International Business Case Study

The first part of the paper exhibits the drivers of Global Account Management (GAM) and Schneider’s reasons to apply this approach. Part two discusses issues regarding the successful implementation of a global account.

The drivers of GAM can be analysed by using Yip’s (1992) framework of globalisation drivers. The industry globalisation drivers accounting for GAM are: market, cost and competitive drivers (Stonehouse, Campbell, Hamill, Purdie, 2005; Anonymous 2000).

The strongest driver is the increasing significance of global customers and their global needs. The understanding and satisfaction of the global customer needs is crucial in order to build long-term customer relationships and to avoid the inroad of competitors (Yip, Madsen, 1996; Harvey, Myers, Novicevic, 2003; Czinkota, Ronkainen, 1997; Wilson, Weilbaker, 2004; Birkinshaw, Toulan, Arnold, 2001).

Coming from a decentralised purchasing behaviour, multinational companies strongly move towards a centralised sourcing in order to achieve economies along the supply chain, enhance the compatibility of equipment and seek uniform global prices and terms of trade (Yip, Madsen, 1996; Wilson, Weilbaker, 2004; Birkinshaw et al., 2001; Montgomery, Yip, 2000; Czinkota, Ronkainen, 1997). Fast changing Technologies and short product life cycle’s force up companies R&D costs. Organisations try to amortise their high development costs by spreading them over several markets (Yip, Madsen, 1996).

The strategic moves of key rivals drive GAM. Competitors exploit globalisation potentials and establish global strategies, e.g. GAM, which forces the other participants in the industry to react – either by adopting a strategy or by developing a counter strategy (Harvey et al., 2003; Yip, Madsen, 1996).

Aware of the increasing global challenges, Schneider recognised that in their industry customer relationship management is the key to competitive advantage. They understand that long-term customer relationships are only achievable if the company can consistently satisfy the global customer needs by delivering quality and highly customised products. Their approach goes to such length, that they try to shift towards a client-led manufacturing. This highly customer-focused approach forces Schneider to have a deep understanding of the customer needs. GAM enables Schneider to work closely together with its global customers and helps Schneider to get a global understanding of the technology and development needs of their customers. Schneider used GAM to increase the exit barriers (high switching cost) for their customers as well as the entry barriers for their competitors (Anonymous 2000; Yip, Madsen, 1996; Kotler, Brown, Adam, Armstrong, 2001).

The development of individual, team and organisational competencies in regard to relationship management is essential for a successful implementation of a global account.

The effectiveness of the global account is strongly linked with the account manager’s skills and competencies e.g. cross-cultural management, change management, team management, leadership and networking. Schneider has to make sure that the right managers are in place and has to train and educate them regarding the requirements of GAM (Montgomery, Yip, 2000; Wilson, Weilbaker, 2004; Yip Madsen, 1996; Anonymous, 2000).

Support staff and facilities are essential for the successful management of a global account. The account manager will manage a global team and is in permanent exchange with the support facilities e.g. Schneider’s headquarter. Schneider has to put global information and communication systems in place in order to enable global networking and information sharing (Montgomery, Yip, 2000; Anonymous, 2000). The involvement of top management in GAM is crucial. On the one hand executive sponsorship will help Schneider to educate and qualify the global account manager’s. On the other hand the involvement of top management in GAM will signal its importance towards Schneider’s stakeholders (Wilson, Weilbaker, 2004).

Schneider and Calchem should undertake a mutual feasibility study of GAM. Strategic consistency (e.g. time perspective, objectives), expectations regarding e.g. cost savings, benefits or growth, support systems (e.g. planning, computer technologies, control systems) and the industry structure must be checked up-on congruence’s between the two partners. A high level of consistency in these areas will make the co-ordination and co-operation between Schneider and Calchem successful (Harvey, et al., 2003).

Commitment to GAM on Schneider’s operational, tactical, strategic level is crucial for the successful implementation of a global account. GAM is based on effective relationship management which is characterised by vital two-way relations and high commit- and involvement on multiple levels in both organisations. Continuous flow of information and feedback between Schneider and Calchem and vice versa, e.g. by implementing customer panels, councils and regular meetings, will lead to strong performance of the global account (Montgomery, Yip, 2000; Birkinshaw, et al., 2001).

A reliable reporting process about the performance of the global account must be installed by Schneider. The reporting process must evaluate performance data, e.g. revenue, profit or customer satisfaction, on a global basis. Schneider has to implement global performance measures (Montgomery, Yip, 2000; Wilson, Weilbaker, 2004).

References

Anonymous, 2000.  Schneider Electric Global Account Management. International Institute for Management.

Birkinshaw J., Toulan O., Arnold D.,  2001.  Global account management in multinational corporations: Theory and evidence. Journal of International Business Studies, 32:231, 18 pgs

Czinkota M.R., Ronkainen I.A.,  1997.  International business and trade in the next decade: Report from a Delphi study. Journal of International Business, 28:827, 18 pgs

Harvey M., Myers M. B., Novicevic M. M.,  2003. The managerial issues associated with global account management: A relational contract perspective. The Journal of Management Development, 22:103, 27 pgs

Kotler P., Brown L., Adam S., Armstrong G.,  2001. Marketing, 5/e, Pearson Education: Frenchs Forest.

Montgomery D.B., Yip G.S.,  2000.  The challenge of global customer management. Marketing Management,.9:22, 8 pgs

Stonehouse G., Campbell D., Hamill J., Purdie T.  2004. Global and Transnational Business: Strategy and Management, 2/e, Chichester: John Wiley & Sons Ltd.

Wilson K., Weilbaker D.,  2004.  Global Account Management: A Literature Based Conceptual Model. Mid - American Journal of Business,19:13, 9 pgs
Yip G.S., Madsen T.L.,  1996. Global account management: The new frontier in relationship marketing. International Marketing Review, 13:24, 20pgs