Rethinking Distribution: Adaptive Channels
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“Rethinking Distribution: Adaptive Channels”
PART A. Basic Concepts and Idea
Forward Looking companies have discovered adaptive channels as a solution to meeting challenging and unique demands of the customers.
Adaptive Channels have increased the profit making opportunities because companies share their resources and capabilities in a novel way.
Distribution channels enable cost saving and improve the productivity
The benefit of the distribution channels come from opportunity to leverage the resource and shared capabilities
The three main objectives of the distribution channels is to meet the unpredictable demand from customers, meet customer demand for broader market offering and improve the quality of service through the distribution channels.
PART B. Implications for Applications
Distribution channels solve the business by meeting the unpredictable demand. The managers whose innovations have given rise to this concept view their distribution channels as network of capabilities embedded in an extended enterprise. They have realized that by sharing their resources and capabilities in novel ways and new situations, they can take advantage of profit-making opportunities that they could not exploit alone.
The nature of the business dynamics makes the new approach to distribution both essential and feasible. Tough competition is forcing managers to scrutinize every aspect of their operation. Increasingly, they are recognizing that distribution channels represent an untapped opportunity for major cost savings and productivity improvements.
Firstly the distribution channel is designed to ensure that the members are routinely able to cope with unexpected or unusual demands for products and services. Secondly, the new arrangements focus on meeting customers growing demands for broader market offerings–products and services that the channel member does not normally provide. Thirdly, the objective is to improve the quality of service throughout the distribution channel by substituting the superior capabilities of one member for the inferior capabilities of another..