ASPECTS OF TOTAL QUALITY MANAGEMENT APPLIED IN ...

Annals of the University “Constantin Brâncuşi”of Tg-Jiu, No. 1/2008, Volume 2,
ISSN: 1842-4856
As a result of these developments, channel strategy and particularly multi-channel strategy has, and
is likely to continue to enjoy increased attention as a means for gaining a sustainable competitive
advantage. Probably the main reason for this is that well formulated channel strategies are more
difficult for competitors to quickly copy. Developing multi-channel strategies often requires a longterm
commitment and significant investment in infrastructure involving capital and human skills.
Caterpillar's world wide dealer network, for example, is not something that a competitor could copy
and implement in a short period of time.
This new focus on multi-channel strategy can provide a fertile area for analysis and research in
competitive strategy. By examining various channel configurations and mixes in the context of how
such channel strategy and structure might be utilized for competitive advantage, a new research
perspective may emerge in the area of competitive strategy. Moreover, from the standpoint of the
practitioner, the increased emphasis on multi-channel strategy could provide a significant new range
of options for competing in a intense global competitive environment.
Conflict and multi-channel strategy
Perhaps the most significant obstacle to building successful multi-channel strategies is the
emergence of conflict between the different channels used for reaching customers. For some
channel participants, multi-channel strategy may be viewed as a zero sum game: If one channel
gains customers then another channel must have lost customers.
Researchers examining multi-channel strategy in business-to-business markets will need to
determine just how prevalent this zero sum perception is among channel participants when multichannel
strategy is employed and whether it is a major cause of conflict. Further, researchers should
also examine whether this perception reflects the reality of multi-channel strategy. It may well turn
out that well-designed multi-channel strategies can avoid the zero sum model and instead provide
for greater potential returns for all channels in the mix. If indeed this were the case, very interesting
and important research could focus on how and why erroneous perceptions develop in multiple
channel systems.
Practitioners will also be very interested in conflict associated with multi-channel strategy. Perhaps
the most emphasis should be placed on avoiding dysfunctional conflict in the first place during the
process of designing multi-channel strategies. Can conflict between channels be “designed out” by
anticipating potential conflicts and then formulating strategies and policies that prevent conflict or
at least significantly ameliorate them? For example, if a manufacturer sells via its online channel
directly to the same customers that are served by its field sales force and/or independent distributors
can sales commissions be configured so as to create a win–win–win channel strategy? This type of
positive outcome would occur if the multi-channel strategy results in customers having additional
channel choices, field sales representatives or independent distributors get credit for direct from
manufacturer sales (and receive commissions on them), and the manufacturer gains incremental
sales because of the wider channel net cast before customers?
If it is not possible to completely or virtually eliminate channel conflict via the original design of
multi-channel strategy, both practitioners and researchers will need to examine ways of resolving or
at least mitigating cross channel conflicts associated with multi-channel strategies. Some of the
tools managers use to deal with conflict may involve traditional behavioral approaches that seek to
enhance relational exchanges between channel members as well as arbitration and legal means. But
technology may also play a larger role in the future. Under the banner of distribution relationship
management (DRM), some firms have developed and one has patented software that can help
channel managers deal with conflict by providing automated systems to assure that all channel
members receive their fair share of the margins when products are sold via multiple channels that
appear to compete with each other.
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