May 1994
Background Note
HBS Case Collection

Reorienting Channels of Distribution

Format:Print
| Pages:12

Abstract

Traditionally, distribution channels have been viewed as vertical marketing systems where responsibility was transferred from one layer to the next, like passing a baton in a relay race. Distribution channels in the future are likely to look more like horizontal alliances of suppliers and intermediaries, all with the aim of efficiently and effectively addressing customers' real needs. These transitions, driven by an underlying change in the economics of production and distribution, are leading to distinct trends in the distribution industry. This note focuses on three primary trends: hybrid channels, multiple channels, and shorter channels. After exploring the challenges managers face as they reorient their distribution, highlights the effects of such changes on supplier-intermediary relationships.