Working with one ' s own distribution is particularly an option if the sales activities require little shop or office space , the work can easily be scheduled , and extensive travel is unnecessary . In virtually all other cases , working with distribution partners or franchisees will be a cheaper option , even if these partners only spend part of their time on the product portfolio .
From the distributor ' s point of view , the value of an ( exclusive ) partnership with a supplier is that it enlarges his portfolio ( for the quantification , see next paragraph ), it offers better marketing and sales support , and it enables him to set up a good purchasing process . The advantages for a franchisee are even greater : he can participate in a comprehensive and proven shop concept , will receive coaching in his operational management , and only needs to concentrate on local marketing and sales . This does come at a price , however , as will be discussed in Chapter 4 .
Proposition alignment and collaborative offering
Portfolio management is an important means of increasing your relevance for a target group . By including more special , complementary or even lower priced products or services in your offer , you are substantiating your brand promise . However , this need not necessarily be the offer of one single company ; if two or more suppliers decide to align propositions , or to refer to each other , or to collaborate in the offering , they can achieve greater relevance for their market .
Yet to remain relevant , it is important that the portfolio displays some measure of synergy . Thus , it wouldn ' t make sense for McDonald ' s to start selling vegetables , but it would if they started offering veggie burgers . Also for a company like Office Depot , portfolio management constitutes the core of their marketing policy .
By choosing for one or a few alternatives at most , rather than selecting all products , the customer is offered a pre-selection . This saves the customer from making complicated choices , and regardless of the precise purchase , the quality is satisfactory . Combined with the availability of the products and the certainty of not needing to go somewhere else afterwards , this makes Office Depot a relevant party for many entrepreneurs .
Portfolio management also applies at a larger scale , when choosing in what activities the company should invest . Thus , the Boston Consultancy Group portfolio matrix concentrates mainly on market growth and market share in a certain activity . This activities portfolio need not be relevant for the customer , however , so there is little of synergetic value for shareholders here . A company should therefore seek products and services that represent a relevant and mutually reinforcing combination for customers .
Entering into a partnership may be an attractive alternative to developing and producing or purchasing and reselling a product or service inhouse .
If two businesses decide to align their portfolios and to refer to each other , this may represent added assurance for the customer : he may assume that the supplied products or services are compatible , or that he will , at the very least , be informed of any necessary adjustments . This assurance is of value to the customer , and may thus justify a higher price .
An alternative would be to calculate how much it would cost the company to purchase the goods or services directly and to resell them . In case of goods one should also consider the costs for storage and
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