Many companies have built lasting competitive advantage through their choice of sales
and distribution channels coupled with their ability to integrate that choice into a
coherent, well executed business model. On its own, no approach to sales or product
distribution is sufficient for competitive success. Rather, a complete business model
(Figure 1) includes sales and distribution as one of the Core Business Processes in concert
with Product/Service Offering, Differentiation Approach, Method of Capturing Economic
Value and Key Skills/Resources. These choices are linked; once a company picks a sales
and distribution channel, it limits its options on how it can achieve differentiation and
where it can capitalize on profit opportunities. For example, if a company sells through
distribution, it may have ceded any potential service business to the distributor.