Channel Stewardship: Linking Demand Chain Ch. 5 Aligning and Influencing the Channel Value Chain I: The Concept of Power (and Competition) Channel Stewardship: Linking Demand Chain Requirements (Ch. 2) with Channel Capabilities And Costs (Chs. 3 & 4) Tightly II. Two Main Contingency Factors: Channel Power and Competitive Action

III. Channel Power Definition Ch. 5 Aligning and Influencing the Channel Value Chain I: The Concept of Power and Competition III. Channel Power Definition 2. Primary Driver of Change in Channel Value Chain: From Power to Channel Value Chain Performance 3. Sources of Power for Manufacturer (Fig 5-2) - Product (Brand) - Scale or size - Legal or Institutional

III. Channel Power 4. Sources of Power for Intermediaries - Market Ch. 5 Aligning and Influencing the Channel Value Chain I: The Concept of Power and Competition III. Channel Power 4. Sources of Power for Intermediaries - Market - Scale or Size - Legal or Institutional 5. Calibration of Channel Power (Fig 5-3) 6. Case Study: Nike Versus Footlocker (circa 2002) 7. Downside of (Using) Power

Key Goal: Satisfy Customers’ Requirements Ch. 5 Aligning and Influencing the Channel Value Chain I: The Concept of Power and Competition IV. Channel Value Chain Performance Front and Center Key Goal: Satisfy Customers’ Requirements Product Power (of Manufacturer) + Market power (of Distributor) Maximize customer value and channel partners’ profit

Channel Competition** Ex) Selling Cars Brand-based Competition Intra Inter Same brand Same-type Store Different brands Same-type Store Intra Store-based Competition Same brand Different-type Stores Different brands Different-type Stores Inter Who Gains and Who Loses in Each Cell? Manufacturer, Dealer, Consumer

Key Drivers of Stewardship:Common Understanding on Ch. 6 Aligning and Influencing the Channel Value Chain II: Focusing On Performance Key Drivers of Stewardship:Common Understanding on Demand Chain Requirements + Information Transparency II. Built-in Challenge in Aligning & Influencing Channel: Conflicting Goals  Customers as Common Focus Ex) JC Penney’s Order Management System for Window Treatments III. Deceptive Usefulness of Technology: Demand-chain solutions & Supply chain solutions

- Lack of Transparency and Trust Ch. 6 Aligning and Influencing the Channel Value Chain II: Focusing On Performance IV. The Root Issue 1. Natural break between demand side and supply side: Independent Improvement in parts of the value chain No real improvement in the whole value chain 2. Root cause of coordination difficulties - Lack of Transparency and Trust

V. Three Steps of Aligning Channel Value Chain Ch. 6 Aligning and Influencing the Channel Value Chain II: Focusing On Performance V. Three Steps of Aligning Channel Value Chain 1. Set Goals for the System (not for a single member) 2. Assign Channel Roles, Responsibilities, and Rewards 3. Measure and Monitor Channel Performance (Figure 6-4)

In sum, Two Main Levers of Aligning and Influencing Channel Ch. 6 Aligning and Influencing the Channel Value Chain II: Focusing On Performance In sum, Two Main Levers of Aligning and Influencing Channel Power and Control Trust and Transparency