1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. - 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

8. 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)

9. 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