The Lever of Alternatives

Quantity and Quality of Alternatives

Those who do not have to conclude a certain negotiation with a certain partner are at a huge advantage. Those who rent out a flat in Berlin have an easier time than those who are looking for a flat. Whoever offers something that many would like to have has an advantage when negotiating – the law of supply and demand. A boss who has to accommodate an unpopular extra job in his team of employees will get the job done faster if several employees are qualified for the task.

If the boss changes the structure of his offer, he expands the field of possible negotiating partners. If the boss splits the task into different sub-projects, more employees will be eligible for a sub-task. Perhaps he can also approach the topic in a completely different way instead of having a full report prepared, but only a short presentation with a few key points. Then he might not need a specialist any more, but someone from the assistance area could do it.

Or the whole project is completely outsourced to a specialized agency. For example, a marketing agency develops the new packaging, the appropriate slogans and all the corresponding marketing activities. Or the boss simply takes on the task completely himself.

Work on the “alternatives” lever:

With a certain vision of the bigger picture, an alternative that is available more or less quickly (compare the section Lever Time) can be found in almost every situation. In contrast to improving the information base, the issue of improving alternatives requires much more time and often other resources. Regarding the involvement of the marketing agency, this can increase the quality, but it takes time to select and brief the agency. And the agency will incur additional costs.

The lever of alternatives in procurement:

  • Do I have alternative suppliers for the same product?
  • How flexible am I about the product? (Apple pie instead of cherry pie for dessert?)
  • How flexible am I regarding a different solution approach or technology? (Ice cream instead of cake for dessert? – A plastic part instead of a metal part?)
  • What about when I think in larger units? (The whole menu is delivered by the catering service? – A whole module is contracted out to the supplier not just individual parts?)
  • What if our company positions itself differently in the supply chain? Is there more competition in the market for input products (standardized mass product?)? Under what conditions could we manufacture the product ourselves from the intermediate products? Could I outsource the intermediate products to contract manufacturers for further processing stages? (Buy a whole cherry orchard and cultivate it or lease it out).

The lever of alternatives in sales:

  • How stable is the inflow of new customers?
  • What products for other sales markets or customers can be manufactured on the lines?
  • To what extent can we shut down production capacities without major costs? (No longer use temporary workers? – Bring outsourcing back into the company? – Sell machines?)

Where do we position ourselves differently in the supply chain? How costly is it to map the customer’s value chain stage ourselves and compete with the customer? Should we withdraw from one stage of the value chain and rather produce highly efficient, low-value parts and sell them to other markets (high volume of standard parts instead of small quantities of highly customised products)?

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