Some competitors have formed partnership services with their channels of distribution

Symptom: Performance innovation, in the form of increased information and partnership services to distributors, has accelerated.

Implications for the market:

  • Many competitors have begun to tie larger customers to them by offering software packages that help their customers manage inventory, for instance, and by supporting these customers with other broad-based information and communications services.

  • These innovations can be powerful tools by which established suppliers can shut out other competitors.

  • These services are designed to help customers purchase more efficiently, and thereby significantly reduce customer costs over a long term.

  • When successful, such programs can established a real partnership between supplier and customer. The more a customer's costs are reduced through the service it receives, the more reluctant that customer will be to bring another supplier into the relationship or to give another current supplier more volume.


Recommended Reading

For a greater overall perspective on this subject, we recommend the following related items:

Analyses:

Perspectives: Conclusions we have reached as a result of our long-term study and observations.

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