Inc.com recently featured an article on supplier diversity that touched on the fact that major buyers are increasing their supplier diversity initiatives. These buyers want suppliers who are innovative, quick and responsive to fast-changing needs.
In Suppliers: How to Get a Bigger Piece of the Pie, writer Tom Searcy says that it’s becoming rarer for big buyers to single source contracts.
Companies see supplier diversity as a way to keep costs in check, run more nimbly and even to increase business security (by not having all their “eggs in one basket”).
The article also offers some good insights for diverse supplier looking to better compete for, or keep, a larger share of contacting opportunities. As a supplier you’re the “tiger” or the “stick.” Your growth strategy depends on which you are, the writer explains.
For obvious reasons, I refer to the supplier with the largest share as the “tiger.” The supplier which has the smaller share I call the “stick,” since it will often be used to keep the “tiger” in check. Each has its own risk and opportunity, but the strategy, depending upon your position, may be very different.
The article goes on to offer specific strategies for winning in the supplier arena based on size and several scenarios. For instance, smaller suppliers, the writer suggests:
If your performance is strong, ask for a 15 percent to 30 percent increase in volume above your current volume. This is a manageable amount for you to take and still provide great results. It also is enough for your customer to scare the tiger into performing better. However, once you have the increase that you can manage and maintain results, the work will likely stay with you.
For tigers? Consider this:
When you are clearly outperforming the other players you can continue to press for increasing volume, but don’t expect that you will ever get to single-source. Better to work for longer terms or additional sales of secondary products and services. Besides, when you are the tiger and you are outperforming the competitors, you probably have the most volume their policies will allow.
You can read more here.
So are you a tiger or a stick?ConnXus helps grow small, woman- and minority-owned businesses by connecting them to Fortune 2000 corporations seeking a competitive edge through supplier diversity. Learn more at connxus.com