Disintermediation is when the intermediates are removed from the distribution channel; a few examples of intermediates are agents, wholesales and retailers. Therefore in that distribution channel there are no intermediates and the products are provided from the manufacturer straight to the consumers, therefore businesses will be required to deal with each customer directly. An example would be is a farm as a manufacturer this is because the goods will be produced there and the customers will be able to visit the farm and collect the products from there or have it delivered to their house.
ASOS also use disintermediation this is because they deliver the goods frorm their warehouse straight to the customers, there is no middle person in this transcation. Also as ASOS are a click business it means that the business only operates from online and there are no stores for the customers to visit. ASOS have a huge warehouse which is 32,500 square metres which is the same size as 5 football pitches. Thi is where all the stock will be held until they have been purchased and then sent to the customers.
Disintermediation can help ASOS in several ways. Firstly it provides the consumer with convenience this is because they will have easy, simple and direct access to the goods and services that are provided by the business. It could also mean that the businesses reputation and profitability will increase this is because they are able to widen their target audience and they can find ways of attracting new customers as well as retaining existing customers hence an increase in sales. It can help create a better reputation because they will be able to develop a good relationship with their customers and gain customer satisfaction and loyalty. It could also imply lower prices this is because the number of processes and transaction that take place in the distribution chain is reduced and the amount of money that has to be provided could be decreased.
ASOS?
Posted by: ebitnow.com | 12/14/2009 at 10:46 AM