2. Review
• Focus on Preparation
– Plan, Execute, Review, Adjust
– Stakeholders, Issues, Outcomes, Values
• BUILDER, BATNA, & ZOPA
– The better to develop issues, understand other
parties’ perspectives, assess value of outcomes
– Make first offer, go for target, but not crazy (but do
consider norms)
• Stay Creative: Focus on $$ or Innovative Trawling
• Problem Solving, Not Battle Fighting
• Dynamics: Positions vs Needs
16. In 1991, I interviewed with Sam Walton regarding a
position as the Produce Director for the Supercenter
Division at Wal-Mart Stores, Inc. During that interview,
Sam said that in 10 years, Wal-Mart would be the largest
retailer of food in the world! Now keep in mind that in
1991, Wal-Mart had 6 Supercenters. So “rapid growth”
was going to take on a whole new meaning. Also, in 1991,
Wal-Mart’s reputation in the produce industry was based
on the experience with Sam’s Wholesale Clubs. Unlike
today, that reputation was frankly not very good. In fact,
it was so bad, that many prominent produce suppliers did
not want to do business with Wal-Mart, based on their
experiences with Sam’s. Finally, I came to learn that WalMart was a sales driven, EDLP (Everyday Low Price)
company.
http://www.atozsolutions.com/putting-win-win-relationships-practice/
17. So in 1991, as the Produce Director of Wal-Mart
Supercenters, a “win” for me meant 3 things:
1. I had to develop a supplier base that would support
our growth
2. I had to develop a reputation within the produce
industry that would encourage collaboration and
support our development (co-managed
replenishment, contract purchases, RPC’s, and RFID to
name just a few!)
3. I had to be able to drive double-digit comp store
sales, and do so within an EDLP environment. This
meant no feature, price off advertising!
http://www.atozsolutions.com/putting-win-win-relationships-practice/
18. Having over 20 years experience in the produce industry
at the time, I knew that a “win” for our suppliers would
be:
1. Never negotiating a contract for less than the cost of
production
2. Allowing suppliers total transparency to POS data so
they could become a part of managing our growth
3. Being able to pass along cost savings to our customers
by lowing the retail on specific commodities, to move
short term spikes in commodity supply though the
supply chain
http://www.atozsolutions.com/putting-win-win-relationships-practice/
19. Said very simply, it was a beautiful thing: Total
“win-win-win” (the 3rd “win” was our
customers!). Wal-Mart had a growth rate in food
that could not be duplicated. Our suppliers made
a good profit, could reinvest in their business,
and knew exactly what they were accountable
for. We had an unprecedented comp store
growth rate, we became a very desirable receiver,
and our suppliers achieved things that they never
dreamed possible. It all happened because we
“began with the end in mind.” Our suppliers
knew exactly what we were trying to accomplish
and I knew exactly what our suppliers needed to
participate with us.
20. If you look at Wal-Mart in 2013, those goals have evolved.
1. They are diversifying their supplier base. “Local purchases,”
“sustainability,” and a host of other reputational issues have taken
center stage
2. Co managed replenishment is far less important. In fact, the
“buyer” today is only interested in negotiation of the lowest price.
Hence, contracts are put out to “bid”
3. As comp store sales have flattened out (and have even gone
negative), GROSS MARGIN has become the driving financial
element.
I am not suggesting that this is a good or a bad thing. It is merely the
evolution of a large, publically held company. So a “win-win” for the
buyer-seller looks very different today. That is not to say you can’t
achieve them, but the definition of a “win” for a supplier must take
place within the context of a “win” for the buyer.
http://www.atozsolutions.com/putting-win-win-relationships-practice/
Editor's Notes
Now let’s apply it. Download the spreadsheetUnits30 minutes
