ELICIA: So our next block that we'll look at is channels.
It's how the customer receives the product or service.
How do they actually get it into their hands?
And you can think of this in two parts.
You can think of it with sales and distribution.
To make it a little bit more concrete, let's take a look at Tesla.
So if we look at their sales, what you had
previously with manufacturers like Ford, Chrysler, they had franchise models.
So they had other people owning these lots,
and they would sell these cars on behalf of the manufacturer.
What Tesla does is it owns the whole channel.
It owns from the very start where it's manufacturing
your car all the way through to these showrooms, which
is actually distribution.
So they tie through these sales into their distribution with showrooms.
And what I mean by this is they don't have those sale lots.
They have these kiosks--
informational kiosks-- that looks super slick and futuristic
with computer monitors and models of the car, models of the engine.
And you can go and look at these.
You can't order them.
You can't actually walk off these lots or showrooms with a car.
You just get to know the car.
And what they do is they have sales people, but they see them as educators.
And they actually position them inside of these showrooms or showcases,
and you order through Tesla.
And then they make it once you've placed your order, and you get it delivered.
So they changed distribution.
They changed the face of the channel.
And that is one way that they are changing the face of their whole BMC.