A systems dynamic approach to channel management

Abstract

The purpose of this paper is to explore from a systems dynamic modelling approach ways in which to manage distribution channels in the control and instrumentation product market. In this market multi-faceted product lines, technological knowledge and the position of the product in its life cycle play important roles in the manner in which these products are diffused into the market. Due to the fast pace of emerging technologies, it is becoming increasingly difficult for manufacturers to keep their routes to the markets aligned to ensure profitability and customer satisfaction. Aims of the paper include the following: to asses whether driving factors identified by way of preliminary research case studies, qualitative methods and inductive reasoning are realistic and how the identified factors could be used within a systems dynamic modelling approach to understand the value additions derived from a distribution channel for the various types of product lines. In conducting the research, unlike many studies using qualitative methods, this paper additionally employs system dynamics simulation to develop an analysis of different scenarios that can be used by manufacturers in their channel management approach. This paper contributes to the field of technology business strategies and planning by introducing a systems dynamic model that can be of assistance to technology manufacturers to ascertain the appropriate route to market for their various product lines