Channel Structures of International After-Sales Service Networks

Abstract

The choice of an organizational architecture for providing after-sales services to customers spans two extremes. A firm may either supply the services itself, or it can supply them through an independent distribution network. Because of the importance of after-sales services both in establishing a firm's competitive advantage and in sustaining profitability, the choice of organizational design would appear to be of significant strategic importance. In order to explore this association, a comparative empirical study was made of the after-sales networks of two firms supplying international markets-one directly and the other through a network. Although there were trade-offs in the two organizations, there was equal success in providing customer service, which would suggest that a structure for this purpose does not exist. Instead, it was observed that contact near customer usage and devolved decision making were important in service success. Integrative devices, concerning both culture and knowledge, seemed to play a further role in maintaining these firms' competitive edge. In interpreting these results, network and temporary concepts were useful in describing processes of each organization. It was noted that the distribution channels for services were different from product distribution in both cases, which undoubtedly is of strategic importance in managing these operations.