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CHANNEL Development Channels are both the conduit to the marketplace, and the steering force of the value chain. Their organization and discipline may hold the promise for unleashing and sustaining the most significant competitive advantages of the firm. In essence, VXTConsulting’s approach to channel development addresses both: process (optimal combinations of functions, value activities and linkages) and organization. The channel’s design is constrained by competing objectives to: 1. Providing the desired level of service output for each market segment. 2. Minimizing the total cost of the channel structures. To simultaneously optimize various channel, customer, organizational, and process objectives, we coordinate the channel development activities in five tactical modules: Strategic implications of management bounded systems (objective module) Ø Validating and updating the scope of the firm Ø Addressing the firm’s sourcing, platform and proprietary policies Ø Assess channel partner relations, ownership and control issues Channel planning (control module) Ø Identify the factors bearing on the channel characteristics by segment Ø Track the services outputs needed to satisfy each segment Ø Track the functions that need to be performed to provide those services Ø Identify the types of institutions which best perform these activities Channel operations (effectiveness module) Ø Identify and address gaps from customer and functional value analyses Ø Design channel processes (distribution, sales, marketing, service, support, …) Ø “6 C’s:” Cost, Capital, Coverage, Character, Continuity and Control Ø Establish channel objectives in terms of volume, share and profitability Channel organization (efficiency module) Ø Assign functional roles and interdependence based on quality/cost advantage Ø Promote synergies, encourage specialization and cultivate core competencies Ø Identify potential channel conflict situations and develop resolution processes Channel implementation (action module) Ø Channel selection based on negotiated objectives and commitments Ø Channel partner and alliance negotiations determining the interrelationships Ø Design channel processes into value chain management information system Ø Organize support functions, kick-off event, training and communications Channel partner selection and management, vendor and supplier relations, strategic ventures and alliances, and their competitive implications are integrated in the channel development process, and supported by our other consulting processes. |
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