“Electronic commerce is an emerging concept that describes the process of buying and selling
or exchanging of products, services, and information via computer networks including
Internet.”(Turban, Lee, King and Chung, 2000). Electronic commerce, or short e-commerce,
promised many benefits and golden opportunities often described by terms like business-tobusiness
(B2B) or business-to-consumer (B2C). Those terms are now often used in
commercials and advertisements. After only a short while new terminology was invented to
describe the new opportunities of e-commerce. The old terms lost their impressiveness much
too fast. Venture capital was readily available to finance business models described by peer-to
peer (P2P) and consumer-to-business (C2B). The online world but also their financial partners
found themselves in the middle of hype.
One of the great effects predicted was an effect named disintermediation. This term
describes according to Chaffey, Mayer, Johnston and Ellis-Chadwick (2000) the removal of
intermediaries. The former linkages between customers and companies like brokers or
distributors are replaced by the electronic channel. The picture some dot.com entrepreneurs
painted was one of a world without travel agencies, toyshops, electronic retailers and other
intermediaries.
Disintermediation caused some mid-sized channe l relationship earthquakes after a
rebellion from the intermediaries. Resellers of the Apple's I-Mac gave Steve Jobs at a
presentation in Paris, Europe a hard stand. Mr. Case was there to inform retailers about
Appel's newest PC model. His announcement, that the I-Mac will be exclusively available via
the Internet for an introduction period of four weeks, created whistle blowing and tumults
among the resellers. The upset intermediaries feared that this four weeks were just a try out
for their uncertain future (Stein, 2000). It comes at no surprise that intermediaries rebelled as
companies tried to shortcut them with the help of electronic commerce. Another example of
disintermediation is Steven King, who tried to sell a new book via the Internet. He put the first
chapters online for free and would only write further chapters if most people would pay him.
The project called 'The Plant" ended not successfully. Stephen King discontinued his trial
because the percentage of paying customers dropped with every chapter (Der Spiegel, 2000). [...]
Table of Contents
- Introduction
- Disintermediation
- Reintermediation
- Integrating the Internet - towards multi-channel distribution
- Implications and suggestions for further research
- References
Objectives and Key Themes
This paper investigates the impact of electronic commerce on financial intermediaries, specifically addressing whether e-commerce leads to disintermediation, reintermediation, or both. It examines the perspectives of various authors on these concepts and analyzes the role of intermediaries in light of the increased efficiency offered by online distribution channels.
- The effects of e-commerce on existing distribution channels.
- The role of intermediaries in the context of online sales.
- The impact of cost efficiencies on channel relationships.
- Disintermediation as a result of direct manufacturer-consumer interactions.
- Reintermediation and the emergence of new online intermediaries.
Chapter Summaries
Introduction: This introductory chapter defines electronic commerce and its potential impact on business models, highlighting the emergence of terms like B2B and B2C, and the subsequent rise of P2P and C2B models. It introduces the central research question: Will e-commerce lead to disintermediation, reintermediation, or both? The chapter sets the stage for exploring these concepts throughout the paper.
Disintermediation: This chapter explores the concept of disintermediation, the removal of intermediaries from the supply chain. It examines the concerns of brick-and-mortar retailers as manufacturers offer direct customer service through their websites, including online problem-solving and FAQs. The chapter discusses how cost efficiencies and superior service offered directly by manufacturers via the internet can render traditional intermediaries redundant, particularly for complex, high-tech products. The chapter uses examples of Apple's iMac launch and Stephen King's online book project to illustrate the challenges faced by intermediaries in the face of e-commerce. The chapter explains that the success of disintermediation depends on whether intermediaries provide a valuable service that customers are willing to pay for.
Reintermediation: This section delves into the concept of reintermediation, where new intermediaries emerge between customers and suppliers, offering additional services such as faster delivery, search functions, and product evaluations. Examples of these new intermediaries, such as E-toys and Amazon, are analyzed, highlighting the success of some while illustrating the failures of others in the face of intense competition and economic fluctuations. The chapter assesses how these new intermediaries contribute value to the supply chain. It contrasts the perspectives of those who believe that intermediaries will disappear completely with those who predict the rise of new electronic intermediaries.
