Kirk Klasson

Bargaining Power

Last year, when super-CEO Jack Welch described General Electric’s new Internet exchange business, he trumpeted the company’s increased leverage over its suppliers.

He missed the point. Bilateral leverage is only part of the equation.

For many otherwise smart business leaders, the sheer complexity and fluidity of todays New Economy has muddied the notion of the exchange of value. Although they’ve grown up with the concept of bilateral trade – between supplier and purchasing agent, for example – and although they’ve been able to keep up with the idea of basic eMarkets, they’ve lost sight of how bargaining power affexts entire networks of business entities.

Jack Welch, along with countless other executives, may have missed a crucial point. The Internet takes the exchange of value from a local plane – entity-to-entity interactions – to a constantly shifting network of trading maneus. It converts the potential energy locked inside networks of business relationships into the kinetic energy that characterizes bargaining power today.

The real potential of Internet exchange mechanisms has less to do with one trading partner’s ability to extract an advantage from another and much more to do with the ability of the entire value-creating network – buyers, sellers and trading communities – to appropriate bargaining power.

In this white paper, Cambridge Technology Partners lays out three distinct contexts in which bargaining power must now be viewed. And we make the case that a new skill is needed; we call it “network leadership”.

This is where you start to understand what it takes to apply bargaining power to best effect – and to become a network leader.

To view the full Bargaining Power White Paper Click Below:

4 Comments to "Bargaining Power"

  1. Jeff says:

    What a neat arlcite. I had no inkling.

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    • Kirk says:

      Thanks for the note. I don’t link to anonymous blogs. If you like to send me a link to your site maybe we can talk further. Thanks

  3. eastlandgrl says:

    interesting, thanks

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