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

Harbor Leaf, a regional tea merchant, sells only through shops. It now launches a website where customers order loose-leaf tea directly, with the same range, delivered by courier. Management says the aim is to reach customers outside its catchment area at low cost. Which e-business benefit is most directly being sought?

The benefit sought is wider market reach. A website lets Harbor Leaf sell to customers beyond its shops' catchment area at low cost, because geography no longer limits the channel. The other options describe supplier disintermediation, internal process automation or reduced entry threats, none of which match the stated aim.

  1. AWider market reach through removal of geographic limits on sellingCorrect
  2. BDisintermediation of its existing wholesale suppliers in the upstream supply chain
  3. CAutomation of internal payroll and HR processes
  4. DReduction of the threat of new entrants to the tea market

Explanation

The stated aim is to sell to customers beyond the physical catchment area, which is the market reach benefit of a web channel. Disintermediation concerns cutting out intermediaries, and nothing here removes suppliers. Payroll automation is an internal efficiency matter, and online selling generally lowers entry barriers, so it would increase rather than reduce the threat of new entrants.

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