2open_dealing_with_channel_conflict_in_china
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This document discusses strategies for dealing with channel conflict in China. It presents a channel conflict strategy matrix that outlines four approaches: dominate, lead, cooperate, and integrate. It then provides examples of companies in China that exemplify each approach. Regional distributors pursue a domination strategy, seeking to control ecommerce channels. A multibrand exclusive distributor in olive oil and dairy uses forward integration, using its distribution network and customer database to control brands. A construction materials company cooperates with a diverse network of small-scale service providers.
2open_dealing_with_channel_conflict_in_china
- 1. DEALING WITH CHANNEL CONFLICT IN CHINA UPDATED: 2013.11.18 LUIS S. GALAN luis@2open.biz 1
- 2. LUIS & 2 OPEN LUIS GALN CEO 2Open luis@2open.biz ECOMMERCE SOLUTION FOR CHINA 2
- 4. IT DOESNT MATTER New rules for IT Management: Spend Less. It is getting harder to achieve competitive advantage through IT investment, but easier to put your business at a cost disadvantage Follow, dont lead. Moores Law guarantees that the longer you wait to make an IT purchase, the more youll get for your money Focus on vulnerabilities, no opportunities. Studies of corporate IT spending consistently show that greater expenditures rarely translate into superior financial results. In fact, the opposite is usually true. 4 By: Nicholas G. Carr
- 5. IT IS ABOUT BUSINESS SUPPLY DEMAND 5
- 6. VALUE GENERATION Design Manufacturing Marketing Sales Logistics Customer Support THE KEY MOMENT OF TRUTH Distributor A manufacturer goods consumer money Distributor N 6
- 7. POWER BALANCE Channel Customer Control Forward 2 Integrate FMCG. China Exclusive Distribution Cooperate 3 Air conditioner. China service network Low Channel Added Value High Channel added value Dominate 1 China regional distributors Lead (Automotive) Brand Customer Control 7 Channel conflict strategy matrix: Bendix, Goodman and Nunes
- 8. REGIONAL DISTRIBUTORS ACROSS CHINA Several Importers with different strategies Wine Case What he does? Finance Importer Often, trade marketing They are competing in price How about technology? Move them to showrooms & logistics networks Ecommerce platform with huge coordination challenge What can we do? Policies Sales attribution Dominate ecommerce channel DOMINATE 8
- 9. CHINA MULTIBRAND EXCLUSIVE DISTRIBUTOR Huge importer with great distribution network Olive Oil, Dairy Cases What he does? Finance Importer Often, trade marketing He is very powerful How about technology? CRM. Customer registration. Database marketing Cuponing and trade marketin support After sales service What can we do? Help him sell Push sales to him Surround him: pre and post customer interaction FORWARD INTEGRATE 9
- 10. CHINA SERVICE NETWORK Diverse network of SMEs using our products Construction Materials, Car Lubricants What they do? Add a necessary layer of service to our product Powerful because they got substitutors How about technology? Scale and Scope economies (critical mass) Technological infraestructure for SME integration B坦oking systems Services Marketplace Customer Segmentation What can we do? Standardize 020 Reverse: choose installer after choosing our product COOPERATE 10