Integrating the Internet - towards multi-channel distribution: This chapter explores the potential of the internet as an additional distribution channel and discusses the factors that need to be considered when adding this new channel. The discussion integrates the concepts of disintermediation and reintermediation and likely explores the need for companies to strategize their integration of an electronic channel in a multi-channel approach. The chapter emphasizes that even with the internet, the importance of established retailers is not to be ignored.
Keywords
Electronic commerce, e-commerce, disintermediation, reintermediation, intermediaries, distribution channels, online sales, cost efficiencies, channel relationships, B2B, B2C, P2P, C2B, multi-channel distribution, internet marketing, supply chain management.
Frequently Asked Questions: A Comprehensive Language Preview on E-commerce and Intermediaries
What is the main topic of this text?
This text is a comprehensive preview of a paper investigating the impact of electronic commerce (e-commerce) on financial intermediaries. It focuses on the concepts of disintermediation (the removal of intermediaries) and reintermediation (the emergence of new intermediaries) in the context of online sales and distribution channels.
What are the key themes explored in the paper?
The key themes include the effects of e-commerce on existing distribution channels, the role of intermediaries in online sales, the impact of cost efficiencies on channel relationships, disintermediation through direct manufacturer-consumer interaction, and reintermediation and the emergence of new online intermediaries. The paper also explores the integration of the internet into multi-channel distribution strategies.
What are the objectives of the research?
The research aims to determine whether e-commerce leads to disintermediation, reintermediation, or both. It examines various perspectives on these concepts and analyzes the role of intermediaries considering the increased efficiency offered by online distribution channels.
What is disintermediation, and how is it illustrated in the text?
Disintermediation is the removal of intermediaries from the supply chain. The text illustrates this concept with examples like Apple's direct-to-consumer iMac launch and Stephen King's online book project, showing how manufacturers can bypass traditional retailers. The success of disintermediation depends on whether intermediaries provide valuable services customers are willing to pay for.
What is reintermediation, and what examples are provided?
Reintermediation refers to the emergence of new intermediaries in the online marketplace. The text uses examples like E-toys and Amazon to illustrate how new intermediaries offer services such as faster delivery, search functions, and product evaluations. The paper explores both successful and unsuccessful cases, highlighting the challenges of intense competition and economic fluctuations.
How does the paper address multi-channel distribution?
The paper explores the internet as an additional distribution channel, integrating the concepts of disintermediation and reintermediation. It emphasizes the need for companies to strategically integrate electronic channels into a multi-channel approach, recognizing the continued importance of established retailers even in the age of e-commerce.
What are the key takeaways from the chapter summaries?
The introduction establishes the central research question regarding disintermediation and reintermediation. The disintermediation chapter analyzes the challenges to traditional intermediaries from direct manufacturer-consumer interaction. The reintermediation chapter examines the emergence and success/failure of new online intermediaries. Finally, the multi-channel distribution chapter emphasizes the strategic integration of online channels alongside traditional methods.
What are the keywords associated with this research?
Key terms include electronic commerce, e-commerce, disintermediation, reintermediation, intermediaries, distribution channels, online sales, cost efficiencies, channel relationships, B2B, B2C, P2P, C2B, multi-channel distribution, internet marketing, and supply chain management.
What is the overall conclusion (implied) of the paper preview?
The preview suggests that e-commerce leads to a complex interplay of disintermediation and reintermediation, with the ultimate impact depending on factors like the value provided by intermediaries, competitive pressures, and the strategic integration of online channels within a broader multi-channel distribution strategy.
- Quote paper
- Tomislaw Dalic (Author), 2001, Does electronic commerce as a new distribution channel cause disintermediation or reintermediation or both?, Munich, GRIN Verlag, https://www.grin.com/document/20728
