Channel strategy transformation within an Internet -enabled channels environment: Findings and implications across five firms

The channel context for manufacturers and retailers is changing due to intensified market competition and emerging information technologies such as the Internet. The execution of Internet-enabled channel strategies by manufacturers and service-providers may significantly alter existing channel structures and processes. Despite the contributions of past marketing channels research toward understanding channel strategy end issues, important theoretical and managerial issues have yet to be addressed. Theoretically and managerially, there is a need for research that identifies the challenges facing executives as they seek to transform channel strategy within an Internet-enabled channel context. This research seeks to understand the complex managerial issues resulting from manufacturers\u27 or service-providers\u27 execution of Internet-enabled marketing channel strategies. I develop a grounded framework that examines channel strategy transformation within an Internet-enabled environment. This framework draws from the marketing channels literature and is based upon results from indepth interviews with executives involved in channel strategy at five manufacturing or service-provision firms, each from within a distinct industry and exhibiting varying degrees of Internet channel adoption. This research suggests five themes that illustrate the complex issues and challenges facing firms as they transition to the Internet-enabled channel context. First, all five firms involved in this research exercise some degree of channel control system in order to drive their markets and maintain channel relations with key channel intermediaries. Second, this research suggests the continued importance of physical location as an important channel strategy consideration. Third, these findings provide support for a multidimensional, process-based view of intrafirm and interfirm channel conflict. Fourth, this research suggests a reverse channel process in which consumers, empowered by richer and greater amounts of information accessible online, increasingly drive and control the exchange process. Fifth, these findings highlight the importance, as well as complexity, of channel convergence decisions. The key theoretical contribution of this research is that it begins to extend the marketing channels literature in areas such as channel control and conflict, reverse channel processes, and channel convergence. Managerially, this research provides a thorough understanding of the complex channel strategy considerations facing executives and managers at fans employing Internet-enabled channel strategies