Page 243 - Performance Leadership

232 • Part IV Implementing the Performance Leadership Framework

shows how performance indicators in supplier/customer relationships
differ per type of relationship.

Case Study 1: EnGen

9
EnGen (a fictitious name ) is a manufacturer of generic car parts, such
as parts of engines, windshield wipers, car chair covers, and so on.
EnGen sells through retail chains, but mostly through independent
garages. EnGen has a difficult position, end-consumers are not really
aware of the brand, and garage holders mostly care about profit mar-
gin. Price competition would build preference from the garages, but
there will always be a supplier who is willing to discount more.
The traditional approach, witnessed in many different industries, is
based on the classical focus: “How do I optimize my own perform-
ance?” EnGen would start to build a brand preference with its target
audience, whereby consumers would ask the garage for EnGen parts,
instead of just for generic parts. This would be a multiyear effort at a
considerable cost, and the return on investment would be uncertain.
Asking how EnGen could optimize the performance of its complete
performance network, and how the stakeholders would help improve
EnGen’s performance, leads to an entirely different, more effective,
and much more economic approach. EnGen realized that in order to
be successful in building loyalty with the garages, while maintaining
high margins, it needed to find a way to make the garages more suc-
cessful in the market. See Figure 12.5.

F igur e 12.5
EnGen’s Performance Network

Traditional
approach

EnGen Garage Consumer

Reciprocal Loyalty
approach Program