Reference no: EM132774334
Muccio came out with actions to renegotiate the P&G and Wal-Mart relationship and had grouped them in 6 categories. The primary action is to stay close to each other in order to understand the culture and real interest of both parts to build a trustful relationship. Second action is to negotiate a larger joint vision regardless of small disputes that used to break their relationship. Furthermore, reshaping the negotiation by figuring out each side's interest rather than their bargaining power. New Money approach based on aligning incentives and sharing information. Finally the last two action are building trust between the two parties and hammering out the formal and legal document and base their agreements on social contracts that reflects the new nature of their relationship.
On the other hand, we recommend both parties to take other actions in order to achieve and maintain these new actions that trait the relationship between the two parties. Both parties sharing information about basic business activities such as procurement, inventory planning, and systems used will enhence an amical relationship . Furthermore, before negotiating any business transaction, both parties should make sure that the end user would benefit as much as they will. This way both of them will ensure a constant or increasing demand for products they are selling. If any future conflict arises, no one should blame the other but work together to resolve it.
We believe that Information technology is key to build and keep a sustainable share of data and information between companies and channel partners. In order to achieve what Tom Muccio defined as "content that flows through the pipe "(Muccio,1987) that "hooks P&G together with Wal-Mart" (Muccio,1987), the two companies should reshape their supply chain dynamics in a way to be ready to integrate electronic and automated IT solution. With that being set, activities inside the two companies' channels will be coordinated and consistent. According to the case, P&G and Wal-Mart have achieved a strategic partnership based on trust, meaning, the two companies are willing to share valuable and sensitive data, IT solutions will ensure this data to flow between the companies and a safe and secure way. Ultimately, this will create value to both companies, as it will cut costs such as transactional and inventory cost and increase sales as effective information flow will allow companies to better understand the end consumer need which will greatly contributes to the overall performance of both companies. With that being said, IT solution will create a common language for the two companies to better communicate with each other.
Other recommendation that we considered, P&G and Wal-Mart can partner with a third party logistics, or outsource warehousing and transportation to a third party in order to insure just-in-time transportation, delivery and inventory . That way, the two companies would focus more on their core competencies.