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ACCA Strategic Professional · Strategic Business Leader · E-business: value chain

Brightwell Publishing sells textbooks through bookshops and wholesalers. It now sells directly to readers through its own website, bypassing wholesalers and retailers. Using the concept of the value system, what does this change represent?

This is disintermediation. Brightwell removes wholesalers and retailers from the value system by selling directly to readers online, capturing the channel margin itself. Reintermediation would instead mean new intermediaries emerging, and nothing in the scenario describes that or vertical integration into suppliers.

  1. ADisintermediation, removing intermediaries from the value systemCorrect
  2. BReintermediation, adding a new intermediary to the value system
  3. CBackward vertical integration into supplier activities
  4. DA shift from primary to support activities within the firm's own chain

Explanation

The value system includes the value chains of suppliers, the firm, channels and buyers. Selling directly and cutting out wholesalers and retailers is disintermediation. Reintermediation would involve new intermediaries, such as online marketplaces, appearing, which is not described.

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