The Challenge: Our client supplies a major technological component to its largest customer in a relationship that involves numerous other products and spans three continents. While there were many positive dimensions to this strategic account, the spotlight was unfortunately focused on the price of the supplier’s technological component. Margins were declining as a result of this focus, and the customer was resisting new concepts and technological innovations.

Assessment: Blue Canyon developed insights into the markets served by our client and its customer, and was able to identify several significant unmet needs that were not being addressed. These insights emerged from an in-depth investigation of several stages far along a long-complex customer chain that began with our client and its major customer. Working with our client, we developed prospective responses to these needs, augmenting these ideas with a strong business case explaining how our client and its major customer could achieve significant success by targeting these opportunities.

Strategic Solution: Our client presented the ideas to its major customer and spent time sharing the insights and origins of the ideas that had been developed. After several interactions, the two firms agreed upon a game plan to collaborate and pursue the new opportunities. Our client also introduced several strategic concepts that had emerged from our work with its customer. One such idea involved a new concept that had the potential for a significant cost reduction, allowing both firms to realize higher margins, even in the face of ongoing price pressures in their markets. A second concept which this supplier brought to its customer offered the potential for a price reduction in exchange for actions that allowed our client to reduce the variants in the product lines which it was supplying this customer.

Results: The focus of the relationship has shifted. New growth opportunities and opportunities for collaboration to improve margins are now the main points on which the two firms interact, rather than on price alone.