Overestimating impact of online channels
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In Marketing Strategy and Organization: Building Sustainable Business the following arguments for overestimating the impact of online Distribution Channels are mentioned:
- The transaction costs argument
- optimistic view: online channels enable a company to acquire products and services more efficiently
- realistic view: interaction between buyer and seller involves a vague trial and error process.
- The market expansion argument
- optimistic view: e-commerce enables a better matching of suppliers and faster more personalized access to customers enabling less volatile demand.
- realistic view: successful contenders develop unique differentiation and build up switching cost.
- The Disintermediation argument
- optimistic view: online channels enable the supplier to bypass intermediaries
- realistic view: setting up a distribution channel and attractive market place is difficult. You can eliminate the middle man but not the middle man's function
- The market diversification argument
- optimistic view: internet provides bricks and mortar companies with opportunities to build business elsewhere.
- realistic view: building business remains harsh.