Manufacturers' and distributors' capabilities influencing dual channel choice

Abstract

PurposeMany manufacturers implement a dual channel strategy, which can be defined as the simultaneous use of integrated and independent channels of distribution for the same product line. This study employs the resource-based theory and examines how manufacturers' and distributors' capabilities affect manufacturers' choices of dual channel strategy. The study also examines how fit between organisational capability and channel structure affects channel system performance.Design/methodology/approachEmpirical testing was conducted using survey data collected from 262 Japanese business-to-business manufacturers. This study performed a multinomial logistic regression analysis to examine the antecedents of dual channel strategy and a t-test to examine its performance implications.FindingsThe results show that manufacturers' information capabilities and the availability of distributors' selling capabilities affect whether manufacturers choose a dual channel strategy, and that market turbulence moderates the effects of these two capability factors. The results also indicate that manufacturers can improve their channel system performance by choosing channel strategies that fit organisational capabilities.Originality/valueMost previous studies employ transaction cost theory to identify the factors driving the choice of dual channel strategy. However, these studies neglect the heterogeneity of resources/capabilities. Little is known about whether capability factors affect the dual channel strategy, and how this choice can be linked to channel system performance. By addressing this knowledge gap, this study contributes to enhance our understanding of dual channels.