Will Stihl’s strategy of sales through small dealers sustainable ?

An article in Bloombergbusinessweek (April 28, 2014) titled “Big-box Cutter” describes Stihl’s strategy to sell chain saws through small dealers, avoiding big box sales or internet sales. By selling through small dealers for whom they account for a significant portion of the inventory, service provided by the 8,500 dealers generates the $1.3 billion in sales. Will dealers located close to large stores who sell Stihl products exclusively provide a sustainable retail supply chain ? Will Stihl’s focus on product quality and performance, even at higher price and service levels, get customers to make a separate trip to purchase products ? Does the use of dealers to do repairs during the warranty period, which provides them additional revenue streams, provide the combined financial incentive for the independent dealers ?

About aviyer2010

Professor
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