The company had to choose between the revisions of traditional channels by creating a virtual network of local distributors, striking an alliance with the national distributor, or exit the market MRO.
Company Rockwell Automation Allen-Bradley unit considers how to deal with the threat of a national distributor in the maintenance, repair and overhaul (MRO) business for its industrial automation. National distributors were consolidating MRO channel distribution, offering national account customers a comprehensive solution for the needs of multichannel MRO. Allen-Bradley, who traditionally served its customers through high-touch, high-value-added local distributors, but this channel is insufficient for the needs of large customers MRO. The efforts of Allen-Bradley and other manufacturers to create industry-electronic sources consortium called SourceAlliance.com failed.
As A-B’s locked-in distribution network on the MRO side of the business was starting to feel like a liability to Ricklefs and national distributors not beholden to A-B were using their national presence, price competitiveness, and ability to integrate with manufacturers’ enterprise systems to steal large customers from A-B’s local distributors. But A-B could not afford to alienate its dedicated local distributors, who controlled almost all its current sales.
Ricklefs realized that his company’s market lead was steadily eroding because of the consolidation of A-B’s channels and the increasing power of national distributors. Hence raised many dilemmas as they should persuade the trend towards nationwide and integrated distribution or they should change the way A-B did business, or could it be addressed by adapting the current marketing strategy and distribution network and by what range of options should A-B consider in adapting its strategy. If the situation demanded drastic action, how could he convince A-B’s management and local distributors to try something new, given