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Download PDFBivona, Enzo with Francesco Ceresia, "Designing Long Term Oriented Policies to Build Strong Manufacturer-Dealer Relationships: A System Dynamics Approach", 2005 July 17-2005 July 21
- 2005 July 17-2005 July 21
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In todays economy all manufacturers need to pay attention on how to build strong and long-term relationships with their dealers chain. In fact, it has been demonstrated that short term policies aimed to provide dealers immediate benefits (e.g., price discounts) may prevent the development of long term and fruitful relationships. Also supporting dealers in promoting manufacturers products has been proved as a sustainable strategy in long run. Another implication of manufacturers bounded policies refers to their inclination to reinvest significant amounts of their sales revenues in advertising and product portfolio improvement, without taking into account the need to invest in dealers human resources, to make their strategies sustainable. Based of the above remarks, this paper aims to demonstrate the usefulness of a system dynamics approach in involving both manufacturers and dealers in strategic reasoning. Empirical evidence arising from a research project conducted by the authors with a manufacture operating in a high-tech industry, shows that using system dynamics as a methodology to support communication and learning may act as a significant lever to design successfully long term oriented policies. Such policies ought to increase dealers skills and motivation, and improve potential customers awareness of product benefits, at the same time.
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