In other words, 'Internet doesn't itself create success,
but it allows steps to be taken towards success' (Michael
Dell, managing director of Dell Computer Corp.).
If you're not as famous as Dell and you're dealing with
a rather less concentrated market, the value chain gets
a bit longer. Suppose you're a book publisher, for example
Eyrolles-http://www.eyrolles.com and you sell the titles
your publish through your website. This method allows
you to sell to customers who know your name, or who have
seen an advertisement in the press for a book sold on
your website. But your sales are fairly limited, as the
competition is fierce : the fifteen or so online bookshops
(aggregators such as alapage.com, alibabook.fr or bol.fr)
have captured a large part of the market and are responsible
for part of the sales of your titles on the Web through
their system of electronic commerce. But they themselves
have signed agreements with access providers (portals,
communities or agents) in order to increase their visibility.
They have also set up affiliation programmes destined
for small sites, such as those which list book references
by theme. Soon books like fr.agiligence.fr will also
be available online, on sites such as 00H00.com
We notice that as the value chain gets longer, the chains
also multiply. Eyrolles' books are sold direct on its
own site, but also on a parallel distribution circuit
on the aggregators' sites and sites specialising in online
publishing. Eyrolles obviously also continues to sell
in 'bricks and mortar' bookshops. In this way, the distribution
circuits are superimposed on each other.
The further a supplier is towards to beginning of a distribution
chain, the larger the number of intermediaries, which
is not surprising. Intel, the micro-processor manufacturer,
although it doesn't sell on its own site, benefits from
electronic commerce thanks to tens of thousands of online
distributors, via chains of varying length.
In the case of Dell, there is only one intermediary :
the computer manufacturer, before the final customer.
But for other manufacturers, such as Packard Bell, whose
equipment is distributed by computer equipment aggregators
such as Wstore-http://www.wstore.com, this represents
another link in the chain. Intel also sells to wholesalers,
who sell the computers to retailers, who finally reach
the customer via their website. And to locate these sites,
you have to use a portal site or a comparison shopping
system, such as Juste Prix-http://www.justeprix.qds.fr
with the result that 5, 6, 7 intermediaries have been
added to the circuit.
The multiplication of value chains is not a problem in
itself, and it's a unavoidable fact. For a business, the
trick is nevertheless to analyse it well in order to understand
it, and if relevant, direct it.