In one or two paragraphs, define and distinguish between ...

[mwit1967]

In one or two paragraphs, define and distinguish between disintermediation and reintermediation.

Question 2

In about 100 words, define channel conflict and describe how a consumer electronics company that sells its products both in retail stores and online might deal with this issue.

[perkiness]

Answer to Question 1

In the fee-for-transaction revenue model, businesses offer services for which they charge a fee that is based on the number or size of transactions they process. Some of these services, including stock trading and online banking, lend themselves well to operating on the Web.

To the extent that companies can offer Web site visitors the information they need about the transaction, companies can offer much of the personal service formerly provided by human agents. If customers are willing to enter transaction information into Web site forms, these sites can provide options and execute transactions much less expensively than traditional transaction service providers. The removal of these traditional service providers is an example of disintermediation, which occurs when an intermediary, such as a human agent, is cut from a value chain. The introduction of a new intermediary, such as a fee-for-transaction Web site, into a value chain is called reintermediation.

Answer to Question 2

Channel conflict can occur whenever sales activities on a companys Web site interfere with its existing sales outlets. The problem is also called cannibalization because the Web sites sales consume sales that would be made in the companys other sales channels.

One solution for a consumer electronics store would be to avoid direct price competition among the channels.

[mwit1967]

Excellent

[at]

Thanks for the timely response, appreciate it