1. Dr. Dawne Martin August 30, 2011

2.  Groups for Project  Overview of Project content  Thursday: Meet at Hale Library, Room 301 at 8:05  For Tuesday, September 6 – Read and prepare Exhibits Plus, p. 524  Videos ◦ the bakery charlie chaplin ◦ http://adland.tv/commercials/ibm-charlie-chaplin- bakery-1985-030-usa http://adland.tv/commercials/ibm-charlie-chaplin- bakery-1985-030-usa ◦ MacIntosh 1984 ad http://www.youtube.com/watch?v=OYecfV3ubP8

3.  To identify what business issues drive the Business-to-Business market  To understand how buyer and seller relationships are developed and maintained  To understand the necessary ingredients for the development of relationships  To understand how purchasing is playing a role in developing relationships

4.  Situation Analysis ◦ SWOT Analysis  Assumption and Missing Information ◦ Information to fill in the gaps in SWOT  Statement of Problem(s) ◦ Symptom – observable manifestations of problem ◦ Problem - -why the symptoms occurred ◦ Brief – one to two sentences – clear indication of what needs to be addressed

5.  Development of Alternatives ◦ Either/Or Decision ◦ Strategic – identify basic direction for firm  Evaluation of Alternatives & Recommendation ◦ Criteria  Does it address the problem?  Is it consistent with the mission statement?  Feasibility & probability of success? ◦ Cost and revenue implications

6.  Implementation – specifics of how you will enact the solution  Evaluation and Control ◦ Set clear objectives  What do you expect the recommended solution to accomplish?  What is the timeframe for implementation and results? ◦ Benchmarks to track performance ◦ Contingency plans

10.  Supply and demand of products ◦ Buyers’ estimate of value ◦ Sellers choice of customers and markets  Supply Chain Management ◦ Efficiency gains ◦ Effectiveness  Under what market conditions are relationships likely to be formed? ◦ Transaction size ◦ Complexity of product ◦ On-going need  What motives are there to create relationships?

11. Why would the buyer’s motivation to build relationships be low? High? Why would the seller’s motivation to build relationships be low? High?

12. Seller  Reduced costs of sales  Better planning for growth & production  Information on customer needs  Eliminate price competition  Profitability ◦ Referrals ◦ Price premiums ◦ Operating expenses Buyer  Reduced costs of buying  Reduced perceived risk  Partner for resources & customization  Sustainable competitive advantage

13. One-Time Market Transactions Long-Term Relationships Market Exchanges Strategic Partnerships Functional Relationships Transactions Social relationships Safeguarded & corporate relationships Investment of resources Long-term vision

15.  Office Supplies  O-Rings  Data Entry Services  Custodial Services  Applications Engineering  Storage Racks  Payroll Software  Office Furniture  Small Electric Motors (Components

16. Dwyer, Schurr and Oh (1987), Developing Buyer-Seller Relationships, Journal of Marketing.

17.  Power: Ability of one to get another to do what it would not do otherwise ◦ Dependence  Justice: Rendering what is merited or due

18.  Providing Information  Reciprocation  Relationship Building Block ◦ Understanding drivers in other’s business ◦ Roles in relationship ◦ Other’s strategies ◦ Problems or concerns

19.  Norms: Standards of behavior and guidelines for interaction  Common Goals ◦ Incentive to pool strengths & abilities  Opportunities for Shared Goals ◦ Competitive Advantage ◦ New market opportunities ◦ New products

20.  Trust: Belief that party will fulfill its obligations in the relationship  Aspects of Trust ◦ Dependability ◦ Capability & Expertise ◦ Concern for Other  Developing Trust ◦ Going beyond expectations  Commitment: Actively contribute to relationship  Investments ◦ Money ◦ Skills ◦ People ◦ Expertise ◦ Market access ◦ Shared processes

21.  Based on perceptions of commitment ◦ Site visits ◦ Depth & breadth of contacts ◦ Exchange of personnel ◦ Dependency balancing -- cultivating relationships with other suppliers ◦ Supplier pledges or long term contracts ◦ Relational contracts

22.  Steady supply & delivery ◦ JIT ◦ Concurrent-Manufacturing ◦ Electronic Data Interchange (EDI) or E-commerce  Quality and standards  Total cost  Total Cost of Ownership ◦ Economic Order Quantity & Forward Buying ◦ Value Analysis  Purchasing Philosophy ◦ Adversarial purchasing philosophy ◦ Partnership or Preferred Supplier philosophy ◦ Single Sourcing

23.  1994 - Licensed Mac Os to increase market penetration in publishing, design and database applications  1995 - Mac clones began to take Apple market share in existing customers  1997 - Apple acquired PowerPC and ceased licensing  Questions: ◦ What did Apple hope to gain by licensing? ◦ What were licensee looking for? ◦ Could the license been structured differently? ◦ How did customers fare under licensing?

24.  2007 Pet Food Poisoning ◦ ZAB accused of mixing melamine into wheat gluten to increase the apparent protein content of gluten  Melamine believed to be contaminated by other poisons  Exported through textile company to avoid inspection of food products by China ◦ Menu Foods food purchased gluton from ChemNutra, who purchased from Suzhou Textiles Silk Light & Industrial Products – who purchased from ZAB

25.  FDA inspects 1% of food supply, how is it that episodes like this are so rare?  Is this episode a result of only global sourcing?  Can the market fix this problem, or is more regulation required?