Emerging growth companies are told to focus, laser-like, on their customers. An entire “M” of Newport’s Four Ms approach to helping companies get out of No Man’s Land describes how they develop their Market. Companies get off the ground making promises to their first customers and then struggling to fulfill those promises. Companies large and small swear by the mantras of customer focus and customer service. Many entrepreneurs take a me-against-the-world attitude and think that means it’s all about squeezing better prices out of your suppliers.
Yet focusing on customers shouldn’t keep you from recognizing that choosing your vendors can be just as important for an entrepreneurial organization as cultivating customers. Here’s an interesting example.
Country Natural Beef is a cooperative of ranchers that grew slowly for the first 14 years of its 
existence. Then in 2000 it began to grow rapidly. By 2008, the cooperative counted more than 100 ranches as members, who were collectively raising more than 100,000 cows, managing more than 6 million acres of land and selling nearly $50 million of products.
A key variable in Country Natural Beef's takeoff was that the cooperative decided early on to pattern its business partnerships on the Japanese model known as "Shin Rai” meaning mutual support and mutual reward. For Country Natural Beef this means that a values-based supply chain, in which all partnerships are driven by shared priorities. Country Natural Beef makes sure that all of its vendors are committed to providing its ranchers with sustainable, consistent prices. And they make sure that the customers to whom they supply products get quality meat and high order fill rates.
Shared Values with Suppliers
According to Oregon State University business professor Zhaohui Wu, “Country Natural Beef is an example of a trust-based model where relationships are driven by shared values." Wu’s research indicates that supply-chains based on shared values enjoy lower transaction costs and greater profits.
By working to benefit its members and partners, Country Natural Beef was able to engineer enduring partnerships that produced rapid growth. Country Natural Beef's high sales volumes and large, geographically-disparate customer base can be attributed to its emphasis on working only with complementary partners.
Even as it expanded, Country Natural Beef preserved the identity of its product and its brand. The cooperative retained its commitment to producing high-quality, premium products and ensured that its culture of excellence was fostered and continued. Country Natural Beef's takeoff was partly enabled by consumers' increasing willingness to pay for premium food products. During its takeoff, Country Natural Beef only worked with retailers who would enable it to retain its brand identity. Having partners like Whole Foods, New Seasons Market, Burgerville and Bon Appetit Management Company helped Country Natural Beef remain a recognizable provider of premium products.
What Country Natural Beef's takeoff demonstrates is that a middle market company needs to be attentive to the types of partnerships it develops. It needs to cultivate alliances with businesses that share its basic culture, can support and complement it, and will enable it to remain faithful to its brand identity.
image credit: Performance Insigths
