Disintermediation Strategy
A Disintermediation Strategy is a business strategy that centers on the removal financial intermediaries in a distribution channel.
- Example(s):
- Tourism Disintermediation of tourism distribution channel.
- Direct-to-consumer (DTC) brands selling products online without retailers
- Online banking services reducing the need for physical bank branches
- Self-publishing platforms allowing authors to bypass traditional publishers
- ...
- Counter-Exmaple(s):
- See: Supply Chain, Distribution Channels, Distribution (Marketing), Wholesaler, Broker, Technological Innovation.
References
2024
- https://www.investopedia.com/terms/d/disintermediation.asp
- QUOTE: The term disintermediation refers to the process of cutting out the financial intermediary in a transaction. It may allow a consumer to buy directly from a wholesaler rather than through an intermediary such as a retailer, or enable a business to order directly from a manufacturer rather than from a distributor. In the financial industry, it is seen when an investor is able to buy stock directly rather than through a broker or a financial institution. The purpose of disintermediation is usually to cut costs, speed up delivery, or both.
- Key Takeaways
- Disintermediation is the process of cutting out one or more middlemen from a transaction, supply chain, or decision-making process.
- The usual reasons for disintermediation are to reduce costs or increase delivery speed.
- In financial terms, disintermediation involves the removal of banks, brokers, or other third parties, allowing individuals to transact or invest directly.
- Cryptocurrencies are disintermediating the financial sector and government from monetary transactions.
- The process doesn't always work because it requires additional staffing and other resources to replace the services supplied by an intermediary.
2022
- (Wikipedia, 2022) ⇒ https://en.wikipedia.org/wiki/disintermediation Retrieved:2022-11-14.
- Disintermediation is the removal of intermediaries in economics from a supply chain, or "cutting out the middlemen" in connection with a transaction or a series of transactions. [1] Instead of going through traditional distribution channels, which had some type of intermediary (such as a distributor, wholesaler, broker, or agent), companies may now deal with customers directly, for example via the Internet.
Disintermediation may decrease the total cost of servicing customers and may allow the manufacturer to increase profit margins and/or reduce prices. Disintermediation initiated by consumers is often the result of high market transparency, in that buyers are aware of supply prices direct from the manufacturer. Buyers may choose to bypass the middlemen (wholesalers and retailers) to buy directly from the manufacturer, and pay less. Buyers can alternatively elect to purchase from wholesalers. Often, a business-to-consumer electronic commerce (B2C) company functions as the bridge between buyer and manufacturer.
However manufacturers will still incur distribution costs, such as the physical transport of goods, packaging in small units, advertising, and customer helplines, some or all of which would previously have been borne by the intermediary. To illustrate, a typical B2C supply chain is composed of four or five entities. These are the supplier, manufacturer, wholesaler, retailer and buyer.
- Disintermediation is the removal of intermediaries in economics from a supply chain, or "cutting out the middlemen" in connection with a transaction or a series of transactions. [1] Instead of going through traditional distribution channels, which had some type of intermediary (such as a distributor, wholesaler, broker, or agent), companies may now deal with customers directly, for example via the Internet.
- ↑ Wake Forest. Infinite Financial Intermediation. page 50. Law Review 643 (2015)
2010
- (Kaewkitipong, 2010) ⇒ Laddawan Kaewkitipong. (2010). “Disintermediation in the Tourism Industry: Theory Vs. Practice.” In: SIGeBIZ track of the Americas Conference on Information Systems.