Ways to Add Value to Partnerships
Readers of my earlier articles will know that I have talked in a few of them about the McDonald’s Group (or Division as it now called) and how we developed strategic partnership status with McDonald’s.
This kind of thing doesn’t happen overnight. It has to be planned and everyone on the team has to understand what adding value is. Over the course of the next few weeks, I’ll be sharing some of the things that enabled us to move from a vendor status to a strategic partner.
Like most things that cause changes and results in life, it’s rarely one single thing, but a number of things happening together that brings change.
It all starts at the top. We’ve all heard this before, but it REALLY does! Back in 1955, a curious and intuitive man named Waddy Pratt worked for the Coca-Cola company. He came across Ray Kroc, founder of the McDonald’s we know today.
He was obviously a good salesman as he convinced both Ray Kroc and his own company that this was a partnership that should be invested in and nurtured. As a District Sales Manager for Fountain in Chicago, Mr. Pratt met Mr. Kroc, in February 1955. Together they formed a supplier/customer partnership that was sealed with a handshake and to this day, there has never been a formal written contract.
But in addition to Ray, there was a very senior man in the Coca-Cola Company who understood how the partnership could work strategically for both. His name was Don Keough. He changed the way Coca-Cola treated McDonald’s and all their accounts, by focusing on the THEIR needs.
- Don Keough
Don talked about McDonald’s, visited McDonald’s in every country he traveled too and ate at McDonald’s. He led by example and he ensured there was a dedicated team of talented people that worked exclusively on the McDonald’s business.
So it really did start at the top! The strategic partnership touched all aspects of doing business with a preferential account; from pricing to merchandising, packaging, distribution and marketing.
The expansion of McDonald’s in the U.S. enabled Coca-Cola to evolve a model which could later be used globally. McDonald’s led the U.S. in fountain or dispense systems and indeed was the first to move to bag in the box and bulk, which changed many things in the supply chain.
Both these major package innovations were brought about by some of the McDonald’s changing needs and then were rolled out to other Coke customers.
They would never have been evolved had it not been for the special open partnership between Coke and McDonald’s. Mutual investment was required and some form of assurance that the system would adopt it, allowing payback.
Very early on, Don Keough recognized the strategic importance of McDonald’s. Not only were they the difference soft drink market leadership for Coca-Cola in the U.S. in the 70’s, but because the McDonald’s system was so efficient, they taught people how to buy and enjoy cold drinks at the right temperature, with food! It was a glorified sampling operation.
That was the simplistic basis of the start of what was to become a very integrated strategic partnership. In the next few articles on this site, I’ll explore this partnership with you and provide some insights on how this can be done. Stay tuned…