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The ideas expressed in this work are based on those put into practice at the Okuma Corporation of Japan, one of the world′s leading machine tool manufacturers. In common with many other large organizations, Okuma Corporation has to meet the new challenges posed by globalization, keener domestic and international competition, shorter business cycles and an increasingly volatile environment. Intelligent corporate strategy (ICS), as practised at Okuma, is a unified theory of strategic corporate management based on five levels of win‐win relationships for profit/market share, namely: ,1. Loyalty from customers (value for money) – right focus., 2. Commitment from workers (meeting hierarchy of needs) – right attitude., 3. Co‐operation from suppliers (expanding and reliable business) – right connections., 4. Co‐operation from distributors (expanding and reliable business) – right channels., 5. Respect from competitors (setting standards for business excellence) – right strategies. The aim is to create values for all stakeholders. This holistic people‐oriented approach recognizes that, although the world is increasingly driven by high technology, it continues to be influenced and managed by people (customers, workers, suppliers, distributors, competitors). The philosophical core of ICS is action learning and teamwork based on principle‐centred relationships of sincerity, trust and integrity. In the real world, these are the roots of success in relationships and in the bottom‐line results of business. ICS is, in essence, relationship management for synergy. It is based on the premiss that domestic and international commerce is a positive sum game: in the long run everyone wins. Finally, ICS is a paradigm for manufacturing companies coping with change and uncertainty in their search for profit/market share. Time‐honoured values give definition to corporate character; circumstances change, values remain. Poor business operations generally result from human frailty. ICS is predicated on the belief that the quality of human relationships determines the bottom‐line results. ICS attempts to make manifest and explicit the intangible psychological factors for value‐added partnerships. ICS is a dynamic, living, and heuristic‐learning model. There is intelligence in the corporate strategy because it applies commonsense, wisdom, creative systems thinking and synergy to ensure longevity in its corporate life for sustainable competitive advantage.

Deals with brand management issues concerning brand as a resource for an industrial distributor. The brand resource can either be controlled by the producer – producer brand – or the distributor – private label brand. Analyzes the characteristics of managing the brand resource depending on whether it is a producer or private label brand. This is done from the perspective of the distributor. In order to undertake this research task, a theoretical framework derived from the industrial networks approach is used. The designed framework focuses on three central concepts – the resource intradependence, the resource interdependence, and the resource interdependence connection. The framework is analyzed on three respective levels, i.e. the company, the relationship and the network levels, and we present the results of the analysis, which indicate what influences the opportunities and constraints that management are faced with when making decisions concerning branding in an industrial context. The data has been collected through personal interviews among paper producers and paper merchants within the fine‐paper industry in the UK.

The purpose of this paper is to analyze, for both parties of a distribution channel, to what extent each party perceives the counterpart’s use of performance measurement systems (PMS) and how this perception affects the perceiver’s own use of these systems, for either decision control or decision management.

The paper proposes a conceptual model tested at different levels using structural equations models. A case study uses survey data from 107 distributors and 91 manufacturer managers.

PMS allow evaluation by the manufacturer and daily management by distributors; both uses of PMS can be simultaneous and complementary. Results show that each party’s perception of the counterpart’s use contributes to its own use, although real uses do not significantly influence these perceptions.

The results must be interpreted with caution because the sample is small. This study calls for further data collection in real situations with larger samples, and for eliminating the influence of the distribution channel type. Further work is needed to analyze other constructs driving the relationship between real use and perception.

This study’s originality comes from the conceptual model, data set, and levels of analysis. Decoupling real use and perception, it challenges the prevailing assumption that managers accurately perceive counterpart managers’ use of PMS. Analyzing at both group and individual levels, it extends the more usual dyadic studies by recognizing that any given manager’s perception may be almost wholly formed by his/her interaction with a group of individuals.

To study the motives for partnership in marketing channels and provide an empirical study on mutual selection between manufacturers and distributors.

