Sarah Talley Case

1. What kind of person is Sarah Talley?

Smart

Bold and confident

Good communication skills and people skills.

Sheer tenacity - Not taking "No' for an answer.

Young and dynamic

Visionary & Leadership

Excellent understanding of the operational details of the business.

Perseverant

2. How should Sarah go about to protect and grow her business with Walmart - list the NAB Approach Strategy and Steps that you would recommend to her based on your learning from the program?

Sarah has two issues in hand.

(i) Short term - Negotiating Fourth Of July Watermelon Prices

(ii) Long term - Growing the relationship by becoming a co-managed supplier.

Negotiating the Fourth Of July Watermelon prices

In spite of explaining the fact that adverse weather conditions, abnormally high pest and disease exposure has beset the watermelon industry and the situation is fairly same for all the local producers, the regional buyer seem to insist on an unacceptable low price stating that conditions will change dramatically in June.

Sarah Talley should have a contingency clause in her contract stating that if conditions do not change, then Wal-Mart will accept to procure the watermelons at a higher price than quoted in the contract. Sarah Talley should assure that the prices of Frey farm will still be competitive in June even though Wal-mart ends up paying a higher price than that of what is quoted in the contract.

The indicators of change in conditions can be objective - Market price of watermelon during the month of June, Statistics on the expected yield may be good numbers to start with.

Growing the relationship

Sarah Talley's request for co-management was resisted by a Wal-Mart category manager who stated that co-management is for mega suppliers and it is an investment in time, people and money. Here are some points on how Sarah Talley can overcome the resistance and go ahead with her negotiation with Wal-Mart to become a co-managed supplier.

Mega Suppliers as Co-Managers - Not Strength but Weakness

Wal-Mart is passionate about Every Day Low Prices and strongly supports the endeavor of keeping costs low. Wal-Mart believes that by making mega suppliers as co-managers it could achieve its objective. The very strength of having mega suppliers as co-managers is becoming weakness of Wal-Mart.

Co-managed suppliers incur extra costs such as inventory management, staff and management systems that we did not have. Mega co-managed suppliers