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Globalization and the
flattening of the world are changing durable goods distribution, from
the manufacturer to the distributor to the end user. Learn more about
the phenomenon and effective strategies to deal with it in our ground
breaking research report.
This first of a kind report details
startling new realities in the way distributors are dealing with the
forces of globalization:
20% of the
inventory in distribution channels is Off-Brand product, sourced from
offshore sources without regard to brand identity.
Off-Brands have an average price advantage over domestic brands, even if manufactured in foreign locations, of over 30%.
Nine out of ten distributors say their off-brand purchases will increase in the next five years.
There will be
substantial changes in distributor operations due to the decreased
margin dollars caused by this influx of global product.
There will be significant and increasing channel conflict between distributors, co-operatives and domestic manufacturers
Distributor
purchasing processes and systems will change drastically to accommodate
sourcing from off-brand suppliers, foreign buying groups and offshore
master distributors.
Distributors
indicate that much of what traditional brand manufacturers do in the
name of serving the channel is not value added.
Distributors rank
foreign, off-brand suppliers equal to traditional domestic brands in
their ability to provide essential services.
Distributors
report that off-brand quality is as least as good as that of domestic
suppliers, and industry certifications and product liability coverage
are easily obtained.
Manufacturers
must rethink the value streams used to serve these distributors,
reevaluating what they do, and challenging old assumptions about what
adds value to the product and the channel relationship. Value streams
must be disaggregated, pared down to essentials, outsourced when
necessary and devoid of the traditional corporate overhead typically
applied to distribution oriented business segments.
This important material, drawn from statistically validated research, details
these trends, their likely impact and presents detailed recommendations
to equip both distributors and manufacturers to deal with this
onslaught of off-brand products.
Copyright 2007 2008 Merrimont Group LLC & Benfield Consulting
