B2B markets are evolving rapidly toward an information era, where both buyers and sellers have increased information, which changes the nature of competition.
The industrial revolution was based on information asymmetry; one side of the relationship had more information than the other. In the present era of information ubiquity, both buyers and sellers have increased information about each other. These changing conditions are reshaping how companies in B2B markets go-to-market and more companies recognise the power of building a strong buyer-seller relationship to improve the business efficiency, resulting in lower costs and higher profitability to both the buyer and seller. The key value drivers/needs in B2B markets, is most often seen to be; optimise processes, increased access to knowledge, available IT systems & services, lowering of costs/ time-to-market, increase revenue to build a sustainable competitive advantage.
B2B relationships are becoming an imperative aspect to stay competitive in a fast moving competitive marketplace. A firm’s ability to survive in a competitive market is to some extent based on its business relationships and their combined resourcefulness in creating sustainable competitive advantage, to which they seek to exploit each others capabilities.
In today’s competitive and complex business environment, it is no longer enough to be product, price and market oriented; companies in B2B markets must attempt to deliver two types of value; 1) build relationships with business customers 2) collaborate with them through value creating capabilities.
The computer chip producers, LSI Logic Corporation and VLSI Technology, provide their business customers with ‘do-it-yourself’ tools that enable customer-chip-based manufacturers (e.g. toy manufacturers that need circuitry in their products) to design their own specialised chips, thus taking the custom computer chip market from virtually nothing to more than $20 billion. Another examples is Rolls-Royce, who competes not just on its ability to build airplane engines, but collaborate with airline companies to establish a close buyer-seller relationship, to which co- creation of value is accomplished across a range of products and services. Equally companies such as IBM and General Electric have developed specific capabilities necessary to design, produce and integrate their offerings to ensure performance, relationship and co-creation of value, delivered to individual customer's business requirements and needs.
Today companies in B2B markets must aim to provide solutions and create superior value for its customers, rather than offering simple stand alone products or services. This can also be called 'mutual development', that represent the willingness of both seller and buyer to share information, technology and/or products with the intention to effectively enhance each others’ competitive advantage in the marketplace, which ultimately build the buyer-seller relationship.
Companies in B2B markets must recognise the need to re-programme how they look at their competitors and instead see them as potential partners, contributors of know-how and ressources that can be of great value if mutually exploited.
"Competition makes us faster, collaboration makes us better"
All the best,
Camilla
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