Kumar reckons that many CEOs haven't yet appreciated what the growing power of large retailers means for their companies. "Put simply, you have to be the first or second brands in any given product category, otherwise you will end up competing with everyone else to manufacture the retailers own in-house brand. Unless you have a distinct value proposition, you can only differentiate on price." Brand deletion, SKU rationalization, and global customer teams, dedicated to individual retailers, are all part of this transformation.

Doesn't Kumar think the idea that retail is becoming global has been rather overdone? Look at how Walmart has stumbled in Germany. And many large retailers who have gone international are still buying locally. Maybe, says Kumar, but the trend is clear. "Today the top six retailers in the world account for 25% of the sales of Procter & Gamble. In a decade they will be half of P&G sales. The organizational implications of this change are truly mind boggling."

Yes, I argue, but that is food. What about other categories? Name one, says Kumar, with a dangerous glint in his eye. "Urrr...Well what about clothing - fashion - that is still much more fragmented." Kumar counts off the names on his fingers "Armani, Gap, Zara, H&M, Banana Republic... they are all global. And that is true of almost every major product category. Look at B&Q in DIY, Royal Vopak in chemical distribution, Expedia in travel."

"A good CEO has to force his company kicking and screaming into the new channels."

Kumar says this growing power means companies will have to reorganise around the needs of their largest customers. "Today, companies are still organised around countries and products, but what happens when the customer business development manager for Walmart accounts for greater sales than the country manager for France?"

It sounds persuasive. But, I point out, in most industries companies have tried centralising and failed. For instance, in the IT industry Compaq and Apple have both tried to move to Pan-European organisations and then moved back. "Yes," he says, "Companies do oscillate. But they never go right back to the old model. Power is gradually being concentrated. This has to be the case if a company is to remain the number one brand with the powerful retailers.'

Secondly, he sees a need for CEOs to ensure that their companies switch to the new channels on time. "History suggests that manufacturers tend to cling to the traditional distribution channels for too long. They pay too much attention to their existing partners complaints. Look at how long it took Goodyear in the USA to expand its distribution channels from traditional independent dealers to mass merchandisers, such as Walmart and Sears."

For Kumar, a good CEO has to force his company kicking and screaming into the new channels.

"Markets always changes faster than marketing. So you have to constantly change your channels." He reckons that CEOs should accept, and even welcome, channel conflict as the price of change. "If you don't have channel conflict, it generally means that you have gaps in your coverage of the market."