Customer loyalty is high on the corporate agenda: Loyal customers buy bigger quantities, they buy more frequently and they recommend a company to others. This leads to recurring business and boosts financial success. Often, customer retention is unilaterally initiated by suppliers and it seems that they profit more from the relationship than their customers. However, a well functioning, long-term relationship is based on the same rules as a good partnership in private life: There must be trust and the relationship has to be considered fair. In a business context, fairness means that the resulting added value for both parties is financially quantified and equitably shared. Customers should not feel ´locked-in´ by a relationship, with only a small chance to escape, because they technologically or contractually depend on a supplier. Rather, both parties should aim to build a long-term partnership where they jointly create value.
When you ask salespeople if they know their company´s strategy, you often get mixed results: Some will cite objectives, such as ´growth´ or ´profit´ (instead of describing a strategy). Others often don´t know their company´s strategy at all. In many cases, there is a lack of clarity about what strategy is. Therefore, here is a pragmatic definition: A strategy is a plan. It includes clear decisions about what a company does (e.g. exclusively serving a luxury segment) and does not do (e.g. not serving a low-price segment.) Based on these decisions, strategic initiatives (actions) are initiated to build competitive advantage and reach growth goals (turnover, profit, market share). The sum of all decisions and strategic initiatives constitutes the strategy.
When it comes to Strategic Excellence, Google, Apple, Amazon and Facebook are often cited as best practice examples. What makes these companies so successful? In his book ´The Four´, Author Scott Galloway shows that they have not only discovered new business models - they also satisfy basic needs and concentrate on what is essential: Amazon activates our archaic hunter-gatherer instinct, Google addresses our urge for knowledge, Facebook satisfies the need to connect with other people and Apple meets our desire to stand out from the crowd (Handelsblatt, August 31, 2018). However, there are also excellent small and medium-sized companies in Germany, whose success should inspire business leaders.
Value-Added Strategy 4.0 in the Machinery Industry: More Value for your Customers - More Profit for your Business
Growing price pressure is becoming an increasingly daunting challenge for many companies in the machinery industry. The reasons are manifold: Saturated markets, more demanding customers, rapid technological progress and low-price competition from emerging markets.
Agilty is the new management buzzword. It says that organizations should react quickly and flexibly to a changing environment or – ideally – that they should drive the change themselves before others do so. If they react too late, their very existence will sooner or later be at stake.