For previous articles in the “Trading War” series, click here.
The purpose of “going to war” is to move your counterparts from an entrenched negotiating position by force. It means you will be taking specific actions that will temporarily damage your counterpart’s business or competitive position, with the intention of forcing them to reopen negotiations on a more favourable basis. It will almost certainly damage your relationship too, so it must offer a high value, long-lasting benefit.
The first step is to choose your weapons: identify the things you can do to put most pressure on your counterpart directly or through others in their organisation. Look at each of these five areas and identify what you could withdraw, or give to a competitor, that would damage them significantly more than it would damage you.
1. Products: Which products are most critical to your counterpart? Be sure to understand which products customers would go to another retailer for, and which they would just switch to another brand.
2. Services: What other benefits do you currently provide to your counterpart that would damage them if you stopped?
3. Opportunities: What launches, promotions, advertising, consumer activity etc. is in your gift, that they would be loath to miss out on?
4. Information: Do they rely on you for any critical information?
5. Contact: How much contact do they have across your business and what impact would it have on them if that were to change?
In the next article I’ll cover how timing and planning can increase the pain for them, while reducing the damage for you.
ALWAYS: Be crystal clear on how far you’re prepared to go, and what impact on your business you’re prepared to accept
NEVER: Make threats without knowing how you will justify them, execute them, live with them and recover from them