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We
call this the “Grenade Model” because the results
will be explosive and the grenade can always be tossed back
at you. This is the approach Herman Miller took. They went online,
telling channel partners that it's their way or the highway.
How do channel partners feel about this? As an executive at
Miller's second largest dealer said, "They've made their
dealer community an essential business partner over the years.
Now, they're saying let's fight them for this kind of business
on the Internet." Contract suppliers and retailers are
very unhappy about Miller selling online and see it as direct
competition. One prominent retailer said, "if a comparable
product was available today and the manufacturer guaranteed
not to compete with us on the Internet, we would drop Miller
immediately." Miller has lost dealers and retailers over
the strategy. There are a multitude of examples of major companies
who have done this and failed through lost market share, dealer
support and complete channel retaliation. |
