suffer from the poverty penalty. Quite naturally, without any particular ill will on the part of the actors in the commercial sector, the market sometimes penalizes the poor by making them pay more than other households, per unit of consumption, for the same goods and services. Drawing on a study by the Boston Consulting Group conducted at the request of the action tank “Entreprises et Pauvreté”, this paper sets out to quantify a part of the poverty penalty. The economic impact is far from incidental, as it represents, at the very least, a “double jeopardy” of an extra 2.5% of the total budget for low-income households, or some €500 –more than a month’s worth of “discretionary” spending. The paper sheds light on the various underlying mechanisms that contribute to the creation of the poverty penalty. These “undesirable side-effects” of the market are of five types: • An unfavorable cost structure • An unfavorable price structure • The law of supply and demand • A lack of equipment or an unfavorable risk profile • Insufficient objectivity to deal with scarce, imperfect or missing information. The ultimate aim is to favor the development of compensation or annulment solutions through “positive discrimination” actions implemented by businesses; experiments currently under way offer some hope in the fight against the poverty penalty.
S’appuyant sur une étude du Boston Consulting Group effectuée à la demande de l’Action Tank « Entreprise et Pauvreté », cet article permet d'expliquer et de quantifier ce que l’on appelle les ...pénalités de pauvreté en France. Les populations pauvres, comme dans les pays émergents - mais pour des raisons profondément différentes, payent plus cher que les autres ménages, les mêmes biens et services, par unité de consommation. L’objectif ultime est de favoriser le développement de solutions pour lutter contre ce phénomène ; des expérimentations actuellement menées par des entreprises françaises représentent un espoir dans la lutte contre ces pénalités de pauvreté.
Should you set up your own sales force or should you outsource it? The standard analysis is cost based and assumes that the direct sales force is a fixed cost and that the outsourced sales force's ...cost varies with sales. The standard analysis then calculates the sales volume at which the direct sales force's costs equal the outsourced sales force's costs and suggests that for sales volume above that quantity, firms should use a direct sales force. This analysis has two problems. First, several other cost factors are not considered in the standard analysis. Second, the standard analysis considers only cost, ignoring coverage efficiency and selling effectiveness differences between the two sales forces. Both problems will be detailed and developed in this paper. PUBLICATION ABSTRACT
Many companies overestimate customers' appetite for sustainable products, flooding the market with offerings that don't sell. The reality is, social and environmental benefits have less impact on ...purchasing decisions than basic product attributes do. Consumers buy products to get specific jobs done, and only after they find something that will do that will they look for a product that provides some social or environmental advantage. Of course, that's only if they value sustainability. Not everyone does, and marketers need to recognize that. Some customers (greens) place a premium on it, some (blues) value it only moderately, and some (grays) don't care about it and view it skeptically. The three segments cannot all be approached in the same way. How sustainable product benefits interact with traditional benefits is also critical: They can have no impact on a product's performance (independence), diminish it (dissonance), or enhance it (resonance). Marketers need to follow different playbooks for independent, dissonant, and resonant products, tailoring their approaches to green, blue, and gray customers with each.
