The Information Superhighway And Electronic Commerce Effects of Electronic Mar

Cover The Information Superhighway And Electronic Commerce Effects of Electronic Mar
The Information Superhighway And Electronic Commerce Effects of Electronic Mar
Robert I Benjamin
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In reality, because the wholesaler's costs are eliminated, the retailer can eliminate some of his profit margin, further reducing his selling price, and the cost to the consumer.
Value Chain 3. Further opportunities exist when appropriate information technology can directly reach the consumer. The manufacturer can now use the Nil to leap over all intermediaries. The consumer's purchase price for the shirt will be $20. 45, and the net savings is now about 62%. The manufacturer will surely try to
... retain a significant part of these savings, unless market forces make it impossible to do so.
An alternate scenario exists where a market maker provides the consumer access to a number of shirt manufacturers. In this case the electronic market effect should drive costs down to those of the lowest cost producer thus reducing the manufacturer's ability to appropriate a share of the value system savings. A likely outcome is a potential shrinkage in profit margins for each of the manufacturers, as discussed previously.


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