The data were collected mainly from the interviews which present the perspectives of both the Finnish manufacturers and Chinese distributors and agents.

Based on the empirical study, the new finding is that task‐related and partner‐related dimensions in partner selection of international joint ventures also apply to distributor relationship. We argue that a distributor relationship is a product‐tied relationship, and product innovation can be used as an approach for performance improvement in distributor relationship.

The study consists of four case companies so the result cannot be of general application. Nevertheless, it provides valuable information for further utilization.

The study provides empirical evidence of the motives of partnership and mutual selection between manufacturers and distributors in China. The results of the study suggest that distributor relationship management could be improved through product innovation.

The paper attempts to fill the gap in available research on the initiative stage of distributor relationship while also providing some perceptions from the distributor side of the process.

Many manufacturers use informal approaches to engage new international industrial distributors, relying on phone contacts, correspondence and bank referencing to gather background information. Reports on a study to determine the desirability of top managers taking time to visit new international distributors in order to develop a contract and to lead in building interpersonal relationships. Commercial attachés or senior embassy officials were interviewed to obtain their perspectives on the proper role of American top managers in the development of international distributor contracts. Nearly all concluded that a managerial visit was necessary to conduct contract negotiations. About one‐quarter of the respondents felt that top officials from American firms needed to be involved. The majority reported the issues could be negotiated by any level manager who had power to act decisively on contract matters. In most cases, however, long‐term contracting responsibilities are usually reserved for people with top management status. Consequently, another international travel duty for top managers may be developing.

This case highlights the challenges faced by a young and inexperienced Area Sales Manager (ASM), early in her career. This is an often-encountered situation by fresh graduates. Through the analysis of the case, the students will be able to: ■ understand challenges a young manager faces in taking over a new, unfamiliar and underperforming territory; ■ analyze and learn to manage data and identify performance gaps in the territory, by selecting the right metrics; ■ learn the factors for evaluating the performance of current intermediaries (distributors); and ■ appreciate the importance of managing all stakeholders – internal team and building a strong relationship with the intermediaries – both distributors and retailers.

Kavita Kaur, the new Area Sales Manager at Broadway India Pvt. Ltd. (BIPL), had just taken over the Chhattisgarh sales territory in January 2020. Fresh out of a B-school, it was her first job, and her allotted territory was severely lagging growth at only 1%, compared to an all-India country growth at 13% in 2019, over the previous year. The territory was operated by established intermediaries (distributors) with long associations with BIPL. Based on her data analyses of distributors’ performance, Kaur started her retail visit with the highest selling distributor’s area (Sharda Agencies) to confirm her understanding of what the data had shown her. Following her retail visit and a meeting with Sharda Agencies, the situation turned for the worse. An email bordering to a threat from him took her aback. Kaur now had to make a choice to ensure growth in her new territory. Her options were between placating the current distributor or appointing a new one – should she retain or replace? Both had their own risks.

This case is intended for use at the postgraduate level in courses such as sales management, channel management and strategic marketing courses, as well as in executive management programs. The case is relevant from the context of channel management in India, where channel intermediaries can be very demanding. The case will give students a practical hands-on decision-making situation, where there are complexities of quantitative and qualitative nature. It will also help young graduates prepare for real life situations where the assigned territory is struggling in performance and a lot is expected from the new recruits.

Teaching notes are available for educators only.

CSS 8: Marketing.

More than two decades long technological improvements in information sharing have not yet ensured a flawless execution of vendor managed inventory (VMI) and left interested parties wondering about the reasons of poor results. Although VMI is a collaborative tool, the relational factors in a VMI setting have not received enough attention due to challenges in obtaining relational buyer-supplier data in addition to extant focus on analytical approaches. The purpose of this paper is to investigate post-implementation relational factors in order to extract relevant insights.

