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Development in Timber Product Distribution Channels and Its Consequences for Suppliers: A Case Study in the British Market
Linköping University, Department of Management and Engineering, Industrial Marketing and Industrial Economics. Linköping University, The Institute of Technology.
Linköping University, Department of Management and Engineering, Industrial Marketing and Industrial Economics. Linköping University, The Institute of Technology.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Purpose: Home improving is an attractive segment of retailing, benefiting from long-term demand for more new housing and more frequent home renewal. Many kinds of building materials and products are traded in the market. In recent years, a transformation has been observed in the timber material and products distribution channels, in which Do-It-Yourself (DIY) retail chains are pushing more and more responsibilities back to their suppliers. Especially for low value and bulky wood products, there are increasing requirements on suppliers to support retailers’ supply management and in-store business development. This paper aims to investigate the strategic challenges arising from this transformation, thereby obtain a better understanding of building material distributors’ requirements in supply and their consequences for suppliers.

Research Approach: The research approach was primarily exploratory. Qualitative multiple case studies with respondents from wood-based products suppliers and leading DIY retail chains and builders’ merchants in the UK market were conducted. Semi-structured interview and nonparticipant observation were used to collect data.

Findings and Originality: The strategic aspects of the distribution channel, especially the distribution channel for low value and bulky products-wood based products, have received little research attention. The results of our case studies show that multi-location strategy is common for retailers. Manufacturer brands are almost non-existing in the timber section, where retailer brands are dominate. This study also indicates that instead of passively taking over the delivery service from retailers, supplier’s proactive strategic moves, such as becoming a “one-stop shop” supplier for retailers by providing complete product portfolios and wide range of service solutions, are changing the structure of supply chain.

Research Impact: It is important to note that distribution channel, a field combining marketing and logistics, provides rich research opportunities. From a theoretical perspective, this paper aims to provide insights into the strategic management of distribution channels and its impact on the value of offerings.

Practical Impact: Findings from the case studies suggest that retail chains are looking for large suppliers that carry comprehensive product assortment and offer distribution solution as well as in-store support. Consequently, suppliers that used to be production oriented need to widen their focus further down the supply chain, in order to develop offerings that are more aligned with the development in the retail markets. Strategically managed distribution channel is an area that deserves suppliers to pay attention on because it can be a source of long-term competitive advantage.

Keyword [en]
Distribution channel, DIY retailers, builders’ merchants, timber products
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:liu:diva-88479OAI: oai:DiVA.org:liu-88479DiVA: diva2:604214
Available from: 2013-02-08 Created: 2013-02-08 Last updated: 2013-02-08Bibliographically approved
In thesis
1. The Role of Suppliers and Resellers: Cases of Timber Product Distribution Channels
Open this publication in new window or tab >>The Role of Suppliers and Resellers: Cases of Timber Product Distribution Channels
2013 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation aims to explain the impacts of distribution channel developments on the roles of timber product distribution channel actors. The role of channel actors in this dissertation is defined as the structured behaviour pattern that combines activities and resources in distribution channels. Three phenomena and their impacts on channel actors’ roles are addressed: (1) shifts in manufacturers’ supply chain position, (2) the changing nature of manufacturing companies’ offerings, and (3) concentrated markets with enhanced resellers. The research builds on case studies focusing on timber product distribution channels. The dissertation consists of an extended summary, six papers, and a grand case description.

This dissertation has produced several findings. First, reseller developments have driven changes in the retailer supply chain structure and have placed pressure on manufacturers. Manufacturers’ downstream vertical integration and their move to a total offering approach can be seen as countervailing effects on reseller developments. These effects have result in a new type of role: the integration role, while the significance of the service role has increased. Second, resellers have gained a central position in distribution channels, not only because they are in good position to exploit the clones to customers, but also because their business has extended from being suppliers’ distribution partners to customers’ supply hub.

Theoretically, this research contributes to the field of distribution channels by proposing definitions of roles and the roles of channel actors that allows for a better understanding of the dynamics of distribution channels. This research also proposes a distributionsupply view of vertical systems that highlights the roles played by resellers in defining offerings to customers, shaping supply chain structures, and developing and launching new products.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2013. 275 p.
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1502
Keyword
Distribution channels, roles, role changes, downstream vertical integration, offerings, timber products
National Category
Economics and Business
Identifiers
urn:nbn:se:liu:diva-88483 (URN)978-91-7519-687-9 (ISBN)
Public defence
2013-03-01, Planck, Fysikhuset, Campus Valla, Linköpings universitet, Linköping, 10:00 (English)
Opponent
Supervisors
Available from: 2013-02-08 Created: 2013-02-08 Last updated: 2013-02-08Bibliographically approved

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Guan, WeiRehme, Jakob

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