Is there any distribution system more poorly conceived than the one used by most U.S. car manufacturers and dealers? In the prevailing system, car prices are initially jacked up by locked-in labor concessions. Manufacturers pit dealers against other nearby dealers. Dealers are pressured to accept more vehicles than they can sell and—unable to make money from new cars—turn to service and trade-ins to eke out margins. And at the bottom of the chain are customers trapped in high-pressure negotiations for a car that isn't the exact model they want.
Sean Silverthorne interviews Harvard Business School professor V. Kasturi Rangan regarding his book on the strategic way to get goods to market.