Reintermediation Strategies in Business-to-Business Electronic Commerce

Abstract

The literature on electronic commerce and electronic marketplaces has long recognized the importance of intermediaries and the functions they serve. The Internet is most often discussed in connection with digital intermediaries as the displacement of traditional intermediaries. This article proposes a new conceptual framework for understanding how competition in business-ta-business (B2B) electronic commerce in the presence of information technology (IT) innovations changes firm-level strategy choices and the structure of the marketplace. It also identifies and discusses the economic forces that lead to these changes, and in this context describes a recurring pattern of intermediation, disintermediation, and reintermediation through an “IDR framework.” The article explains the impetus for technological reintermediation, where a disenfranchised traditionol player is able to compete again by leveraging technological innovations with cospecialized assets. This perspective is built with the support of relevant literature from several reference disciplines and with evidence from a field study of intermediation on the Internet in the corporate travel industry. The analysis reveals that traditional travel firms hove access to a range of strategies thot enable them to avoid disintermediation and retain highly profitable central roles in the marketplace in the long run.