Channel Conflicts
Channel Conflicts & Disintermediation
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Explanation and Definition:
In Wardley Mapping, Channel Conflict is a deliberate strategy: introduce or exploit tension between distribution channels to reshape value flows in your favour. This could involve launching a direct-to-customer offer that undercuts partners, or favouring one reseller to pressure others. The resulting conflict destabilises incumbents, forces renegotiation, and often accelerates commoditisation.
Disintermediation is one flavour of this—bypassing traditional intermediaries to own the customer relationship. But the essence of channel conflict is control: using friction between routes to market to gain leverage and force evolution.
Value Proposition:
The core value of a channel conflict strategy isn’t just efficiency—it’s strategic control. By introducing or exploiting conflict between distribution channels, a company can: • Compress margins across the value chain. • Destabilise incumbent partners. • Accelerate commoditisation where advantageous.
Disintermediation—bypassing resellers or agents—can reduce costs and increase speed, but more importantly, it enables: • Direct ownership of the customer relationship. • Access to unfiltered data and feedback. • Faster iteration and tighter feedback loops in product, service, and GTM.
Control over brand, pricing, and customer experience increases optionality and agility. With fewer dependencies, a company can enter or exit markets faster, iterate more rapidly, and avoid friction from legacy channel politics.
This is competitive positioning rather than operational benefit: the ability to move faster, know more, and dictate terms.
Execution Methodology
Executing a channel conflict strategy requires clarity of intent and tight control over commercial dynamics.
If you already have partners, don’t ask for permission—signal direction, not debate. Make it clear what the new channel is for, who it’s targeting, and what the rules are. Avoid ambiguity; it breeds resistance.
Tactics include: • Separate brands or SKUs for direct vs. partner channels to limit perceived cannibalisation. • Segmented offers (e.g. geographies, verticals, pricing tiers) to avoid direct overlap. • Controlled pricing: Enforce MAP/MSRP if retaining resellers, or abandon them and optimise pricing directly.
If going omnichannel, align incentives ruthlessly. That might mean: • Exclusive bundles or support tiers via one channel. • Data sharing agreements. • Partner rewards tied to strategic goals, not just volume.
To minimise noise: • Avoid over-distribution: fewer partners, better managed. • Run tight onboarding and governance to avoid friction. • Control the narrative: frequent updates, pre-emptive communication, and assertive account management.
The goal isn’t to please partners, it’s to control evolution. Channel conflict done well increases leverage, compresses margins, and gives you strategic options others don’t have.
If you’re spending more time managing partner relationships than shaping market behaviour, you’ve likely inverted the power dynamic. Reclaim it.
Real-World Examples
- Apple – Retail Stores vs. Carriers & Resellers • What they did: Launched Apple Stores to sell direct, bypassing telcos and traditional retail partners. • Conflict: Undermined carrier subsidies, disrupted high-street electronics retailers, and removed control over sales experience. • Strategic win: Took full control of brand, pricing, customer experience, and created a high-margin direct channel. • Bonus: Eventually forced carriers to play by Apple’s terms to retain iPhone access.
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- Amazon – Marketplace vs. 1P Vendors vs. Own Brands • What they did: Operates multiple overlapping sales models—acts as a retailer, runs a marketplace, and pushes private label brands. • Conflict: Constant tension between Amazon’s own products, marketplace sellers, and 1P vendors. • Strategic win: Leverages data and price visibility to pressure vendors, undercut competitors, and force pricing discipline.
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- Tesla – Direct-to-Consumer vs. Dealerships • What they did: Refused to use traditional dealerships. Built a direct sales and service model. • Conflict: Open legal battles with dealership lobbies in multiple US states. • Strategic win: Full control of customer experience, margin structure, and real-time pricing. No middlemen, no brand dilution.
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- Dell – Online Direct vs. Channel Sales • What they did: In the 90s/early 2000s, sold PCs direct via web while competitors used resellers. • Conflict: Crushed margins for rivals relying on distribution. • Strategic win: Became price/performance leader with faster cash cycles and inventory turns.
