Let’s recap the past 4 segments on business strategy and what Kepner & Tregoe call the driving force behind the strategy. Here is what we’ve covered so far:
1. Overview of the concept of driving force
2. Market driven company strategies
3. Product driven company strategies
4. Technology as a firm’s driving force
The next few weeks will cover these driving force topics: Methods of sales and distribution Production capabilities Company size and growth Revenue and profit
Today we will discuss “Method of Sales” and “Method of Distribution” as the driving force of strategy.
Method of Sale
The method of sale is the primary method your firm convinces a customer, current or future, to purchase your products. You may choose to focus on your customer or the end-user if they are different. Typically this is supported by the normal methods of marketing such as advertising, displays, direct mail, e-mail, etc.
Method of Sale as the Driving Force
The firm whose strategy is driven by the method of sale will only offer products and services based on the capabilities and limitations of the method of sale. To go even further, the markets served and geographic scope for these products and services will be refined by the method of sale. Other sales approaches may be developed that are associated with the current methods of sale. The method of distribution, discussed below, can be developed to support the sales method. The firm may also choose to re-sell products of other firms to maximize the advantages in their method of sales.
Method of Distribution
The method of distribution is the way products reach the customer and can include field storage and secondary warehouses. This distribution system can be complex involving extensive knowledge of logistics, warehousing, and transportation. The method of distribution may be used with both the direct customer and the end-user.
Method of Distribution as the Driving Force
The firm that is driven by the method of distribution will base the products (and services) offered, markets served and geographic reach on the types of products and customers that its distribution system can handle. Its other capabilities, such as the Method of Sale discussed above, will be developed to support the distribution method. Here too, the company may choose to re-sell products of other firms to maximize the advantages in their method of distribution.
Check here for initial post of this series, “What is Driving Your Company?”
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Originally posted 2013-12-03 05:44:11. Republished by Blog Post Promoter