It’s the distribution, stupid!

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The American system of distribution is dysfunctional and favors the interests of huge retail chains at the expense of manufacturers. Accustomed to working in this imbalanced system, American managers think they have no choice but to cede control of distribution by placing it into the hands of megadistributors, and for the most part, they are correct. However, in high-growth emerging markets, distribution channels are still malleable, providing manufacturers with the opportunity to shape and mold the way distribution takes place. We argue that firms should lay aside their dysfunctional patterns of dealing with distributors when they leave America and, using the recommendations resented here, take back control over their products and operations in international markets.

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