Business

to Case Submission – 2
Business Zurin Industries
Marketin
g (B2B) Presented by -
•Antara Rabha – 2001065
•Swati Aggarwal – 2001111
•Himanshu Sakhare – 2001180
•Ronak Chavda – 2001238
•Tejeswar  Vanapalli – 2001163
•Swapnil Sonkavde - 2001044
Introduction
Zurin Industries has 4 Divisions and operates • Annual Revenue sales – 5.2 B. Swiss Francs
in total 23 countries
1. Air and gas compressor
• Breakup of revenue
2. Industrial plastics
Europe – 40%
3. Diesel engines
Rest of the world – 60%
4. Industrial components

Zurin Air and Gas compressor

Standard compressor
• Specially used in construction companies
• Bid basis selling in market – transaction mode of
supply
High technology compressor
• Used for research and development purpose and
OEM’s
• Supply is done on collaborative mode with
involvement in design and development
 Comparison of two major suppliers 

Ericsson Gordier 
Origin Sweden French 
Pricing and Government Government Norms forbid price competition Price Competitive 
Policies  Part of Swedish government combine or Carter for Steel Government policies favored keeping mill capacity high to
Prices were charged for various grades of steel they produced  generate employment. 
(Page 5, Para 2)

Transparency  Cost records not available, investment records were not available  Cost Records available for inspection during price negotiation
Assistance Provided  Months of intricate and iterative engineering activity to create Assisted by R&D team of Zurin 
metal alloys to create metal alloys needed to produce products
meet Zurin’s OEM customer needs

Cost per Tonne of Steel 2200 SF per tonne 1850 per tonne
XK1000

Quantity of XK100 bought 1500 tonnes 1000 tonnes

by Zurin 

Other Orders for Steel  4000 tonnes 1500 tonnes 

Dependence on Supplier Ericsson had been the company’s primary, nearly exclusive Gordier indicated that it did not have the facilities, capital or
developmental source.  interest in taking larger orders, company policy also prohibited
it 
 • Ericsson Metalworks tripled the price of XK 1000 steel
which Zurin cannot afford to pay, and it can also affect
relationships with other suppliers

• Zurin’s principal exclusive supplier is Ericsson, but it has a

predetermined price for the steel it supplied that cannot
be adjusted.

• The manner by which the steel price was determined was

Key issues opaque.

• The process of replacing Ericsson, the incumbent steel

producer, with a new producer will take a significant
amount of time.

• Not many options are available

• Zurin's success is dependent on Ericsson's R&D section.

 Buyer Seller Relationship Analysis 

Tools Used
Understanding the Value Drivers

to Analyze  Understanding the Mistakes or Gaps – Things

which Zurich Industries should have known 

Identifying the Relationship Strategies

Needed

Relationship Marketing Steps Ahead 

 • Zurin is a major player in the industry and a
Value Drivers consistent customer for Ericsson and purchases large
volumes of steel with a total of 5500 (4000+ 1500) 
and Switching tonnes of various varieties. 
• Revenue and Cost reduction (Economies of Scale) for
Costs Ericsson 
• Enhancements in R&D capabilities for Ericsson
(Economies of Experience) 
• Zurin also has very high switching costs when
switching to other suppliers due to investments in
R&D
 • Number of Alternatives : few, only 3 or perhaps four     (Only a few suppliers
has the capability for the quality which was needed  were capable of making
investments required… page 3 para 4)

Buyer- Seller • Supply Market Dynamism : Volatile  The purchase of steel depended on

product life cycle. Some were consistently bought for 10-12 years others were
Relationship bought for shorter life cycles.  Ericsson invested nearly 125,000 SF in developing
a steel, XA600 while none were bought by Zurin, because Zurin could not win
the bid for the Nuclear Plant Design
Analysis  • Importance of Purchase : High  In the short term, without high specification
material, the development of Products by Zurin would cease.  In the long term, 
(Ericsson and they can have a joint venture with Hiroshimi Steel of Tokyo and Victor Trenzk of
Budapest while building further relationships with Gordier. 

Zurin)   • Complexity of Purchase : High   (Months of intricate and iterative engineering

activity to create metal alloys to create metal alloys needed to produce
products meet Zurin’s OEM customer needs (Pg 3, para 3))
•
Information Exchange : Depended on Supplier   Zurin shared information with
suppliers to help develop steel. Gordier was very transparent in sharing
information while Ericsson was not at all transparent and did not share any
information. 
• Operational Linkages : Extensive Management recognized that there was
nearly as much reliance on the engineering and R&D of key suppliers as Zurin’s
own product

Relationship Analysis Conclusion : The relationship between suppliers and Zurin is

collaborative for High technology compressors.
 • How much of the total business of Ericsson is provided by Zurin?
• Who are the other firms that Ericsson supplies to?
Understanding • How is the supplier’s profitability?
the Mistakes • Who are the stakeholders involved in decision making in Ericsson?
Gaps • How does that share of each supplier's business vary across product
offerings sold and across the different locations each supplier has? 
• For each supplier, which of the company’s product offerings delivers
the greatest value relative to competitors’ offerings and which ones
deliver the least? 
• Are there any external pressures that Ericsson is facing at present?

Things which
Zurin had less information about Ericsson and yet, it was their major
Zurin Industries  developmental supplier. This is a major mistake that Zurin made in
supplier selection and relationship management. 
Should have 
known ​
 • They should visit/call Ericsson and understand the
reasoning behind the price increase 
• Zurin should look at it’s own competitors and
understand if Ericsson has struck a deal with one
of the competitors and at what price.
• Zurin  should negotiate to see if Ericsson can
increase the price over a period of time instead of
Recommendations all of a sudden given the long term relationship. 
• They should look at some form of compensation
  for Ericsson for their investments on the project
that Zurin did not purchase steel for.
• They should look at diversifying their supplier
base - look at other suppliers like Hiroshimi Steel
of Tokyo and Victor Trenzk of Budapest
• Creating a supplier relationship management 
strategy - Using activities based costing with
suppliers, multiple single sourcing and other
collaborative relationship building with suppliers. 
Relationship Marketing to be Used
• Relationship Quality –   Need to be reliable for their suppliers. 
• Relationship Breadth - Need to build more interpersonal relationships
with suppliers
• Relationship Composition – Higher contact portfolio across the partners 

• Relationship Strength – If Quality and Breadth is good, then the strength

and resilience of the relationship will be good  
• Relationship Efficacy – If Quality and Composition is good then the
achievement of desired objectives will be good
 • Suppliers play a major role for any
company. 
• Without them, the company will
not be able to deliver to its
customers. It is important to build
B2B relationships with suppliers
while remembering information is
Learnings key. 
• The focus should be to protect
oneself from being strong armed by
any particular supplier and
building a synergistic value creating
relationship profitable for each
partner. 
Thank you