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- Google – Pixel Phones vs. OEM Partners • What they did: Launched its own branded phones despite Android being licensed to OEMs (Samsung, LG, etc). • Conflict: Competes directly with partners in the Android ecosystem. • Strategic win: Showcases Android as Google intends; applies pressure on OEMs to keep pace with quality/features.
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- Nike – Pullback from Amazon & Some Retailers • What they did: Cut ties with many retailers and exited Amazon to focus on DTC (Nike.com, apps, own stores). • Conflict: Disrupted wholesale partners, caused inventory pushback. • Strategic win: Higher margins, better customer data, stronger brand control.
When to Use:
Use channel conflict when you need to shift power, increase control, or accelerate evolution in your value chain. It’s especially potent when: • You’re stuck behind gatekeepers (e.g. retailers, platforms, distributors). • Partners are slow, margin-heavy, or blocking innovation. • You need direct access to customers, data, or feedback loops. • A disruptive GTM shift (e.g. DTC, subscription, digital marketplace) can create asymmetry against incumbents.
It’s also a powerful tool when entering new markets—using a direct model to learn quickly, then using that leverage to reshape partner terms later.
When to Avoid:
Avoid it when you don’t yet have the leverage to sustain the fallout. If your product lacks differentiation, or you’re overly dependent on channel partners for volume, conflict can backfire—leading to channel revolt, lost reach, or reputational damage.
Also avoid if: • Your margins can’t support a direct model. • The customer journey genuinely benefits from partner value-add (e.g. high-touch sales, complex integration). • You don’t have the operational discipline to run multiple channel strategies cleanly (e.g. pricing consistency, brand coherence).
Channel conflict is a strategic weapon, not a default. Use it when you want to force movement—not when you’re still finding your feet.
Leadership Challenges:
Channel conflict creates internal and external friction—by design. Leaders must navigate: • Internal alignment: Sales, marketing, and partner teams may resist moves that threaten relationships or existing incentives. You’ll need to rewire comp plans, metrics, and mindset. • Courage under pressure: Expect lobbying from partners, board concerns, and pushback from legacy teams. Weak signalling or half-measures invite confusion and stall progress. • Strategic clarity: You must hold and communicate a crisp narrative—why the shift matters, what will change, and how it will be governed.
Leading through this isn’t consensus-driven, it’s conviction-led.
Required Leadership Skills:
• Strategic clarity – Articulate trade-offs and long-term intent with precision. • Change orchestration – Align incentives, restructure teams, and shift behaviours under pressure. • Narrative control – Shape internal and external messaging to avoid fear, doubt, and resistance. • Conflict tolerance – Stay steady through backlash, noise, and political friction. • Stakeholder management – Handle partners, execs, and internal factions without diluting intent. • Decisiveness – Avoid paralysis. Move with speed and confidence when momentum matters. • Systemic thinking – See second-order effects across GTM, ops, product, and finance.
Ethical Considerations:
Measuring Success:
• Increased margin capture – Higher per-unit profitability through reduced reliance on intermediaries. • Direct customer growth – Sustained increase in DTC revenue or adoption of the new channel. • Improved customer insight – Faster feedback loops, better data quality, and actionable intelligence flowing into product and marketing. • Partner compliance or exit – Legacy partners adapting to new terms, or exiting without damaging overall growth. • Tighter GTM control – Greater consistency in pricing, branding, messaging, and customer experience across channels. • Faster iteration cycles – Reduced time to launch, test, or adjust offerings due to fewer channel bottlenecks. • Resilient narrative – Internal and external stakeholders aligned to the strategic rationale, with minimal confusion or rebellion. • Strategic optionality – New paths opened (e.g. bundling, loyalty, vertical integration) that were previously blocked by partner dependencies.
Common Pitfalls and Warning Signs:
• Partner trust: If long-term partners are blindsided or undermined without warning, it can damage reputations and future collaborations. The ethical failure isn’t in creating conflict—it’s in doing so covertly or deceptively. • Dependency exploitation: Smaller partners may be heavily reliant on your product. Using dominance to squeeze margins or replace them without just cause can edge into predatory behaviour. • Data asymmetry: If you use customer or market data from partners to launch competing offers (e.g. Amazon Basics model), be aware of ethical and legal boundaries. • Customer confusion: Parallel channels with inconsistent pricing, service levels, or product access can erode trust. Ethical leadership demands clarity. • Internal misalignment: Ethically, employees deserve transparency—hidden agendas or sudden pivots that contradict prior commitments can damage morale and integrity.
