Disintermediation

1
Disintermediation

• Peter Wittenberg
• Thomas Dick
• T81-507C
• 10/17/2002

2
Impact of Disintermediation

• Disintermediation Getting rid of the middleman,
  generally through more direct e-Business links
  from manufacturer to buyer
• What disintermediation will e-Business really
  cause?
• What business changes are necessary to keep
  customers happy?

3
Background

• The term disintermediation arose from the fears
  that e-Business would eliminate retail stores and
  distributors
• Does the Internet make the marketplace more
  efficient?
• The Supply Chain
• Middlemen add value to transactions
• How will the Internet affect their role?

4
Business to Consumer Industries Case Studies

• Buying a car
• Do you want to haggle with a dealer?
• Home Appliance
• How do you buy a dishwasher?
• Content Software, Music, Books, Videos
• Are you ready to download it?
• Grocery Industry
• Do you want your groceries delivered?

5
Disintermediation in the Auto Industry

• Consumers
• Desires
• Manufacturer-direct Purchasing
• Advantages
• Disadvantages
• Auto Dealers
• Advantages
• Disadvantages

6
Auto e-Business Today

• Online Buying Services
• Dealers
• Manufacturer-direct
• Intermediaries are still around

7
Disintermediation in Home Appliances

• Consumers
• Desires
• Manufacturer-direct Purchasing
• Advantages
• Disadvantages
• Retail Stores
• Advantages
• Disadvantages

8
Disintermediation in the Content Industry

• Consumers
• Desires
• Downloads
• Advantages
• Disadvantages
• Retailers
• Advantages
• Disadvantages

9
Disintermediation in the Grocery Industry

• Consumers
• Desires
• e-Grocers
• Advantages
• Disadvantages
• Supermarkets
• Advantages
• Disadvantages

10
Business to Business Case Studies

• Boeing Suppliers
• Exostar e-Business System
• Purchasing Ball Screws
• Vertical marketplaces
• Solid Waste
• Electric Power Generation

11
Business Change in the Era of Disintermediation

• Business needs to change
• Integrate databases with customers and suppliers
• Reduced Inventory
• Better planning for ordering
• Lower transaction costs
• Inventory management

12
Conclusion The Value Chain

• What value does an intermediary provide?
• Disintermediation happens if an intermediary does
  not provide value in the supply chain
• Disintermediation varies among industries
• Legal and social issues also affect
  disintermediation
• More information -http//cec.wustl.edu/pw5/cours
  es/t81-507c/presentation/presentation.htm