Distribution network dynamics and the consequences for intermediaries

• The demise of intermediaries has been anticipated on several occasions owing to changes in the distribution context.
• Despite these predictions many intermediaries have managed to maintain, defend and even improve their positions.
• By adapting to changing business conditions they have been able to generate value for their business partners.
• The study demonstrates the relevance of industrial network theory as a framework for examining distribution dynamics.
• The most strategic issue for an intermediary is to adapt to changes in the activity and resource layers of the network.

Distribution networks are in constant flux due to the dynamics of their contexts. In these processes, the functioning and significance of intermediaries and middlemen become modified. This paper examines what consequences the dynamics of distribution may imply for intermediaries and the role these firms play in this evolution. The paper is based on a literature review of the long-term evolution of distribution networks and intermediaries. The first contribution of the study is a historical narrative of this evolution, where three main phases are identified in the period from the 1600s. In these phases, the power and the functions of intermediaries have varied substantially. Despite the fact that their demise has been anticipated on several occasions, intermediaries have survived because they have been able to adapt to changing conditions. The second contribution of the study is the industrial network analysis of the impact of this evolution on three central dimensions of distribution: division of labor among actors, efficiency of activities, and control of resources. Finally, the study provides contributions to practice through recommendations concerning potential value generating opportunities for intermediaries. These suggestions are derived from the combined findings of the historical review and the network analysis.