Lesson 2 of 8 · All lessons in this module
- What a business model describes: customers and offering
- Channels: how the offering reaches customers
- Pricing: power, premiums and price discrimination
- Bundles, razors, freemium and subscriptions
- Value proposition, value chain and profitability
- Conventional business models and their variations
- Integrated case: two firms, same industry, different risks
- Business model innovation, network effects and platforms
Lesson 2 of 8 · 12 min
Channels: how the offering reaches customers
The channel strategy, selling and delivering through intermediaries, directly or through both, shapes revenue, cost behaviour, risk and comparability with peers.
In short
- Channel strategy covers two functions: sales and marketing (selling) and distribution or logistics (delivering).
- Key decision: which functions the firm performs itself and which it leaves to partners, such as wholesalers, retailers, agents, franchisees or installers.
- Traditional channel: the product is bought and resold by each intermediary (manufacturer → wholesaler → retailer → end customer).
- Direct sales: the firm sells straight to the end customer; common for complex, high-margin products and B2B markets with few, reachable customers.
- Direct sales give closer customer relationships and no rival products on the same shelf, but carry high, largely fixed costs.
- Omnichannel strategies combine digital and physical channels in one sale, for example order online and collect in store.
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