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CHAPTER EIGHT. Competition and the Electronic World: Does e-Commerce Require the Recognition of Channel as a Type of Diversification?

Esmeralda Garbi, Peggy Golden and Brenda Richey

Subject Business and Management » Entrepreneurship
MIS (Management Information Systems) » E-commerce

DOI: 10.1111/b.9780631235118.2002.00010.x


Today, when attempting to apply core strategy concepts such as diversification to the creation of Internet‐based companies or divisions, we are faced with a problem. The core competency for firms involved in electronic commerce is often the ability to share information, rather than a functional expertise such as manufacturing or new product technology. As a consequence, the ability to classify these businesses into different areas or industries, to define when more than one area is being reached, and to establish how they relate with each other becomes more difficult ( Sampler, 1998 ). In this chapter, we examine the extent to which existing diversification concepts can adequately describe e‐commerce and the world of the Internet, and argue that as a result of this new technology it may be necessary to reconsider diversification and include channel as a new type of diversification. Here are some illustrations. Nordstrom is a full‐service retailer that is geographically dispersed and sells a complex product line. Because of its historical growth, it developed its supply chain through conventional channels. Recently it has taken on a webpresence to reach customers ( Business Week , 1999 ). Although its basic products and markets remain the same, the “click‐and‐mortar” presence offers a new distribution channel. It permits Nordstrom to choose whether it is more efficient to ship to ... log in or subscribe to read full text

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