Know the Business Value Chain

Business Value Chain

 

Know Your Business Value Chain to setup your Business Cooperation

Your understanding of your Business Value Chain will help you to manage and setup your Business Cooperation. Knowing your Business Value Chain will aid you in understanding Value add, risks and gains as well as the natural fit of your Business Partner.

It is though a great difference between technology sourcing into your product and a technology interoperability setup for marketing purpose.

You need to prepare yourself for the cooperation by analyzing the value chain and decide the type of cooperation you are looking for based upon the value add.

When you later explore candidates for your cooperation, you need to short list the ones matching your criteria for the Value Chain and your wanted Business Relationship.

Let us look into some Business Value Chain and the corresponding Cooperation types.

Business Value Chain and Cooperation types

Technology Sourcing

Technology Sourcing is the relationship when you integrate a product from another company into your product. The product will have your name and you are fronting the market. This means that you will be the main responsible entity.

In this case you need to secure with the support of the supplier matters like product evolution and quality, trade compliance, infringements and continuity of supply.

Given all your responsibilities as well as the risks you are undertaking, you need a fair share of the revenue as well as a payment setup aligned with your cash flow. In addition you need to secure proper management procedures in place at the supplier to support you.

Reselling

Reselling is the relationship when you add a product from another company to complement your product. The product will have the Suppliers name and you are fronting the market. This means that you will be the main point of contact but share responsibility with your supplier.

In this case you need to secure with the support of the supplier matters like trade compliance, sales support, support, supply and continuity of supply.

Given your responsibilities as well as the risks you are undertaking, you need a share of the revenue as well as a payment setup supporting your cash flow. In addition you need to secure proper management procedures in place at the supplier to support you.

Market Cooperation

Market Cooperation is the relationship when you link a product from another company to complement your product. The product will have the Suppliers name and they are fronting the market for their product. This means that you both will market the solution but you sell separately to the customers.

In this case you need to secure with the support of the supplier matters like interoperability, aligned releases and marketing. You may also look into the infringement scenario depending on your position on the market.

You need to settle how the costs for interoperability and any use of the products involved for demos should be taken.

Technology Cooperation

Technology Cooperation is the relationship when you link a product/technology from another company to complement your product. The product will have the Suppliers name and they are fronting the market for their product. This means that you both will market the technical interoperability but you sell separately to the customers.

In this case you need to secure with the support of the supplier matters like interoperability and marketing. You may also look into the possibility of any innovation in the cooperation and how to handle this.

You need to settle how the costs for interoperability testing should be taken.

Conclusion

One size fits all doesn’t always play and with respect to business relationships and cooperation you should select the setup that fits your Business Value Chain.

Some more advice (Links)

Increase Innovation by Leveraging Your Ecosystem

Credit: Tolpagorni

Understand the Business Value Chain! Video [2 minutes]

Image credit: Pixabay/geralto

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