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The internet as an opportunity to rethink the role of the intermediary

The internet as an opportunity to rethink the role of the intermediary The advent of the Internet and the attending increase in the value chain inter‐linking has been understood as a harbinger of the death of the intermediary. This paper uses Williamson's (1975) forms of specificity (human‐, site and physical asset‐specificity) and the components of the traditional value proposition (content, context and infrastructure) to suggest that the function of the intermediary will be changed, but not eliminated. In this discussion, I draw on the cases of Volvo and Electrolux. Both companies have recently launched web sites in order to regain control of the interface with customers, or context, which thanks to the Internet, can now be virtualised. This allows their intermediaries to focus on their specific advantage, namely handling the activities related to the delivery and logistic infrastructure. The main implication for firms is to re‐examine the various steps along their value chains with a view to bringing in‐house, virtually, those components where the intermediaries had specific advantages‐but which moved to the producer's side as a result of the Internet. Hence intermediaries acquire a more specific and focused role. To the extent that this role lies at the heart of their core competence, involving the provision of convenient locational and infrastructural delivery systems and services they enjoy competitive advantage vis‐a‐vis the producer. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Consumption Markets and Culture Taylor & Francis

The internet as an opportunity to rethink the role of the intermediary

Yakhlef, Ali
Consumption Markets and Culture , Volume 4 (1): 17 – Jan 1, 2000
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Publisher
Taylor & Francis
Copyright
Copyright Taylor & Francis Group, LLC
ISSN
1477-223X
eISSN
1025-3866
DOI
10.1080/10253866.2000.9670348
Publisher site
See Article on Publisher Site

Abstract

The advent of the Internet and the attending increase in the value chain inter‐linking has been understood as a harbinger of the death of the intermediary. This paper uses Williamson's (1975) forms of specificity (human‐, site and physical asset‐specificity) and the components of the traditional value proposition (content, context and infrastructure) to suggest that the function of the intermediary will be changed, but not eliminated. In this discussion, I draw on the cases of Volvo and Electrolux. Both companies have recently launched web sites in order to regain control of the interface with customers, or context, which thanks to the Internet, can now be virtualised. This allows their intermediaries to focus on their specific advantage, namely handling the activities related to the delivery and logistic infrastructure. The main implication for firms is to re‐examine the various steps along their value chains with a view to bringing in‐house, virtually, those components where the intermediaries had specific advantages‐but which moved to the producer's side as a result of the Internet. Hence intermediaries acquire a more specific and focused role. To the extent that this role lies at the heart of their core competence, involving the provision of convenient locational and infrastructural delivery systems and services they enjoy competitive advantage vis‐a‐vis the producer.

Journal

Consumption Markets and Culture – Taylor & Francis

Published: Jan 1, 2000

Keywords: Electronic channel links; Internet; Intermediary; Brand identity; Brand extension; Value proposition; Core competence; physical/virtual value chain

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