Indian institute of management Kozhikode

Managing business markets

ABB-CATERPILLAR
GROWING CUSTOMER SHARE

arvind
1. Why was Caterpillar planning to discontinue relationship with ABB?

 Even though, ABB was delivering the right products what the customer needed, they
failed to maintain the customer relationship as a supplier.

 The handshaking between the buyer and seller was not felt pleasant.

“It is ABB, that will tell you when will you get what product and how much you
will have to pay for them”

 An element of arrogance and dominance was expressed by the delivery team of ABB
to the customer resulting in disconnect

 Dictating price to the customer in hard tone that they feel the supplier is

 BU is not in alignment with GAM in terms of customer relationship.

2. What changes are required in both procurement and selling to rebuild the
ABB- CAT relationship?

 Internal Synergy: BU & GAM should resolve the issue inside ABB and try to solve
caterpillar issue together by coordinating the buying and selling actions of the BU.
The organisation structure and culture inside ABB needs a refresh.

 Co Creation of Value: The buyer is in need of the products and the seller has
the value. But what is missing is co creation of values which needs to be fixed.

 Steering Committee: The common pool of members with intentional

interactions to build relationships will mitigate mis-understandings.

 Customer Oriented programs: ABB is supposed to take measures to integrate

customers and their experiences by better communication and feed back systems.
This will help them retain business

 Network oriented Approach: Incorporate network-oriented approach to

improve upon customer relationship by avoiding misconception and transparency.

 Training of BU: They must be systematically trained on collaborative approach

to look into the varied needs of caterpillar prior to superimposing their delivery
features and pricing options.