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

Lumen Books, a publisher, previously sold only through bookshops. It now sells e-books and printed titles directly to readers through its own website, so bookshops and wholesalers are bypassed for these sales. Which concept does this describe, and what is the key strategic implication?

This is disintermediation: the publisher cuts out bookshops and wholesalers by selling direct online. The implication is that it can keep more margin and own customer data, but it risks channel conflict and damaged relationships with the bookshops that remain an important route to market.

  1. AReintermediation; Lumen has introduced new intermediaries such as comparison sites, which raises its channel costs
  2. BDisintermediation; Lumen removes intermediaries, capturing more margin but risking conflict with its existing bookshop channelCorrect
  3. CCountermediation; Lumen has set up a separate brand to compete with an online intermediary
  4. DInfomediation; Lumen's main income now comes from selling customer data to third parties

Explanation

Selling directly and bypassing bookshops and wholesalers is disintermediation. The gain is retained margin and customer data; the risk is channel conflict with the bookshops that still sell its titles. Reintermediation would involve new intermediaries emerging, which is not described.

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