why is the originate-to-distribute business model subject to the principal-agent problem?

business model
company, model, woman @ Pixabay

For the longest time, marketers were told that creating and distributing your products was the best way to do it. This was before the advent of 3D printing. For years, manufacturers had to convince the market that they were the best at what they did. The only way they could do that was if they created the highest quality products at the lowest price. And, most manufacturers did this successfully, but that’s the problem.

For the longest time, marketers were told that creating and distributing your products was the best way to do it. This was before the advent of 3D printing. For years, manufacturers had to convince the market that they were the best at what they did. The only way they could do that was if they created the highest quality products at the lowest price. And, most manufacturers did this successfully, but that’s the problem.The principal-agent problem occurs when two parties are in the same business and one of them is trying to sell a product in a different way. The agent may be the manufacturer or a distributor. In this case, because their product is different, the agent can’t just stop the other party. Because the other party is using different marketing techniques, the agent will have to make the same decision that they would if they were the same party.

For the longest time, marketers were told that creating and distributing your products was the best way to do it. This was before the advent of 3D printing. For years, manufacturers had to convince the market that they were the best at what they did. The only way they could do that was if they created the highest quality products at the lowest price. And, most manufacturers did this successfully, but that’s the problem.The principal-agent problem occurs when two parties are in the same business and one of them is trying to sell a product in a different way. The agent may be the manufacturer or a distributor. In this case, because their product is different, the agent can’t just stop the other party. Because the other party is using different marketing techniques, the agent will have to make the same decision that they would if they were the same party.The principal-agent problem is a difficult problem to solve, and a common occurrence in business. Its a problem that I’ll talk about in the next chapter. It’s the problem that creates the principal-agent problem. We’ll see why it is a problem in Chapter 7.

For the longest time, marketers were told that creating and distributing your products was the best way to do it. This was before the advent of 3D printing. For years, manufacturers had to convince the market that they were the best at what they did. The only way they could do that was if they created the highest quality products at the lowest price. And, most manufacturers did this successfully, but that’s the problem.The principal-agent problem occurs when two parties are in the same business and one of them is trying to sell a product in a different way. The agent may be the manufacturer or a distributor. In this case, because their product is different, the agent can’t just stop the other party. Because the other party is using different marketing techniques, the agent will have to make the same decision that they would if they were the same party.The principal-agent problem is a difficult problem to solve, and a common occurrence in business. Its a problem that I’ll talk about in the next chapter. It’s the problem that creates the principal-agent problem. We’ll see why it is a problem in Chapter 7.If you have a product that is subject to the principal-agent problem, it is likely that you’ll have to make decisions that you probably wouldn’t have made otherwise. It’s like you would think that you had to pay someone to do something that you could have done yourself. When you have to pay someone money, you have to think about what to give them.

Published
Categorized as blog

Leave a comment

Your email address will not be published. Required fields are marked *