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Managing Channel Relationships

The Challenge: A $10 billion manufacturer of a key building system was faced with increasing channel complexity. The supplier’s traditional channels were consolidating and Big Box home centers continued to command a greater share of the market.

Assessment: Blue Canyon teamed with the client to map the complex customer chains with a particular focus on the channel participants. We completed an in-depth assessment of pricing along the customer chain – from the supplier, through the two-step channel structure, to the end customer – on a territory-by-territory basis. Through a systematic analysis we looked at the participant roles and responsibilities and the services provided by the channel partners.

Strategic Solution: Blue Canyon recommended that the supplier implement changes to its pricing strategies, incentive structures, and channel design to address local competitive issues. To help the client strengthen its leadership position across all territories, Blue Canyon designed new channel programs, business and “e” systems, and reward systems to support the amended channel strategy.

Results: The clients estimated that it earned an incremental 9% in profits based on these recommendations.

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