Abusing a Market Situation Could Bring in New Competitors

Lidl, the German discount supermarket chain, has had enough of logistical chaos: They have decided to establish their own shipping company to bring home the goods they need, on time.?

Lidl wants its own ships, to ensure it can keep its shelves stocked and its customers happy. "It is an important part of securing our supply chains," says the company’s Procurement Director.

A radical move, perhaps, but to Lidl it seems a logical one, after two years of battling the severe chaos that continues to disrupt the world’s supply chains.?

Shipping company greed is fueling the global supply-chain crisis, according to the White House.?In March 2020, the price of a container was USD 1,446. By March of 2022, that same container’s price had risen to USD 8,152*.

The shipping sector saw profits hit an industry-wide record of $48.1 billion in the third quarter of 2021. "The cartel of shipping companies that control the terms of global trade has never been more profitable," the White House said. "In the third quarter alone, they made $48 billion, which is nine times more than they made the year before."

As we all know, pressures create counterpressure — and lack of competition,??or arrogant supplier behavior, can and will make buyers seek alternatives. In a situation where the buyer is dependent on the supplier, the supplier might be tempted to dictate demands. But this may very well harm personal relations, with the buyer feeling defeated and hungry for revenge.

During the pandemic, exploding demand for goods combined with closure of key ports to create major bottlenecks across Europe, the U.S. and China. Just two of the results have been historically high shipping costs, and crippling shortages of space aboard container ships.

All this has led to massive delays in delivery of goods. For example, according to the analysis house Sea-Intelligence Consulting, the global container shipping fleet experienced delays to approximately 65% of all departures scheduled for February 2022.

And so, Lidl is determined to take matters into its own hands.

But Lidl is far from the only company that has felt compelled to use alternative methods to bring goods home during the corona crisis. Other retail giants such as Ikea, Walmart, Home Depot and Costco have all leased their own vessels.

Lidl is part of Germany’s Schwarz Group, operating more than 11,000 stores in Europe and the USA.

Take away: 
When you are negotiating from a power position, you should often be humble. Revenge is a real thing in business as in life and your behavior will be remembered.         

*source: Statista.?

The Great Negotiator's 103 Steps

Over a span of 24 years, I have studied some 35,000 individual negotiators. The objective: to define, once and for all, the difference between a good negotiator and a?great?one.?

Through this research, I have isolated 103 separate skills, which I named The Great Negotiator’s 103 Steps. The more of these steps you employ, and the more effectively you apply each one, the better your results at the negotiating table. And the greater negotiator you become. And it’s an established fact that we’re?all negotiators, in life as well as in business.

Stay tuned. Join the wait list to be among the first to receive the update.?https://keldjensen.com/sign-up/