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Starbucks and I.B.M. Help The Smaller Fish
By Marc Tracy
The New York Times runs not one but two stories highlighting ways in which big and small businesses can create a symbiotic, mutually beneficial dynamic, rather than one in which they are constantly at odds.
One article describes how the owner of KIND Snacks strove to, and inally succeeded in, getting Starbucks to sell his fruit and nut bars (which are bound together by honey, rather than an artificial paste, and are therefore healthier and more organic). "Big product makers have a clear advantage" in getting retailers to sell their goods, the article reports, "because they can usually offer multiple product lines at lower prices and already have inventory management systems in place. Smaller companies must compete on price with major brands, but also be unusual enough to make them worth the retailer’s investment."
The second article describes programs that several large corporations--the piece mentions I.B.M., Wal-Mart, Proctor & Gamble, and Home Depot--offer that involves their executives mentoring small businesses that are involved in the larger company's supply chain. Beyond such programs, there exists among some of the world's biggest businesses a broader commitment to including all sorts of companies in their supply chains: witness the Billion Dollar Roundtable, a group of 16 huge corporations (IBM, Boeing, General Motors, Lockheed Martin, and, yes, Wal-Mart) that do at least $1 billion's worth of business per year with women- or minority-owned firms.
What we like so much about the articles, and the broader dynamic they describe, is that the big companies' attitude toward the smaller ones is decidedly not charitable. Starbucks expects those KIND bars to sell well, and if they don't, they're probably gone. The companies that offer mentoring programs want to ensure that the companies on the other end of their business transactions are well-run and reliable out of self-interest.
There is, additionally, an interesting branding dynamic at work here, we'd argue. In offering those KIND bars, Starbucks is doing more than trying to turn a per-unit buck--indeed, given that the bar is a finished product purchased wholesale from another company, there is no way Starbucks is making that much of a profit selling these bars at only $1.95 apiece. Rather, they are aligning their brand with a small business, and what's more with one that promotes an active, healthy lifestyle--something that is very in right now, and that the famed purveyor of $5 cappucinos could use a bit more of an association with. One of the companies that an I.B.M. executive mentors is owned by a gay man, and I.B.M. touts its participation in the I.B.M. program as a part of the multinational's outreach to LGBT-owned businesses.
It's not cynical; it's smart business. And it shows that the big corporations need the little guys, too.
Comments (0)July 1, 2009 6:01 PM
