What are main subtopics to go through when including distribution channel in your structure?

Bain Choosing a distribution channel McKinsey
Recent activity on Oct 15, 2018
4 Answers
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Anonymous A asked on Oct 13, 2018

Also is it really important to analyze distribution channels when solving a case? Finance major, apologies if the answer seems obvious to others.

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Anonymous replied on Oct 13, 2018

The answer is as usual: It depends...

It depends mostly on the case. It's obviously not important for market sizing cases or finance-heavy cases. But for anything to do with market entry, growth strategy, some cost improvement... of course it's important.

So the best thing to do is to always acknowledge that distribution is a thing, and go through the analysis where appropriate.

If you analyze distribution, here are a couple of thing:

  • Which are the distribution channels a company is using? Why those, and why not others?
  • What is the bargaining power of distributors (per channel)?
  • What is the cost of distribution (per channel)?
  • If appropriate for the case (i.e. a strategy case): Could distribution be organized completely different (e.g.: Tesla owns dealerships, other car manufacturers don't. "Direct to consumer" vs. through a multi-brand store...)

Hope this helps

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Benjamin
Expert
replied on Oct 15, 2018
ex-Manager - Natural and challenging teacher - Taylor case solving, no framework

Hi,

When looking at the distribution channel, you want :

- understand how they are structured and how they work ?

- what is the weight and trend of the different channels ?

- Do they have the same profitability and potential for revenue ?

- are they specific to a product line / customer type ?

- what is our barganing power for each channel ?

Best
Benjamin

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Vlad
Expert
Content Creator
replied on Oct 14, 2018
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

Agree with Elias - really depends on the case. Some general things you would like to know:

  • The share of each channel in sales
  • Power of distributors (in case of high share)
  • Growth rates
  • Cost
  • Share on the shelf (vs. competitors)

Best

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Guennael
Expert
replied on Oct 13, 2018
Ex-MBB, Experienced Hire; I will teach you not only the how, but also the why of case interviews

Make sure you don't forget the logistics / stocking and stock out issues as well - often a pain point or source of opportunity

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