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

Halvorsen Outdoor, a regional camping equipment retailer, launches an online store that lets customers order directly and have goods shipped from its central warehouse. Management says the main aim is to remove the regional wholesalers that previously sat between it and its customers. Which e-business concept does this best describe?

The concept is disintermediation. Halvorsen is using the internet to sell directly to customers and cut out the wholesalers who formerly sat between it and them. Reintermediation would involve new online intermediaries emerging, which is not what the case describes.

  1. ADisintermediationCorrect
  2. BReintermediation
  3. CMass customisation
  4. DNetwork externality

Explanation

Removing intermediaries such as wholesalers from the supply chain by dealing directly with customers online is disintermediation. Reintermediation is the opposite: new online intermediaries appear, such as price comparison sites. Mass customisation and network externality do not concern removing channel members.

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