MD253/MK252 Electronic Commerce Jan. 25, 2006 Distribution Channels: Disintermediation.
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MD253/MK252 Electronic Commerce Jan. 25, 2006 Distribution Channels: Disintermediation
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Transcript of MD253/MK252 Electronic Commerce Jan. 25, 2006 Distribution Channels: Disintermediation.
MD253/MK252Electronic Commerce
Jan. 25, 2006
Distribution Channels: Disintermediation
Topics Covered
• Collapsing Channels– Failures & successes– the role of value gaps
• Firms ‘changing the channel’– Expedia & the travel industry– BlueNile & the jewelry industry– NetFlix & the movie industry
Source: Benjamin & Wigand (SMR)
Price
Unit Sales
Producer Wholesaler Retailer Consumer
Producer Wholesaler Retailer Consumer
Producer Wholesaler Retailer Consumer
Price/Shirt Savings
$52.72
$41.34
$20.45
0%
28%
62%
Disintermediation
Value Gaps
customersretailerdistributorsource firm
Value Added = A,Expense = X
Value Added = B,Expense = Y
Expense Savings = (X+Y) - Cost of New EffortValue Gap = (A+B) - Value Added by New Effort
The Long Tail
Source: Wired
Revenue sharing for DVDs
Source: Video Rental Developments & the Supply Chain: Netflix Inc., WUSTL.EDU casehttp://www.olin.wustl.edu/workingpapers/pdf/2004-03-225.pdf