Accounting for the duration of the VMI relationship, the authors focus on two dimensions of VMI often ignored post-implementation: dependence of the buyer on the VMI-supplier and trust of the buyer in the VMI-supplier. Cross-sectional data were collected using a survey collected from distributors mostly in auto and electrical supply industries, which have their inventories managed by manufacturers through VMI arrangements. The sample was obtained from a leading third-party VMI-platform service provider that serves thousands of distributor-manufacturer locations with billions of dollars in sales orders. Multiple ordinary least squares regression has been used to test the hypotheses.

This paper provides empirical support that in the post-implementation stage, longer VMI relationships are associated with higher distributor dependence on the manufacturer. In addition, too much dependence could actually hurt the distributor’s trust in the manufacturer.

The authors propose that distributors maintain some of the purchasing and inventory management skills in house to limit their dependencies on the manufacturers. Manufacturers should also invest in trust-building activities, such as regular communications with distributors.

This is the first study providing empirical evidence on the positive association between length of VMI relationship and buyer dependence on the supplier, and curvilinear dependence-trust link in a post-implementation VMI context.

With the trend toward implementing flexible strategies to channel management, the network sources of flexibility have received increased attention. This study aims to reveal the dynamic mechanisms underlying the relationship between a distribution network and two types of flexibility: adaptive and proactive.

The authors apply agent-based modeling to simulate a three-level distribution network. First, a program of 14 segmentations across 4 stages is developed using NetLogo software. Using data on Company X’s distribution network, the authors simulate a distribution network when either adaptive or proactive flexibility is implemented and compare the performance outcomes of the distribution network. Finally, by using the database generated from an experiment designed with BehaviorSpace, the authors conduct a general linear regression analysis to analyze the effect of network structure on the performance of the distribution network.

The authors find that the implementation of adaptive flexibility is connected with a higher level of trust and a lower level of inventory, whereas the implementation of proactive flexibility is associated with a higher level of satisfaction but a higher level of inventory. Also, this study’s analyses show that adaptive flexibility emphasizes short-term efficiency, whereas proactive flexibility put more emphasis on long-term effectiveness. In addition, the authors find that network structure has a significant effect on the distribution network by influencing inventory, satisfaction and trust.

Theoretically, this study’s results further develop the research on channel management by revealing the interaction between distribution networks and two types of flexibility from a dynamic (rather than static) perspective. Also, the findings help in explaining how network structure can affect the performance of a distribution network. In practice, the results also guide the focal firm in distribution channels to make strategic decisions between adaptive and proactive flexibility to improve channel performance.

Business‐to‐business and industrial marketers need to improve their sales results with reduced spending and simultaneously strengthen and maintain their relationships with their customer base. The quality process, in its many forms and alternative approaches, must be operative throughout a manufacturer′s chain of distribution if it is to be a truly effective effort. Channel members are eager and willing accomplices to this effort because they can easily see how it helps their own agendas and competitiveness. A systematic communications process of measurable and reciprocal expectations aid the productivity and bottom line of all players.

Following are the learning outcomes: to understand how the tools and frameworks of strategic analysis can be applied to understand the evolution of value creation and capture in the FMCG industry; to analyze the core competencies of a company and understand their relevance in this fast-changing industry; to understand how to evaluate the pros and cons of a certain strategy and business model; and to develop strategic recommendations.

The case series traces the developments in China’s FMCG industry from the early 2010s to 2017, in general, and the efforts of Beijing WinChannel Software Technology Co., Ltd. (WinChannel) and its affiliated company, Huixiadan, in their attempt to apply new digital technologies to transform the traditional trade channel, in particular. The decision point of Case A, in early 2015, is how WinChannel can help improve the reach and efficiency of the traditional trade channel and wonders if the emerging online/mobile B2B FMCG platforms are the right solution for the increasingly digitized FMCG retail industry in China. The decision point of Case B, at the end of 2017, is how could Huixiadan’s business model be sustainable and what it should do to withstand the competitive threats even as it tries to exploit opportunities in the traditional FMCG industry in China.

It can be used with MBAs, EMBAs and senior executives.

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CSS: 11: Strategy.