Share is tougher to shift
Symptom: Competitors report that market share is becoming more difficult to shift as customers have consolidated their volume in the hands of current suppliers.
Implications for the market:
As hostility progresses, customer-supplier relationships will become much less volatile.
- Supplier consolidation increases the pressure on competitors to gain and maintain volume. Competitors will struggle to meet the industry's high operating standards and still remain profitable.
- Inevitably, some fail. As a result, customers encounter inconsistent service and product performance.
- To avoid further disappointment, customers will begin to rely more exclusively on their tried-and-true suppliers, and will risk new competitors less often. As hostility advances, volume continues to shift among a customer's "old faithful" set of suppliers, but not between established and new suppliers.
The importance of an established customer relationship will increase proportionally. Long-term customer-supplier relationships -- always a substantial competitive advantage -- will become even more valuable.
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Perspectives: Conclusions we have reached as a result of our long-term study and observations.