Ask the Board – August 29, 2016 | LYLE BUNN

0

What is the most controversial issue in the digital signage industry right now and why?


Channel conflict. As a range of suppliers battle for available business, three forces are conflicting. Original equipment manufacturers (OEM) of hardware, in particular, need their production lines to flow into market uptake. Distributors compete against each other as they serve a warehousing and fulfillment function as well as being a sales arm for the products they list. Solution integrators and internal information technology organizations then serve as the final point in the supply chain.

The channels between OEM and the end user are numerous. The conflicts do indeed create a competitive friction, and competitors sharpen each other’s skills. But this benefit of channel conflict is overshadowed by the confusion it causes in the marketplace. Too many options lead to “analysis paralysis,” and the level of confidence that the optimal sourcing decision is being made is easily eroded. In this case, “good enough” becomes the sourcing theme.

Changes to the supply channel including new providers, and go-to-market approaches exacerbate the problem. The providers that can declare “we are the manufacturer” or “we deal direct with the manufacturer” are often the credible end-users. This puts further competitive pressure on the firms that comprise the supply chain, and this pressure commonly results in pricing discounts or incentives to purchase.

Supply confusion and price discounting does not for a successful market make. 

 

About Author

Advisor, Analyst, Educator
BUNN

MEMBER OF THE DSE ADVISORY BOARD
Industry Consultants Council

Leave A Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.