Chapter 7 Marketing

Chapter 7 – Creating collaborator Value
Collaborators are entities that work with the company to create value for target customers. Because
most collaborators are business entities, collaboration typically involves business-to-business
relationships aimed at creating customer value.
Because collaboration is a value-creation process, it spans the processes of designing, communicating,

and delivering value to target customers. Accordingly, collaboration can occur in three domains:
(1) value-design collaboration— including product and service development, brand building, price
setting, and incentive design;
(2) value-communication collaboration—including advertising, public relations, and social media; and
(3) value-delivery collaboration—including the actual delivery of a company’s products and services.
Advantages of collaboration:
1. Effectiveness - Because collaboration enables each party to take advantage of the other’s
expertise, it can provide both entities with a competitive advantage.
2. Cost efficiency - Specialization might also encourage a company to invest in cost-efficient
solutions (e.g., an inventory-management system) that it would not invest in if it lacked a scale of
operations.
3. Flexibility - For example, the development of a new distribution channel requires substantial
resources and hence calls for a longterm commitment, whereas using an already existing
distribution channel (e.g., renting rather than buying the shelf space) allows a company’s
commitment to a project to be much more flexible.
4. Speed - Collaboration enables a company to achieve the desired results much faster than
building in-house expertise. For example, a manufacturer can gain access to target markets
virtually overnight using an existing distribution chain, whereas launching its own distribution
channel would take considerably longer
Disadvantages of collaboration:
1. Loss of control - Delegating certain aspects of a company’s activities to an external entity often
leads to loss of control over the value-creation process. For example, outsourcing manufacturing
operations frequently hinders the company’s ability to monitor production processes and
product quality. Outsourcing also diminishes the company’s ability to monitor the financial
aspects of the value-creation process.
2. Loss of competencies - Outsourcing key activities tends to weaken a company’s core
competencies. For example, outsourcing research-and-development activities over time tends to
diminish a company’s ability to drive innovation.
3. Empowering the competition - Outsourcing key activities also might enable collaborating entities
to develop a set of strategic competencies, thus becoming a company’s potential competitor.
Collaboration can be either explicit or implicit:

1. Explicit collaboration - involves contractual relationships, such as long-term contractual
agreements, joint ventures, and franchise agreements. The key advantage of explicit
collaboration is that it fosters a formal relationship among collaborating entities, which
ultimately leads to greater effectiveness and cost efficiency. At the same time, explicit
collaboration has certain drawbacks, such as lower flexibility, greater switching costs, and the
strategic risk of creating a potential competitor by sharing proprietary information (e.g., pricing
policies, profit margins, and cost structure).
2. Implicit collaboration - typically does not involve contractual relationships and is much more
flexible than explicit collaboration. This flexibility, however, comes at the cost of an inability to
predict the behavior of various channel members. Another shortcoming of implicit coordination
is the lower level of commitment, resulting in unwillingness to invest resources to customize the
channel for a particular manufacturer. Implicit coordination is also likely to lead to lower cost
efficiency (vis-à-vis explicit collaboration) resulting from a lower degree of coordination (e.g.,
due to lack of systems integration)
Alternatives to collaboration:
1. Vertical integration – typically involves the acquisition of an entity occupying a different level in
the value-delivery chain. Depending on the relative position of the entities, there are two
common types of vertical integration: forward and backward. Vertical integration tends to be
favored by companies seeking to control the key aspects of the value-delivery process.
2. Horizontal integration - involves acquiring a business entity at the same level of the value-
delivery chain. For example, a retailer acquiring another retailer or a manufacturer merging with
another manufacturer constitutes horizontal integration. Horizontal integration tends to be
favored by companies for a variety of reasons, including gaining access to new markets,
acquiring the rights to proprietary technology or research, reducing the competition in
strategically important markets, and gaining power over the other entities in the valuedelivery
chain.
Collaborator power refers to the ability of a given company to exert influence over another entity. This
influence often leads to an imbalance in the value exchange in favor of the more powerful entity and to
market outcomes such as higher prices, margins, discounts, and allowances; preferential access to scarce
resources; and premier shelf space and product-delivery schedules.
1. Offering differentiation - Companies with differentiated offerings in high demand are likely to
have more power over their collaborators than companies with commoditized offerings. For
example, companies with strong brands such as Coca-Cola, Adidas, and Samsung have more
power dealing with their distribution partners than companies with lesser known brands.
2. Collaborator size - Consolidated entities—both manufacturers and distributors —are likely to
have more power over fragmented ones. For example, large consumer packaged goods
manufacturers such as Procter & Gamble, PepsiCo, Kraft Foods Group, Unilever, and Nestlé often
receive preferential treatment (better shelf space, lower volume discounts, and lower
promotional allowances) from retailers compared to smaller manufacturers. S
3. Strategic importance - An entity tends to have more power when it accounts for a significant
portion of its collaborators’ profits. For example, Walmart is in a position of power when
negotiating with small manufacturers because their individual net contribution to Walmart’s net
income is low, whereas for many of them Walmart accounts for a substantial part of profits.
4. Switching costs - An entity is likely to have more power when the switching costs of its
collaborators are high and its own switching costs are low. Such switching costs might stem from
a variety of factors, including a high level of systems integration between a company and its
collaborator(s), long-term contractual obligations, and the learning curve associated with
collaborating with a new entity.
კატეგორიის მენეჯერი - ყავები. წარმადობა (აკეთებდე), სწრაფად მიღება გამორიცხულია .
დისტრიბუცია? სასაწყობე ფართი? შეკვეთების ამღები, შესვლის გადასახადი , მაღაზიაზე .

რამდენი მაღაზია მინდა, ფასდაკლება. გადახდის პირობა - რეალიზება თუ კონსიგნაცია
(დროებითი)
მერჩენდაიზრები - გოგოები (აქცევს ყურადღებას, ამ პროდუქტს)

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Chapter 7 – Creating collaborator Value

Because collaboration is a value-creation process, it spans the processes of designing, communicating,

Collaboration can be either explicit or implicit:

კატეგორიის მენეჯერი - ყავები. წარმადობა (აკეთებდე), სწრაფად მიღება გამორიცხულია .

დისტრიბუცია? სასაწყობე ფართი? შეკვეთების ამღები, შესვლის გადასახადი , მაღაზიაზე .

მერჩენდაიზრები - გოგოები (აქცევს ყურადღებას, ამ პროდუქტს)

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