Paweł Biarda comments on a case study in June’s edition of HBR
In the latest issue of Harvard Business Review, President and Partner to Carrywater comments on „Divorce with a deficit client” case study.
The case study describes dilemmas of a company, which after a detailed analysis of decrease in profitability causes discovers that one of the reasons is that the cost of servicing certain customers is much greater than profits generated from them. This applies in particular to the company’s largest customer, bound by long-term business relationships.
What to do in such situation? Terminate the relationship, negotiate prices, include marketing and image factors in economic analysis? – advises Paweł Biarda, President and Partner to Carrywater. He takes unequivocal position: (…) Terminating a relationship with a customer that generates large part of turnover and is bound by long-term business relationships is the last resort. It is worth attempting to develop mechanisms and cooperation rules together that will allow to optimize servicing and improve profitability. (…)