1. MD253 – Electronic Commerce Sept. 13, 2005 Distribution Channels: Disintermediation

2. Topics Covered Collapsing Channels –Failures & successes –the role of value gaps Firms ‘changing the channel’ –Expedia & the travel industry –BlueNile & the jewelry industry –NetFlix & the DVD rental business

3. Source: Benjamin & Wigand (SMR) Disintermediation

4. Value Gaps customersretailerdistributorsource firm Value Added = A, Expense = X Value Added = B, Expense = Y Expense Savings = (X+Y) - Cost of New Effort Value Gap = (A+B) - Value Added by New Effort

11. "Mark has this microcosm of the jewelry market online. I know what is moving fast and what I should be discounting, but I still don't have to discount for my other retailers because they don't have this kind of view into the market" Anonymous Blue Nile Wholesaler