INNOVATION IN DISTRIBUTION CHANNEL(S) & COST EFFICIENCY ON SMALL & MEDIUM ENTERPRISE SCALES’ PERFORMANCE: LITERATURE REVIEW

Rialp et al, examined the integration of structural channels over firms in Span who engaged in exporting and invented obvious evidence that establishing linkage to importers via distribution decision can enhance export process. While, Mcnaughton shared his findings- the aim of multiple distribution channel establishment is to serve foreign market. Establishing independent channels also impact better for channel members. Here, as Kumar suggestion, decentralization is recommended.
However, Rose et al, found clearly that conflict among channel members might cause problems in turn reduce performance. Interesting findings by Frazier et al, on industrialized manufacturers demonstrated sales and profit also take a part in the harmonization of channel relationship sustainability. Confirmed further information exchange among members play crucial part in enhancing their relationship performance. While John add trust as an essential element to maintain the relationship. Jennifer & Jiuh, further asserted channel relationship commitment & trust become the key mediator determines the channel performance.
Nevertheless, in respect to the distribution channel its self, generally, the studies emphasized on the relationship and governance arrangement of channel members. And their all lead to channel members’ performance. While studies of distribution channels’ activities, particularly in the context of SMEs export oriented agricultural based industries, on manufacturing, barely found.
As innovation believed to be the main driver for firms to pursue better competitiveness & performance, empirical evidences of innovations including in distribution channel-firm performance associations are miscellaneous. Some studies have found innovation is closely associated with firm performance. Others suggested the effect of process innovation gave different results to firm performance. Too much & little innovation also did not explain performance (Eitan Naveh et al, 2006). Mark, argued innovation did not affect performance. Some others pointed process improvement did not influence sales growth of the small firms. Fabricio et al, 2004; Gary et al, 2008; Wang et al, 2009; Nada et al, 2008; Morgado et al, 2008; Gunnar et al,2009; Satya et al,2009, Sulivan et al, 2009, & others suggested innovation using technology and different method in distribution channel activities are significant with performance.
The miscellaneous result of the previous innovation studies probably excluded the mediating effect of distribution channel efficiency between the innovations including in distribution and firm performance. To clarify the miscellaneous issues, this study examine the mediating effect of distribution channel efficiency on the association between the innovations in terms of activities of distribution channels and the firm performance of SMEs export-oriented as such study barely found. However, the impacts of distribution channel activities’ innovations on firm performance & the implications will be presented as well.