The Demand-Driven Corporation

In today’s global and rapidly changing economy, current demand is an ante to play in the game. Winners have an equally intense focus on latent and emerging demand. To continue to grow in a world of flattening or even shrinking demand, you are going to have to build on one of the most successful strategies of the past—endlessly fine-tuning a supply chain for its own sake—and simultaneously shift to guiding and informing that supply chain with a demand chain that constantly monitors the changing demands and need states of your highest profit customer pools.

That in turn will require leaders to change how they allocate their precious time—and ultimately force organizations to reorient themselves to a singleminded focus on serving the changing needs of those key customers and consumers. In the business to consumer (B2C) world, those customers are the wholesalers, distributors, and retailers who make your offers available to the end users . . . the consumers who purchase and use them. For business to business (B2B), customers will include other businesses that distribute and sell your offers and ultimately the small, medium, and large sized businesses who are the end users of those offers. While this captures the way we will generally use the terms customer and consumer throughout this book, we recognize that these definitions are often interchangeable and are often blurred in the actual marketplace.

Following this premise of focusing on the most profitable customers and consumers to its logical conclusion results in a company that looks like this:

It has built its delivery network around the Web, not just highways and roads and standard forms of media.

It has a proprietary framework through which it manages the business that includes an understanding of demand, supply, competition, innovation opportunity, and profitability.

It understands how demand profit pools of customers and consumers create greater effectiveness in marketing, results in higher profitability, and continuously achieves organic growth.

It has built an intelligent system that knows where to hunt for the next profit opportunity. The strategy conversation is about how to serve customers and consumers now—and in the future, which enables your company to consistently preempt competition.

The company and its expanded network of manufacturers, retailers, and media partners (the demand chain) share the same objectives, including winning with the same high profit customers and consumers. The network members’ common task is to collaborate and to share data in order to merge your objectives and outcomes around the common denominator of the customer/consumer and the demand they are seeking to satisfy.

It holds its marketing and commercial organizations to the same standards that it holds its supply chain management. And just as its supply chain has metrics for everything, so too must that rigor, rhythm, and consequence apply to its new demand chain.

It recognizes that intellectual obsolescence is even more expensive than physical obsolescence. It treats information with the same sense of urgency that it does physical inventory. The goal is to continually shorten the time it takes to bring good product, service, and marketing ideas to the marketplace.

Your company will precisely reach your most profitable customers and consumers. You will have more timely and more precise measurement of your advertising on all three screens (TV, Web, and phone). These programs are already in development, so you never again need to take “no” for an answer.

It recognizes that alignment across—not just along—supply and demand chains is critical. In your company, the demand chain orients the supply chain, and the supply chain fulfills the demand chain.

It is an organization that is confident it can achieve on the demand side what it has achieved on the supply side.

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