Even the strongest supplier relationships can be tested by procurement policy. In this SAM/KAM mini-case, Components GmbH — sole supplier of a high-performance sealant — uncovers a serious safety issue for their customer, KFG. They propose a solution using a new capability from a recent acquisition.
But instead of fast-tracking the proposal, KFG triggers a company-wide procurement policy: an on-line reverse auction to test the market. Components GmbH must now balance partnership principles with competitive realism, and prove their solution is still the best fit — without racing to the bottom on price.
Scenario Summary
- Components GmbH offers a proprietary high-tech cleaning solution that perfectly meets the client’s need
- KFG insists on competitive tendering via an on-line reverse auction
- The account manager must navigate this process without sacrificing profitability or value positioning
Recommended Response Strategy
- Shape the specification — influence the criteria to favour your solution’s strengths
- Use insider knowledge — align tightly with KFG’s known needs and expectations
- Stand firm on price floor — don’t win business at a loss just to retain a client
- Provide added-value evidence — justify differentiation with data and proof
Strategic Takeaway
- Reverse auctions test your preparation, not just your price
- Account managers must be skilled in influencing specifications and value communication
- “Partnerships” still require formal proof under procurement rules — plan for both
Insight
“True value partners win even in open tenders — not by slashing price, but by owning the spec and proving unmatched fit.” – Professor Malcolm McDonald
Download the Mini-Case
This summary outlines the scenario and strategy, but the full PDF includes the narrative, discussion prompts, and recommendations for responding to market-testing pressure.
Reproduced with kind permission from Dr Beth Rogers.