Published by MBA Skool Team, Last Updated: May 12, 2019
What is Global Account Management (GAM)?
Global account management (GAM) is the concept of managing global or international business accounts. Global account is the account which has globally standardised or compatible products or services at various locations internationally. Global Account Management (GAM) makes Global account managers with their teams to navigate both the internal and external challenges.
Global account managers manage company accounts worldwide. This typically occurs in large companies with international accounts. Internal challenges include delivering support functions and resources to the important customers around the world according to their demand. External challenge includes solving any external complexity of a major customer.
Characteristics of Global Account Management (GAM)
1. Global Account Managers
2. International Customer Base
3. Uniform Terms of Trade
4. Standardized Products
5. High Service Quality
6. Strong Support Network
Global Account Management (GAM) Approaches
The three basic approaches of GAM are:
i. Coordinated GAM- In this approach, GAM unit is not that strong and national sales organisation keep a great deal of power. Coordination GAM is used when local relationships are more important than standardising services globally. Banks use this type of approach. Suppliers who lack the integration capabilities can apply this technique to manage multinational customers centrally.
ii. Control GAM- In this approach, the responsibility of global customers is divided between the national operations and the GAM group and but the most of power lies in the hand of GAM group. It is the most common form of approach. It is used when customers need a global account but due to some reason, they have to retain the account in the national operations.
iii. Separate GAM- In this approach, a supplier creates a separate business unit and it undertakes the whole process for global accounts. It is used when the supplier has customers who have profitable businesses, enough to pay extra costs.
Challenges in Global Account Management
Some of the challenges or obstacles in global account management are:
1. Engaging and coordinating internal resources within their own organisation is a very difficult challenge even bigger than engaging customers.
2. Global account teams need to engage resources in different countries to provide a consistent service, even if the account is not a major presence in the local country.
3. They need to manage the internal complexity of customers who face challenges in coordinating globally and managing the balance between both global and local.
4. They need to understand who they need to network, influence and engage with to get things done.
5. National, functional and corporate cultural differences can create problems in managing global accounts.
Advantages of Global Account Management (GAM)
1. Global account provides a good global market overview and makes detailed comparison of offers so that low price can be applied.
2. Processes can be transferred by the customers anywhere in the world rapidly and with minimum cost.
3. Globally expanding customers achieve consistency in selecting any equipment or material and also GAM speeds up the process thereby reducing any kind of support cost, training cost, inventory cost, etc.
Disadvantages of Global Account Management (GAM)
1. Sometimes high costs are involved with global account to cater the specific requirements of the customers.
2. Suppliers get confused when and how should they offer global account to customers. Sometimes companies either offer GAM to wrong customers or offer wrong form of GAM to right customers.
Example of Global Account Management (GAM)
Let’s take example of fictitious company Electrostep. It provides Global Account Management to multinational customers worldwide. They specify the type of process control equipment installed in their factories so that the quality standard remain common and variations are minimised.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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