Rockwell Automation: The Channel Challenge

Rockwell Automation's Allen-Bradley division was considering how to deal with the threat posed by national distributors in the maintenance, repair and overhaul (MRO) business for its industrial automation products. National distributors were consolidating the MRO distribution channel, offering national account customers an integrated multi-channel solution for their MRO needs. Allen-Bradley had traditionally served its customers through high-touch, high-value-added local distributors, but this channel was inadequate for the demands of large MRO customers. An effort by Allen-Bradley and other manufacturers to create an industry-wide electronic sourcing consortium called SourceAlliance.com had failed. Now, the company had to choose between redesigning its traditional channel by creating a virtual network of local distributors, striking an alliance with a national distributor, or withdrawing from the MRO market. It had to contend with difficult channel conflict issues in choosing a channel strategy.