Disintermediation-Activity Matrix: A Framework for Adoption in the Chemical Industry.

Publication Type:
Journal Article
Citation:
The Journal of Global Business Management, 2014, 10 (1), pp. 87 - 98
Issue Date:
2014-04-30
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There is evidence to show that chemical distributors are being disintermediated by their suppliers. Extant literature has only touched upon where, when and the extent to which disintermediation is occurring. This article examines the drivers that can trigger suppliers to disintermediate their distributors or to leave the distribution channels intact on a country, business unit or product-wide basis. The paper concludes with a proposed Disintermediation-Activity Matrix framework that can serve as a guide for suppliers and distributors to determine strategies for a variety of situations. This article is based on a review of the literature on current and recent trends in chemical distribution channels, complemented by the vast chemical distribution experiences of the main author. The article critiques the extant literature and contributes further understanding of the disintermediation phenomena by proposing a practical framework. Chemical distributors are evidently being disintermediated by their manufacturers. However, manufacturers and distributors diverge in their views of why disintermediation occurs, and often there is miscommunication by the manufacturers to their distributors. The factors that could influence manufacturers to take over the roles of their distributors are analyzed and systematically laid out in the Disintermediation-Activity Matrix (DAM) framework. In analyzing the marketplace either as a country, business unit or product-wide basis, the matrix will show whether distributors can be disintermediated and the level of difficulty in disintermediating for each type of activity.
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