Business,Strategy,Disintermedi business, insurance A Business Strategy Disintermediation
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Indeed, entrepreneurs need enoughmoney to keep their business running. Even a typical venture uses variousstrategies to attain growth, profit, and disintermediation to pursue success. The word disintermediation soundsa bit complicated but to understand its meaning, individuals need to segregatethe word in little parts. Dis- intermediation means to get rid ofintermediaries. It implies that entrepreneursneed to get divest of people, who stand in between the entrepreneur and theircustomers. In short, entrepreneurs can directly work with consumers, therebysaving a huge amount of money. In this process, people can eliminate somefactors such as unnecessary distributors or retailers, who serve no purpose incontributing to the business. Concept of Disintermediation: If an entrepreneur eliminates thedisintermediation factor, then it considerably lowers the cost, while stillenabling the entrepreneurs to obtain revenue from the consumers. Hence, use itas a business strategy. It directly accesses the customers to differentproducts of company at cheaper rates, because it eliminates other costs such asfees and commissions of retailers and distributors. The chains of supply become streamlined,and the company directly sells the products to customers through internet orthrough company owned stores. It creates a higher transparency in market,because consumers are aware that they get goods directly form themanufacturers. Disintermediation existsin offline business world too. Many apparel brands and big retailers havegreatly benefited by disintermediation. It boosts the product sale and establishesa strong rapport between the company and customer, by virtue of which consumerscontinue to buy products of that particular company only. For instance, manymajor computer companies provide the user with not only computer, but also withvarious computer software, and as for developer the company provides them withsource provisions, thereby eliminating the marketing cost of software. The ventures, which usedisintermediation, are mostly businesses dealing with computer hardware, musicalappliances and accessories, book supplies, software paraphernalia and travelagencies. The Other Side Of Disintermediation: Although, there are huge benefitsof disintermediation that is used as a way to earn more revenue, sometimes itmay bring in loss to small businesses. In addition to this, the concept becomesbeneficial only for reputed ventures in market, but what about other smallbusinesses. These small businesses thrive on executives, salespersons,retailers and distributors for sale to generate profits. If entrepreneurs usedisintermediation in their business ventures, then intermediaries who get incomefrom them may have to go jobless. Thebest thing is to implement this strategy only in few areas of a venture such ascomputers and books. People who run online venturescan safely bet on a disintermediation procedure. Hence, entrepreneurs need toconsider the category in which their businesses fall and then opt for disintermediation.
Business,Strategy,Disintermedi