Offset Management for Large Systems : A Multibusiness Marketing Activity

Abstract: Offset, an advanced form of countertrade, is common in the international marketing of large infrastructure and defence systems. Offsets are activities that benefit the buying country for example in the form of local content, support of exports, subcontracts and technology transfer. In this doctoral dissertation Magnus Ahlström analyses how offset can be managed, not as a separate activity but in the context of large systems marketing. Based on eight case studies of marketing of large defence systems, the author develops four models to describe the offer, the seller, the buyer and the buyer-seller interaction.Offset is here seen as an intertwined component in the total offer, which cannot be managed separately from the technical system. Unrelated offset and offset related to the technical system require different management, but the two types need to be coordinated. Because of the need for resources and the interest from stakeholders the selling alliance and the extended buying centre are both multi-organisational including organisations with different interests and roles. For the seller e.g. the mobilisation of supporting organisations, subcontractors and local partners as well as control of their communication with the customer therefore become important. In addition project management also becomes a task of managing these relationships. The parallel processes of negotiations and implementation in the buyer-seller interaction increase the complexity of offset management. The management of offset in large systems marketing is here conceptualised as a multibusiness marketing activity, which is characterised by the involvement of multiple wants, multiple offers, multiple industries, multiple functions and multiple business partners.