The Distribution Trap

The Distribution Trap

By catering to the whims of the mass market, manufacturers are allowing their retail customers to dilute the value of their products and services.

The Distribution Trap: Keeping Your Innovations From Becoming Commodities
By Andrew R. Thomas and
Timothy J. Wilkinson
Praeger, 2010, 176 pages, $29.95

Why is it that U.S. manufacturers of all shapes and sizes allow themselves to be pushed around by discount retailers, to the extent that they often cede control of their own supply chains to the big boxes? The manufacturers "have little or no control over the distribution and sales of products in their home market," observe the authors of this new book. "They do not even have control over the price they can charge for their products." The simple answer, of course, is that the retailers have the money and the clout to demand pretty much whatever they want from their suppliers, whose success often depends on remaining compliant with the retailers requirements.

As a result, this book contends, by catering to the whims of the mass market, manufacturers are allowing their retail customers to dilute the value of their products and services. Taking as its subtitle "Keeping Your Innovations from Becoming Commodities," this book sets out to offer manufacturers direct marketing strategies aimed at taking back control of their channels and refocusing on quality rather than quantity.

The authors -- Andrew Thomas, a professor at the University of Akron (as well as an IW contributing editor), and Timothy Wilkinson, a professor at the Montana State University -- focus on chainsaw manufacturer STIHL as a case study in how an American company can win market share and compete globally without selling to the big-box retailers. The key is focusing on service, and remaining close to the independent distributors who are the "face" of the company, rather than the impersonal big box.

See Also:
• How to Heal a Broken Supplier Relationship
• Supply Chains Push the Real Estate Rebound

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish