A Case Study on the Channel Strategy of an Electronic Test & Measurement Company
Date Issued
2011
Date
2011
Author(s)
Lo, Ta-Chun
Abstract
As industry is getting mature, competition would become fierce and the growth of the incumbent firm would become difficult. How the incumbent firm manages such saturation by changing its resource configuration attracts our research attention. Based on a qualitative research approach, we examine the transformation strategy of an established multinational high-tech firm specialized in designing and producing test and measurement equipment. By analyzing the content and process of strategic changes during the transformational stage, this study identifies the determinants of choosing between direct account sales and agent models in response to future growth.
Our research results show that in response to changing industrial structure, company must adjust its business model in order to maintain its competitive advantage. When industry is mature, company needs to find ways to differentiate itself from competition. One alternative is to outsource its non-core activities along the value chain, such as low-end manufacturing, and the use of channels etc., to gain operational flexibility. Meanwhile, the leading firm’s strategy change also affects the industry structure, it stimulates the industry change. When more companies adjust their business scope through outsourcing, it also changes the inter-firm transaction costs between upstream and downstream companies. Therefore, there is a dynamic interaction between industries and enterprises. Furthermore, channel strategy is an important market strategy. For entering with new products or new markets, direct account sales would be more effective. As for mature products or markets, different channels can be structured to enter market quickly. Whether by direct account sales or agents, companies must understand the product life cycle and market needs to develop the most appropriate channel marketing strategy. This paper provides practical recommendations and suggestions for future research.
Subjects
Industry Structure Analysis
Business Model
Transaction Costs
Technology Product Life Cycle
Type
thesis
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ntu-100-P98748017-1.pdf
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