Question

How has Internet-based retail affected Global distribution channels??over 200words?

Answer 1

The global distribution channels has benefited largely because of its integration to the internet-based activities. The Supply Chain Management discipline, in this regard, has played an important role. The purpose of Supply Chain Management is to enable a linkage of the flow of goods from the raw materials to its end-users thereby including a broad network of Company’s various parties such as the suppliers, the intermediaries and finally the customers. When this network is managed with Enterprise Resource Planning (ERP) systems, then the flow of goods as well as money from one end to the other alongside flow of information in a unified way becomes more feasible. Now, with the advent of Globalization, as internet has made its way well with the ERP systems, and also with such activities in the designing of a firm’s Supply Chain network, there is higher efficiency established in the Global distribution channels that in turn gives rise to the income generation power of the firm and adds value to the end product that reaches to the customer.

The firm’s Supply Chain Management would therefore include effective marketing channels in its internet-based network designing part that could be typical to countries or regions in terms of the Market segmentation. However, the same may have an impact on the Global distribution channels. It is to be also noted that a Company’s distribution network can never be static and evolves in response to various scope available in a specified regions globally and the conducive conditions helping the same at an international level.

The retail distribution channels that are internet-based, further needs to be considered in order to undertake various crucial decisions. In this regard, the role of Supply chain is significant. In terms of the global network, the distribution of supply chain could be intensive or selective or exclusive, depending upon the Market segmentation. Intensive distribution is aimed at maximum market coverage; selective distribution is aimed at making the product available to selected dealers or retailers only in a given territory while an exclusive distribution is most restrictive form of market coverage. Based upon the category of classifications, under the Market segmentation, the firm’s supply chain design helps in easier differentiation of its offered products to the target audience. It further takes into consideration the Target market factors, product related factors and Company-related factors more efficiency and effectiveness of the supply network channel so resorted to which is all in turn depending upon the Market segmentation concept. Further it also enables to manage the channel relationships by empowering the channel, controlling the same and undertaking the channel leader role. In case of the service channels, minimizing the waiting time, managing service capacity and improving service delivery mechanisms also help in making the network efficient, more effective and differentiated from that of the others. Therefore, in this entire manner, Supply Chain Management has resulted in enhancing the Customer value.

For example, in countries such as China and Russia, there are constant political changes and the economies being unstable; it is believed that the application of the internet-based management technologies for the enterprises is also therefore limited. Hence so many firms are concerned about distribution issues when they move into new markets such as China and Russia thereby hindering effective Supply Chain Management. These countries are geographically vastly spread over a larger piece of land and the issue here arises as to link the Global logistics strategies with that of the logistic system typically prevalent in these countries. Therefore these constraints could be overcome if market segmentation is efficiently undertaken to cater to the peculiarities of each of these geographical segmentations. The Global distribution issues could be further addressed to by switching to the local Supply Chain Management network, all operating on internet, based upon effective market segmentation to avail the best from the host country though the same shall not be integrated to the global standards.