Whilst it may be true that there is a global market for catering, is catering company "A" as competent in Japan as it is in China? What about local family catering businesses who have provided catering services for a local plant for years? Is this their opportunity to become a global supplier by making a bid for all of the multinational company's sites worldwide? Probably not.

The presence of a global market doesn't mean that it makes business sense to interact with that market at a global level.

A supplier may, in practice, be stronger in Europe than in Asia in which case it will be difficult to explain to staff at a plant in Singapore why their lunches are much less enjoyable than before!

Dealing with markets at higher levels of aggregation may actually reduce the amount of competition¡­only mega suppliers can cope with volume on a truly global scale.

Attractiveness

For every supplier who is truly global in capability, there are ten who are part of an amorphous group with limited coherency and fewer common standards.

For these companies, managing a single global customer stretches their management capability to the limit. We may make ourselves just too big. Even if you are not going global, many sales organizations struggle to deal with "cross boundary" customers. Most sales teams are set up on a territorial basis and have to set up new structures and processes to service larger clients.

But who pays for this?

Law of Squares

Let's imagine that we have three sites each using different catering contractors. We decide to hire a common contractor to cover all three sites. A tough challenge? Not necessarily!

Supposing that we decide to extend the scope to three more sites bringing the total to six. Have our problems doubled? Not in our experience. The diversity of user requirements, local preferences and reciprocity rarely increases arithmetically.

Our rule of thumb is that the complexity of the internal interface increases on the square of the number of stakeholders. So three stakeholders represents a complexity of nine (3 x 3) whilst six stakeholders represents a complexity factor of 36 (6 x 6).

Why should this be? Well, people are diverse and unpredictable so the more variety  you try to encompass in a single deal, the more likely it is that there will be local issues which make it harder to meet everyone's needs. It can be done but it will be four times harder with six sites than with three!  

Scale

The local family-owned caterers may offer a high level of service as the plant may be their key, or even sole, customer. Risk as well as opportunity exists for developing this supplier relationship! But aggregate your scale so you deal with the global caterer's head office and you may actually be a smaller proportion of their total sales than you think!

In fact, you may be a  more important customer to the regional office of the caterer than to their national head office. Just as you have aggregated your scale, so you are now competing for attention with other customers who may be even bigger than you.

So, size isn't everything!