The distribution of products and services is strongly dependent on communication and delivery possibilities. The technologies of the 4th Industrial Revolution, that were triggered in 2020 by the COVID-19 crisis, introduced a change in the distribution models, which established new possibilities that were not manageable before.
The change of distribution based on the integration of virtual communication as a standard in the world became necessary for healthcare reasons. It allowed integrating from end to end the producers of goods and services and their final customers and users.
The Unicist Distribution 4.0 model can be synthesized by:
- The integration of the value chain from the producer to the consumer or user. It implies integrating distributors and clients as part of the organization.
- The use of a client centered management model that ensures results, customer orientation and the generation of value.
- The development of a virtual relationship model that allows building complementary relationships in a virtual environment.
- The functionality and the operation of an integrated business model that needs to be transparent and reliable for all the members.
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The Context of Distribution 4.0
Virtual relationships require a superior level of functionality than face-to-face relationships because the virtual context reduces the impact of the emotional aspects that usually buffer problems or conflicts. Therefore, this model requires, on the one hand, having a real potential demand of a market that needs to exist and be believed. On the other hand, the business has to be profitable, which means generate direct profits and collateral profits that benefit the members of the value chain.
This requires having a structural approach to business that ensures a sustainable evolutionary business model for the members of the value chain. This is only possible for organizations that adapt and evolve in and with the environment.
The model itself is integrated by a business model that fosters expansion, a client centered management model that fosters client orientation and a virtual relationship model that fosters stable virtual relationships among the members of the value chain.
The Structure of the Distribution 4.0 Model
The 4th Industrial Revolution is focused on increasing the adaptability and customer orientation of businesses. The purpose than underlies these two actions is the need for business expansion. Therefore, the purpose of the business model implicit in Distribution 4.0 is the building of sustainable business expansion.
The basic condition for this model is that there is a potential market that has a size that allows expanding the business and is based on a growing trend. The catalyst of the business is that its profitability in the short and long run has been confirmed. This profitability is sustained by product differentiation and is affected by the action of competitors.
Sustainable business expansion begins by market expansion, which necessarily requires integrating differentiated products / services with the use of expansive marketing actions. These actions allow growing based on the natural segments of the value propositions and on expanding towards the adjacent segments.
The business expansion and the market expansion become functional when the business model fosters an integration with the market. This integration is based on using the virtual communication tools to integrate providers, distributors and customers / clients in a way that allows establishing legitimate profitable businesses.
The Maximal Strategy
The maximal strategy of the model is based on the use of the Client Centered Management model that needs to be adapted to the characteristics of the business, the market, and the products / services.
This strategy needs to begin by generating the necessary results assurance for the company that allows integrating growth with profitability. Once this approach has been conceived, it is necessary to focus on clients to ensure their benefits, which allows building the necessary competitive advantage to grow. The core of client orientation is being able to propose and deliver a superior value proposition to benefit the needs of the customers.
When this has been achieved, it is necessary to sustain the client orientation by ensuring the added value that is being delivered. The assurance of added value is the catalyst of the minimum strategy that ensures the possibilities for developing transparent businesses, which is a basic condition to develop expansive virtual relationships.
When the value delivery is ensured, the results assurance becomes confirmed. The maximal strategy requires confirming the functionality of the business processes following the rules of client centered management.
The Minimum Strategy
The minimum strategy of the model is based on the need of building structural reliable relationships using virtual media. This eventually includes face-to-face relationships which are a way to make the virtual relationships bearable.
The purpose of the virtual relationships is the establishment of reliable complementary relationships. When the goal of establishing complementary relationships has been achieved, it becomes necessary to ensure the functionality of the virtual activities.
The major difference between face-to-face activities and virtual activities is that the latter requires a higher level of functionality because there is no possibility of generating influential personal relationships. In virtual environments, the influence is based on the functionality of the activities that are developed.
The establishment of personal virtual relationships is a basic condition in this model. This requires a superior level of empathy that needs to be sustained by having the necessary information of the parts involved.
To access this information, it is necessary to have a business intelligence service that provides the information of the characteristics of the people who participate in this relationship building processes. This requires that the parts involved be peers, seen from a business point of view.
The minimum strategy can be developed when the personal relationships can be built and sustained. Thus, the Distribution 4.0 model can work expanding the business and the market of companies.
The Types of Distribution 4.0 Models
There are four possible distribution models:
- Business Driven
- Relationship Driven
- Specialization Driven
- Integration Driven
The business driven model is based on establishing transparent complementary relationships between the company, the distributors and the customer / clients.
This business model is based on establishing the value that needs to be provided by the distributors and sustained by the brand of the provider. The core of this distribution model is the assurance of the functionality of the solutions provided.
This business model is natural in environments where the clients expect a sort of outsourcing processes for the provision or goods as a service. The expansion of the market is based on the use of market segmentation and the communication of the value added by the distributors.
The relationship driven model is based on the capacity of expanding relationships and is sustained by the relationships that have been built. The construction of relationships is sustained by a structural functional relationship management approach.
The core of this model is the development of complementary functional relationships that ensure the delivery of value to the clients and the management of transparent relationships where the clients / customers are aware of what happens in the organization. It implies that the brands of the provider and the client are asymmetric with negative slope or symmetric.
This business model is natural in markets where the delivery is differentiated, and the products or service provided have a significant participation in the value chain of the clients. The expansion of the market is based on the use of market segmentation and the expansion of the relationships of the distributors based on the asymmetric brand of the provider.
The specialization driven model is based on the assurance of a significant value proposition to clients. It implies establishing open relationships with clients / customers supported by the specialized knowledge of the participants in the value chain.
This model requires having a high level of specialization in the development of solutions. It requires having a continuous education model that includes the participation of clients. This educational model is virtual and includes the development of real solutions by the participants.
This business model is natural in high tech solutions markets where the functionality fully depends on the adequate use of the technologies. It requires building up a qualification model for the participants for the building of solutions that allows empowering the image of solution providers. The expansion of the market is based on the use of market segmentation and the positioning of the superior technologies including educational programs for clients / customers.
The integration driven model is based on the development of a spirit the corps that includes the provider, the distributor, and the client. It requires being sustained by the high level of the technology and the segmented power of the brand.
This model requires envisioning the market and the possibilities of technological evolution of such market. It is based on fully understanding the subjective value of the propositions that integrates their use value, the reference value, and the opportunity value.
This business model is natural in markets that are driven by a high speed of technological evolution. These markets require continuous applied research activities and technological updates to be able to influence the market by developing leading solutions. The expansion of the markets is based on the use of market segmentation, the development of sponsors, and the contagiousness of the solutions.
Unicist B2B Distribution 4.0 requires an integration of the participants in a system. This participation requires having a spirit de corps which necessarily is based on the brand power and the differentiation of the value propositions of the company. Unavoidably, there are marginal distributors who cannot participate in the Distribution 4.0 model.