The world is changing rapidly at this moment; the election of Donald Trump and Brexit are two examples of big changes which will have a lot if impact for the business of companies who sell their products and services on the world market.
While the last decades the main trend was to open markets, lower import taxes, get rid of boarders and support free trade this probably will change the coming years and will have big impact on us all. At the same time the distribution sector made it possible to transport goods all over the world for very low prices products which made it possible to produce goods at locations where they could be produced as cheap as possible and the same will happen for services outsourced to low income countries.
This will cause a lot of turbulence in the environment of companies who sell their products and services which will make it necessary for them to monitor these and take proactive actions to continue their business. And at the same time customers who have to buy products and services on an unstable market because protectionism will make products from outside the country more expensive and local products cheaper: the product landscape in their web shops and supermarkets will change significant the coming years!
What will happen when the UK decides to increase the tax products from the EU significant? What will be the impact when companies now producing in Asia must pay high import taxes when selling on the US market? What when China decides to transport products to Europe only with their own vessels? And what when a small local producer is becoming very popular because there is suddenly more demand because his product is suddenly added to a web shop for pricing reasons?
For this reason Channel Management will become more and more important because, companies continuously have to anticipate on these developments and take care their products and services keep being sold on the market through their channel network. In the past Channel Management was primary the domain of the distribution function but the marketing component will become more and more important and will need to be aligned with Business Planning when something changes in the economic and political environment of the company.
Local Business Services supports companies implementing Channel Management as a structural business function with the objective to optimize their mix of channels through which they sell their products and services to consumers. Companies should constantly ask themselves the question: “Am I selling through the right channels?” by setting up a function and process for Channel Management within the company aligned with their Business and Marketing strategy.
Local Business Services can support you to improve your Channel Management function and enable you to improve your market share by enabling you to anticipate early on new opportunities in a fast changing world and help you setting up or improving your Channel Management function:
Define a Strategy: Identify your current portfolio, margins and metrics, identify trends around your products and services, risks around current channels and the behavior of customers and important stakeholders influencing your business and potential scenario’s. We will investigate the following areas which could impact your business:
- Currency and Stock Markets
- Costing & Distribution
- Marketing & Sales Channels
- Direct & Indirect Tax (including customs)
- Legal & Contracts
- People/ HR-aspects
- Financial Reporting
Per area will be investigated what actions you can take and define a Strategy which supports you building up your market position in a changing environment.
Design Channel Structure: Identify potential new channel opportunities based on your Strategy, analyse the impact of introducing new channels on your existing channels for your sales process, distribution and IT and design a new channel structure, portfolio and metrics. Take care both the channel strategy and structure are authorized by management and ownership is taken by the management team of the transition process by authorizing a proper business case regarding the new Channel Strategy and Structure both on costs and expected benefits.
Select Channel(s): Once having a channel strategy and structure start implementing this by selecting new channels and produce an implementation and transition plan how to implement the new channels. Based on this plan a budget should be allocated and ownership taken on the management level by appointing a channel manager responsible for the optimizing of the channel portfolio. Develop tools and support for upgrading your channel capabilities, implement the new channels and track the progress and define the metrics.
Implement Channel Structure: Implement the new channel structure in your organization: startup new channels, phase existing channels out you or to get rid of or change existing ones which underperform. Keep measuring the progress on your Channel metrics monthly both on channel value and margin.
Manage Channel(s): Once having implemented the new channel structure keep monitoring the key metrics on how your business is performing oer channel and keep tracking opportunities and threats in your environment.
Interested in knowing more about Channel Management? Contact us for planning a meeting or workshop for your organization.
Local Business Services B.V.
Owner: Gerard Geerlings MSc