"Dell uses a more intricate network of intermediaries than are used in traditional ‘indirect’ channels."

Now, Atea gives seminars to buyers to enable them to calculate the total cost. They can show big companies like Skanska precisely how much they can save by going for a complete Atea solution. In one case, a large Swedish multi-national now pays a fee per month per user for its PCs - everything included.  We are seeing the same ‘power by the hour’ approach being adopted in other industries, so that the customer only pays for the use of the machine.

To do all this Atea relies on a network of third party service providers – logistics operators, banks and so on.

RTM: So all this means that Atea’s customers can tailor make their own solution?

LG: Precisely! And Atea is creating completely new services to meet demands which customers may themselves, only dimly perceive. For example it is very clever at recycling old PCs.  In Sweden this is now the rule, but there are huge issues.  For instance, all the hard drives have to be erased in such a way that confidentiality is not breached.

RTM: So you see this approach as the future?

LG: Exactly. This is where the world, in general, is increasingly moving. We have to provide the solution that the customer wants, working with a whole network of others, whose roles are often more important than our own.   This requires humility and the ability to look long and hard beyond the parapets of our own comfortable corporate world.

Learnings
- Look beyond the traditional channel model

- Focus on the customer experience and how you can improve it through routes to market

- Challenge best practice assumptions on distribution

Lars-Erik Gadde’s research interest is focused on the exchange processes among companies in business networks. These processes are analysed from two perspectives.

The first concerns purchasing behaviour and purchasing strategies on the buying side, while the second deals with distribution strategies and distribution system dynamics on the selling side.

He is the author and co-author of a number of books and articles, among which some of the recent include ‘Managing Business Relationships’ (Wiley 2003, together with David Ford, Håkan Håkansson and Ivan Snehota) and ‘Supply Network Strategies’ (Wiley 2001, together with Håkan Håkansson).

Gadde is a leading member of the Industrial Marketing and Purchasing Group, a European academic school which adopts a rather different perspective from that followed by US business school academia. It tends to be more holistic, looking at overall systems and pioneering the network approach, which avoids concepts such as channels.

IMP members often spend years (working with industry)  on empirical, long-term research focused on large companies. You can find out more at www.impgroup.org