Developing and Managing Channels of Distribution

Powered by Harvard Business Publishing, this module explores the multi-faceted nature of channels of distribution. The module provides guidelines for how producers of goods and services should cultivate, execute, and manage their go-to-market strategies. They can achieve success by implementing the notion of channel stewardship and by applying its three main disciplines: mapping the industry channels, building & updating the channel value chain, and aligning & influencing the channel value chain. Managers are guided on whether to pursue direct and/or indirect distribution channels. The author presents a seven-step framework for building the channel value chain. In aligning & influencing the channel system, readers discover the importance of aligning the network of suppliers and intermediaries to address customer needs and how participating members should be rewarded commensurate with their efforts. Hard and soft power as key influential levers are discussed, and readers are also introduced to a four-step alignment process for programming a high-performance channel system. This discipline also involves managing horizontal channel conflict. The module closes with an eCommerce supplement, which discusses how online channel capabilities have caused varying degrees of disruption among specific product categories.

This module contains two interactive illustrations: “Channel Margins,” which provides an overview of the effect of markups and margins that are added as the product or service winds its way through the distribution-channel system, and “Channel Profiles,” which enables readers to apply the seven-step value chain framework to build a sample distribution system, and to explore three different financial scenarios of a hypothetical company case example.