Distribution as a
Value-Creation
Process
Managing Distribution aims to deliver the
distribution offering to target customers in
a way that creates value for
the company and its
collaborators
Structure Coordination Channel type Coverage
The members of the distribution Common ownership Breadth of their
assortments Number of outlets at which
channel and the flow of goods Different channel members are parts
of the same company offerings are made
and services from the Specialized: tend to available to target
manufacturer to customers ADVANTAGES
carry a relatively narrow customers:
Better optimization of channel functions
Greater degree of information sharing assortment focusing on Extensive coverage:
Better control and performance monitoring.
relatively few product implies that an offering
DISADVANTAGES categories is readily accessible to
High initial investment a fairly large
Potential internal inefficiencies because of
Broad: carry much proportion of customers
lack of competition
Lower cost efficiency resulting from a smaller broader assortments in a given market
scale
Limited coverage: the
Contractual relationship offering is likely to be
Depth of the available only in select
ADVANTAGES
Lower initial investment assortment markets and/or through
fast implementation specialized retailers
Lower cost efficiency resulting from partners’ Limited-assortment:
scale and/or specialization
small number of items
DISADVANTAGES within each category
Advantages Disadvantages Inefficiencies stemming from less
coordination
+ effective Difficult to
Value-Creation
Process
Managing Distribution aims to deliver the
distribution offering to target customers in
a way that creates value for
the company and its
collaborators
Structure Coordination Channel type Coverage
The members of the distribution Common ownership Breadth of their
assortments Number of outlets at which
channel and the flow of goods Different channel members are parts
of the same company offerings are made
and services from the Specialized: tend to available to target
manufacturer to customers ADVANTAGES
carry a relatively narrow customers:
Better optimization of channel functions
Greater degree of information sharing assortment focusing on Extensive coverage:
Better control and performance monitoring.
relatively few product implies that an offering
DISADVANTAGES categories is readily accessible to
High initial investment a fairly large
Potential internal inefficiencies because of
Broad: carry much proportion of customers
lack of competition
Lower cost efficiency resulting from a smaller broader assortments in a given market
scale
Limited coverage: the
Contractual relationship offering is likely to be
Depth of the available only in select
ADVANTAGES
Lower initial investment assortment markets and/or through
fast implementation specialized retailers
Lower cost efficiency resulting from partners’ Limited-assortment:
scale and/or specialization
small number of items
DISADVANTAGES within each category
Advantages Disadvantages Inefficiencies stemming from less
coordination
+ effective Difficult to
