Currently, our go-to-market structure has overlapping channels that are causing friction amongst downstream channel partners, specifically the value added resellers (VARs). Such overlapping occurs when we implement a "one-size-fits-all" strategy for each of our channels. As we introduce new technologies and products, we need to ensure that existing VAR, systems houses, and telecom divisions' interests are being equally protected.
RECOMMENDATIONS
1. Eliminate direct channel (Figure 1)
2. Utilize channel power to control price and final distribution
3. Implement exclusivity of VoIP products for existing data VARs
4. Widen discount level increments in Partner Program Pyramid (Figure 2)
ANALYSIS
Recommendation Analysis #1: My first concern is the waste of resources and lack of focus on selling hardware directly to customers. I believe that by eliminating this channel we will be in a better position to serve the channels that provide value to customers. Many VARs have concerns that a program where we sell directly to consumers (specifically through the internet) will eventually erode their business completely. A more effective deployment of resources, such as investing in other established channels, can create better service for both the customer and consumer.
Recommendation Analysis #2: My second concern pertains to controlling how our product is bundled through the telecommunications service providers (TSP). As you know, the market price of Cisco products are being diminished due to the marketing and promotional tactics of these companies (e.g. giving our product away for free with service packages). This also leads to a diminished brand value and customer perceptions of our products. One way to eliminate t ...