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Summary international entrepreneurship IOR 3
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Summary of 45 pages for the course international entrepreneurschip at KdG (notities les + ppt)
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International entrepreneurship1. Business-to-business marketing and industrial
procurement
Most of Industry around us in the B2B sector. Only small part is consumer marketing. All the
fabrication is B2B.
Pictures on the slide are the B2B steps of producing a car.
Derived demand: only consumer buying a car will lead to the production of the car. So upstream. End
consumer buying a car will trigger the demand upstream.
Industrial marketing is more global it is truly international entrepreneurship. Much more than
consumer goods when we only see the last step which is more a local step.
FE: supplier of car seats to Volkswagen (B2B)
We speak about derived demand (upstream)
- Industrial marketing is a little more complex
- Derived demand (afgeleide vraag)
- Everything is B2B, except the last step which is consumer marketing
- The concept of quality in the B2B is much broader than in B2C.
- Parties in B2B are partners and really need each other. (e.g. car seat and foam)
1.1 B2B marketing vs consumer marketing
Differences between B2B and industrial marketing. Distinctive features:
- B2B marketing = industrial marketing.
- Quality is more about product quality with consumer marketing.
- Industrial setting is about total quality.
- Consumer goods is more standardized as in a B2B context tasks is mich more complex,
variable.
1
,CUSTOMERS
- Clients in an industrial setting are mostly commercial. One company buying from another.
The buyer in big companies is often a certain group or a certain department
- But very important sector of business in government sales. They are important players in the
economy. Players that require very specific approach. They are not only making commercial
considerations, also social, political considerations in some countries even corruptions. They
have very slow payment. but you’re sure you’ll get your money. Special cf approach.
We will only focus on commercial side.
- Institutional: schools, hospital,.. usually big buyers. Their approach is much more formal than
in commercial business. We have rules on public tendering, if they buy something for
example KdG they have to issue a public tender where all interested parties can participate.
Very specific approach for this buyers. In between commercial and government.
IMPLICATIONS OF JIT
- JIT is important. Company works in JIT manufacturing that can have consequences to your
B2B business with us as we work more traditional, we work more just in case.
- Differences between traditional manufacturing and Jit manufacturing.
- Kaizen link lesson! = where JIT is also an important element
The bigger the company, the more JIT
Link with Muda and Andon!!!!!!!!!!!
GOODS
- Entering goods: raw materials, arts,
- Capital/ foundation goods : machinery
- Facilitating goods: costs in your operations: service supplies, maintenance.
As goods are concerned they have very broad range of businesses in industrials sector
1.2 The procurement
process ( aankoopproces)
Industrial consumer process.
2
, - Purchasing: buying goods to satisfy organizational needs. Buy goods you check the invoice
and you pay the invoice.
- procurement: not only transactional buying but selection of sellers, establishing payment
terms, risk management, contract negotiating. More like business management function
rather than transactional work you are doing.
Procurement = the action of obtaining or procuring something, selecting suppliers
and negotiating, quality assessment, paying conditions
- Sourcing: who is the right supplier for our business. Supplier selection.
We will use purchasing and procurement interchangeably = inkoop or aankoop.
1.2.1 some changes in the procurement process require rection from the
seller
Changes which have triggered a reaction from the seller
1) Status of the purchaser > increased authority for the seller
- Status of the purchaser has increased: in the past the buyer was a secondary occupation of
logistic occupation. Strongest occupation was sales, but companies started to realize it was
the buyer (purchaser) who is the first one to go outside the company and bring in new
information. Increased purchaser means higher profile, education,.. don’t send junior sales
people to negotiate your contract.
Today we send more high profiled people to buy stuff no longer a junior manager
with no experience = they have more authority.
- Status of purchaser has grown a lot, it was just an extra, first contact with the outside world,
now the buyer is the first entry of information, it’s a real salesperson, a strong senior
salesperson, in the Netherlands they go in group/ team and combine their expertise, in
Belgium just one salesperson, but this also changes here
2) Central procurement > specific approach for ‘large accounts’
- Central procurement: in big groups you see this. This means that subsidiaries of the same
group work together and buy their share needs together. E.g. Nestlé: the purchases are done
at the head office for all the subsidiaries and whole nestle group in EU.
3
, This means bigger volumes, often means heaving stronger bargaining position. You
can also no longer send and unexperienced sales person to a central procurement
officer. You have to have a specific approach for large clients/accounts. Accounts get
so big you can’t lose them.
- They group together as one central buying organisation (e.g. Nestle in Geneve), why? Shared
needs, economies of scale, stronger marketing position, a group of companies that belong to
the same family. If you send someone, you need a senior. You need shared needs (packaging)
3) JIT and consequent increased quality requirements > ‘certified’ quality
- Most companies focus of JIT = you can no longer except errors in your production KAIZEN
LESSON. You can just filter them at the end you need to avoid them at all times. The quality
of the input of raw materials needs to be much better than before.
And we see more need for certified quality that means that the third company will
come to your factory and certify that you work in high quality way. You can show this
certification to your clients which proves that you are a safe supplier.
In Europe you can no longer supply a supermarket, unless you have such a
certification. You have specialized companies in this ( quality audits) = bureau
veritas. It is costly and time consuming but it is prove to your client that you have
everything under control.
NASA = certified quality came from this. : how can we be sure that astronauts have
safe food. That they don’t get sick in space. So they developed in the 60s the HACCP
principles. Hazard analysis and critical control points. Today you see that HACCP are
valid all over the food industry. They have to apply this principle.
Also companies outside food sector have to work with HACCP. Example: HACCP for
meat processor, if your eat raw meat you get the risk of salmonella, you can avoid
the hazard of raw meat by cooking but then you need critical control points. You
need to be aware about the temperature of your meat processor. You need to be
sure that the thermometer works and is changed in time. A whole change of actions
is needed to make sure that your food is safe.
4) Fewer suppliers > ‘relationship management’
- Need to have fewer suppliers with whom you have a stronger relationship with. The buyer
seller relationship evolved more into a partnership.
That requires special attention. Giving someone the cheapest price is no longer
enough. You need to work on your relationship management. Need to satisfy them
at all time.
Typical for large companies: focusing on commercial management
In-supplier he’s already in and supplying already, suppliers who are already well known to an
organisation and from whom they will purchase with confidence.
Out-supplier third party that has nothing to do with the buyer, suppliers with whom the buying
organisation has not had dealings previously and therefore considers risky.
New task and modified rebuy are tricky for you in-supplier
Try not to get forgotten in your sector
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