New markets are new technologies

Galleria Vittorio Emanuele II

Most companies rely on third-party distributors to deliver value to customers. These are partners, retail, resellers. While it is important to have distributors, it is also risky if their distribution system is old. The best example is relying on brick & mortar stores (old) while customers prefer e-commerce (new).

To minimize risk, companies must always search for new ways to distribute. And new distribution should be defined by technology, not a territory. Technologies are the most dominant factors in distribution and selling.

Once a new distribution channel is found, it is important to replicate the relationship company had with old partners. If they have serviced old partners well, they should service the new partners in the same way, with technology added.

Also, if the new partners are weak, it is important to be patient, develop their business, and not enter in direct competition with them. Eventually, the market will develop and an opportunity to access their distribution will be lost because potential they have become competitors. It is better to develop the market than to exploit it.

These strategic decisions always start with accepting that the previous way of thinking cannot remain dominant. The biggest change in developing new distribution is to accept that new markets are new technologies.

Written by: Nikola Tosic
Publishing date: 29 Oct 2018