Strategic Insights:
Channel conflict is not a standalone tactic. It’s a vector for power reconfiguration. Pairing it with Wardley strategies amplifies impact: conflict can erode inertia, collapse dependency, and reshape ecosystems. The mistake isn’t using it, it’s using it in isolation, without coordinating with enabling and defensive plays.
- Channel Conflict is a Forcing Function
Inertia dominates ecosystems. Partners, internal teams, and even customers often resist change. Channel conflict can be used deliberately to force movement—accelerating commoditisation, pricing clarity, or customer expectations. You’re not just shifting GTM; you’re reshaping the market landscape.
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- It’s a High-Leverage Move for Late-Stage Evolution
From a Wardley Mapping perspective: • When a component is moving from product to commodity, channel conflict helps strip out inefficiencies. • By bypassing rent-seeking intermediaries, you remove friction that’s holding back industrialisation. • It can compress the value chain, freeing up capital and focus for building higher-order capabilities on top.
Use it to create enabling platforms, not just to cut costs.
- It Changes the Power Map, Not Just the Value Chain
Strategy isn’t just about efficiency—it’s about power. Channel conflict changes who holds leverage: • Own the customer → own the data → shape demand. • Own the distribution → set pricing → influence competitors.
It’s a structural reallocation of power, not just a business model shift.
- Conflict Can Be Fractal and Layered
You’re not limited to a single disruptive move. Smart organisations layer their conflict: • Compete with partners on the surface (e.g. pricing, availability), • While simultaneously commoditising the ecosystem underneath (e.g. APIs, automation, tooling).
This creates strategic pressure from multiple angles, forcing adaptation or exit.
- Moral Authority Matters
The narrative around conflict influences how it lands. If the shift is framed as customer-first, market-driven, or evolutionary, you’re more likely to retain moral legitimacy—even while playing hardball.
Key Questions to Ask:
• Who controls the customer relationship today—and should that change? • Where are the margin sinks in our value chain? • What data are we not getting—and who’s sitting on it? • Can we operate a direct channel without operational fragility? • What would our partners do if we bypassed them tomorrow? • Do we have enough leverage to withstand short-term pushback? • What channel structures are creating strategic inertia? • Are we prepared to clearly signal intent and handle the fallout? • How will this accelerate evolution of key components? • What second-order effects will this trigger—internally and externally?
Related Strategies
Closely related
Exploiting buyer/supplier power (Market → Exploitative) • Channel conflict is often about shifting buyer/supplier dynamics in your favour. • Direct channels weaken supplier (partner) leverage and give you pricing control.
Co-opting (Ecosystem → Competitive disruption) • Use channel conflict to undermine a competitor’s ecosystem advantage (e.g. Google’s Pixel phones co-opting Android OEMs).
Pricing policy (Market → Economic leverage) • Direct vs. partner pricing creates controlled tension—forcing price evolution or standardisation.
Creating constraints (Deaccelerator → Market manipulation) • Direct channels can be used to intentionally constrain supply (e.g. limited SKU availability to partners), triggering reshuffling.
Reinforcing inertia (Competitor → Strategic trap) • By shifting to DTC or a new channel, you can force competitors to defend legacy channels—anchoring them in the past.
Enablers or Accelerants
Open approaches (Accelerator → Market shaping) • Open APIs or platforms can be a soft disintermediation method, turning integrators into replaceable modules.
Creating centres of gravity (Attacking → Ecosystem pull) • Direct channels often become talent and data gravity wells, attracting ecosystem around your orbit.
Fool’s mate (Attacking → Industrialisation trigger) • Forcing a move to direct via a constraint (e.g. logistics, compliance) can accelerate the commoditisation of higher-order systems.
Sensing engines (ILC) (Ecosystem → Feedback loops) • Direct channels give access to real-time consumption data, fuelling ILC and outmanoeuvring partners stuck behind data silos.