When companies first plunged into e-commerce, they thought success meant cutting out the middleman. This approach did not work, partly because e-business misunderstood the role of intermediaries. Intermediaries are not expensive, a necessary evil. They solve problems for customers and in so doing, allow sales and added value for producers. Philip Anderson, INSEAD and Erin Anderson show how intelligent agents to help companies realize the promise of the web. You explain mediator “nine ways … Read more»

When companies first plunged into e-commerce, they thought success meant cutting out the middleman. This approach did not work, partly because e-business misunderstood the role of intermediaries. Intermediaries are not expensive, a necessary evil. They solve problems for customers and in so doing, allow sales and added value for producers. Philip Anderson, INSEAD and Erin Anderson show how intelligent agents to help companies realize the promise of the web. They state agents’ nine ways of value creation, suggesting that three will change, three are to survive in a new form, and three (reduction of uncertainty about the quality, customer anonymity preservation and tailoring supply to the needs of customers ) available growth opportunities. Intermediaries can co-opt the Internet by offering services that would make too difficult for the individual manufacturer. However, the authors warn, intermediaries must be open to new ways of doing business with suppliers and vice versa. The Web converts but does not eliminate the advantages of the middleman central viewpoint position. But what was once considered just a distribution channel from supplier to customer through intermediaries will now be described more accurately as a service hub have. The player who takes the customer’s order – perhaps a website – is in the center and interacts with many partners. The authors provide appropriate and fair incentives (eg quasi-independent Ethan Allen furniture stores that customers automatically before buying directly from the manufacturer’s website to see a tip of 10%). And they describe service hub management, the trust to produce enough to permit producers to get closer to the customer -. Indirectly
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Philip Anderson,
Paul Anderson,
Erin Anderson
Source: MIT Sloan Management Review
12 pages.
Release Date: 1 July 2002. Prod #: SMR086-PDF-ENG
New E-Commerce Solution Intermediaries HBR case

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