Best In Brief
MIT Sloan Management Review: Middlemen for a modern age
Angela AndalAncion, Philip A. Cartwright and George S. Yip
University of Westminster
are companies and products such as books and airlines that can benefit
greatly from new information technology (NIT), whereas sectors such as cars and
clothing do not. A great deal depends on the kinds of business transformations
enabled by NIT investments. Determining the best 'mediation' strategy is the
first step in the process of optimising NIT.
the classic 'disintermediation' strategy, a company might cut away layers of
middlemen (such as distributors) that separate it from customers. A good example
of disintermediation is easyJet, which was able to deal direct with customers.
The first NIT step was the driver of 'electronic deliverability', when easyJet
converted physical activities like internet sales and ticketless travel into
digital processes. The company added 'information intensity' to reduce as many
internal physical processes as possible, such as using its website for job
applications and screening. Another driver, reducing 'search costs', was enabled
by the website remembering essential customer data and providing expanded
tracking details for registered members. The airline uses a 'realtime
interface' so that customers can compare costperseat with other airlines
on a 24/7 basis.