Reaching the Bottom: UniGlobe's Small Local Stores Dilemma

  • Reference: HBS-603114-E

  • Year: 2001

  • Number of pages: 12

  • Geographic Setting: Philippines

  • Publication Date: Feb 3, 2024

  • Fecha de edición: Apr 20, 2006

  • Source: HBSP (USA)

  • Type of Document: Case

  • Industry Setting: Retail trade

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Description

To distribute products to very small retailers in a very fragmented retail environment, the local subsidiary of a large consumer products company created an innovative distribution mechanism. The subsidiary's Small Local Stores division employed middlemen who distributed vans full of consumer products throughout the Philippines. The channel was growing rapidly, but it was the company's least profitable. Now the subsidiary had to decide what to do. Should it try to squeeze more margins out of the channel, even if that would lower the middlemen's incentives? Should it scrap the channel altogether? Or should it try to build an internal capability to reach the smallest stores, even if it involved significant capital expenditures? Regional management was due to arrive and the company had to come up with a plan.

Keywords

Collaborative innovation Disruptive innovation Distribution Groupware Innovation Marketing channels Multibranding Patents Sales Service management