A KEY ACCOUNT MANAGEMENT RESEARCH AGENDA FOR CHINA
pp.816-817
Following more than thirty-five years of ten percent per annum growth, China is now the second largest economy in the world (Worldbank.org, 2014). Although some cooling has occurred in the past few years, China’s continued growth, expanding middle and upper classes, increasing tendency to follow the rule of law (accelerated by WTO entry in 2001), and a seemingly unlimited labor pool coupled with modest wages, have motivated entry by businesses from around the world. The result? China is an intensely competitive environment, with global companies battling each other for securing supply chain partners and/or developing Chinese domestic markets. And, the competitive battle is not just between global brands. Chinese companies, including State Owned Enterprises (SOEs), are intent on modernizing operations and changing business practices to be able to earn customer loyalty in both domestic and global markets.mostly focused on practices in North America and Europe. Meanwhile, KAM is on the rise in China, with Non-Chinese (WOFEs and JVs) and Chinese suppliers developing KAM platforms. KAM is a system of customer-driven resources dedicated to achieving profitable growth by providing special personnel and/or special activities to an organization’s most important customers (Homburg, Workman, & Jensen, 2000). Through KAM, there is the expectation that vendors benefit (Stevenson, 1981), enhancing profitability through appropriate resource commitments and effective value-based pricing (Ryals, 2006) and through greater switching costs to customers (Sengupta, Krapfel, & Pusateri, 1997). KAM is considered such a valued approach for serving key accounts that Friend and Johnson (2013) call it an “imperative for facilitating a firm’s long-term viability”.Over the past decade, we have interacted with hundreds of Chinese KAM personnel from non-Chinese wholly owned foreign enterprises (WOFEs), joint ventures (JVs) between Chinese and Western partners, and Chinese suppliers, discussing their KAM activities, along with their challenges a nd uncertainties in growing key account relationships. These KAM-involved companies range from component parts manufacturers, financial services providers, and pharmaceutical companies, among many more. In this rapidly evolving landscape, key accounts are located at each step of supply chains. For instance, in consumer markets Western retailers such as Walmart and Carrefour and Chinese retailers such as Bailian (Brilliance) Group in supermarkets and Gome in appliances are among the key accounts pursued by thousands of WOFE/JV and Chinese suppliers. In another instance, while WOFE/JV car manufacturers compete with Chinese car manufacturers such as SAIC Motor Corporation Limited, Chang’an Motors, FAW Group, and Dongfeng Motors, among others, to win the hearts and minds of consumers, nearly countless Chinese and non-Chinese suppliers compete for preferred status with each of these key accounts. The result of the intense competitive landscape across so many industries in China is that KAM is a lever embraced by both Chinese and non-Chinese suppliers.There are many reasons why Western-based KAM research cannot be presumed to apply to China. Among these, China’s market development path and scale, Chinese culture, and the Chinese state capitalism system create conditions that are distinctly China. By taking into account China differences, our major contribution is to introduce a KAM research agenda for China. A China-based KAM research agenda broadens the scope of analysis to one of the most compelling markets in the world. Guided by our knowledge of KAM literature, accompanied by extensive hands-on experience in China, we make propositions regarding conditions where WOFE and JV suppliers are at a competitive advantage or disadvantage relative to Chinese suppliers. We emphasize the role of guanxi relationships and how these relationships affect suppliers and key accounts behaviors including retention of key accounts, information sharing, and demands made by key accounts. We further propose that these relationships are affected by company-to-company matches/mis-matches. Finally, to fully understand the KAM landscape in China, we also encourage an expanded view of issues to include the effects on KAM of the ever-present Chinese government.