What is global account management?
Global account management emerged as a major topic for the grocery industry in 1999/2000, as a direct consequence of an acceleration of retailers’ international expansion. Since then, it has been evolving and rapidly gathering pace, and today most of the leading multinational suppliers have set up a global account management team to service global trading relationships with their key accounts.
These teams manage the key retailers on a top-to-top basis, negotiate international contracts with retailers and look to create a more co-ordinated business-wide approach towards these customers across all markets.
There are two key aspects to global account management:
- The term global account management itself can be defined as the internal account management structure that facilitates international best practice transfer and customer knowledge within a supplier.
- The global trading relationship between a supplier and a retailer on an international level, where both parties have dedicated resources to manage the relationship.
The transition curve of global account management
As with any change that a company has to undergo, the implementation of global account management can be mapped out on a transition curve. From the research carried our by IGD, there are many common actions and re-actions which a supplier engages in over this period of evolution.
Although on average, suppliers will allow 5 years to reach a point where they feel they are effectively managing their key accounts globally, there is no set time frame which covers the full extent of the learning curve, indeed the end stage is only a viable option for a handful of suppliers.
The speed at which suppliers will travel along the transition curve will also vary considerably. The factors governing this can include:
- Size of the company
- Level of support from the Board
- Financial resources supporting global account management
- Level of decentralisation
- Expansion history of supplier (acquisition or organic growth)
- Company culture
The five stages of development that most global suppliers will go through, whilst establishing global account management are summarised on the following chart.
Transition curve of global account management
Source: IGD Research
Future evolution
IGD research indicates that global trading relationships will continue to evolve as both retailers and suppliers decide how to develop their strategies. IGD believes that there will be a greater polarisation of retailers and suppliers in the area of global account management in the future. As a result, IGD has used the transition curve to developed three future scenarios of global account management:
- Back-tracking
- Focus on facilitation
- Moving to the next stage
It should be noted that these scenarios are not mutually exclusive. A given retailer or supplier may follow a different scenario with different categories of trading partners.
For example, a large multinational supplier may decide to “move to the next stage” with selected customers, while “back-tracking” with those which do not offer sufficient potential. Likewise, a major global retailer will develop different types of relationships with various suppliers.
