## Channels (Distribution System)
Definition: Channels are the distribution system by which an organisation distributes its product or provides its service.
> A wider and stronger channel gives a business a better competitive position AND acts as a barrier to entry for new competitors.
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## Three Types of Channels
| Channel Type | Focus | Key Strategic Question |
|---|---|---|
| Sales Channel | Intermediaries involved in selling the product to the end user | Who needs to sell to whom for the product to reach the end user? |
| Product Channel | Series of intermediaries who physically handle the product from producer to end user | How does the product travel physically from producer to buyer? |
| Service Channel | Entities providing support services for the product (during sales and post-purchase) | What services are needed to support the product through its lifecycle? |
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## Strategic Importance of Channels
- Channel analysis becomes critical when the business strategy involves scaling up and expanding beyond current geographies and markets
- Channels are "partners in growth" — they play a crucial role in internal strategic alignment
- A strong distribution network is difficult to replicate quickly → sustainable competitive advantage
> The three channels are distinct and each requires separate strategic planning. A gap in any one channel can undermine the entire go-to-market strategy.