Channel Structure and Strategic Choice in Distribution Channels

Though marketing in general has adopted a strategic orientation, little attention has been given to strategy choices within distribution channels. The importance of marketing channel strategy decisions is highlighted by 1) their inherent long-term consequences and 2) the constraints and opportunities that they represent. The present paper incorporates strategic management theory into marketing channels literatures to examine the impact of different channel structures on the choice of a generic channels strategy. Specifically, the contingent effects of channel power/control and the degree of vertical integration are examined as they affect the choice between the generic strategies of overall cost- leadership, differentiation, focus, and combination strategies. Propositions are developed to stimulate interest in this area.