In the article Dealer network: The complexity of strategic decisions for manufacturers and dealer groups, various factors to be considered in dealer network development were highlighted. The complexity and the demands on management are immense. Increasing digitalization increases the complexity even more, as the market environment is becoming increasingly volatile, uncertain and ambiguous.
A specifically developed simulation tool can automatically map the complexity and thus make a decisive contribution to a tailor-made dealer network strategy in order to generate competitive advantages.
In the following, a few examples of input and output variables are used to illustrate the advantages of such a simulation tool and why it can improve the competitive position of manufacturers and retail groups.
Examples for the tool input:
- Customer groups: The ratio of online and offline purchasing customers can be selected here. Different characteristics of how “digital” or “analog” a customer behaves along the customer journey can be taken into account.
- Retail formats by region: A mix of different retail formats can be selected, such as centers for test drives, vehicle handovers or used car locations, paint and body stores as well as virtual showrooms. In addition, the planned region can be selected for each format (Metro, Urban, Rural).
- Business models: Here, the planned sales figures can be selected via various business models such as private individuals, small and big fleets, car subscription or car sharing.
Examples of the tool output:
- Distribution costs: The distribution costs for the selected simulation are calculated based on the various input variables in order to evaluate the efficiency and profitability of the distribution model. For example, the tool can analyze how a higher number of online customers affects the cost structure compared to a model that relies heavily on stationary retail formats.
- Required space: Depending on input variables such as customer groups and retail formats, space requirements can vary, which is particularly important for investment planning. This precise space planning represents a decisive advantage for manufacturers and retail groups, as they can react flexibly to market developments and customer requirements. At the same time, the efficiency of sales processes can be increased by reducing process costs.
The simulation tool makes it possible to run through different scenarios and dynamically adapt sales costs to different sales strategies. This data-based prediction and optimization enables manufacturers and retail groups to significantly reduce their investment and process costs, as resources can be better planned. The simulation tool also enables potential bottlenecks and inefficient processes to be identified at an early stage and countermeasures to be initiated in good time.
A tailor-made dealer network strategy can therefore strengthen the company’s competitive position.