FOUR

From Declining to Growing Distribution Channels

Let us keep the cannibals in the family.

AS A NEW CHANNEL, the Internet complicated distribution not only by facilitating the delivery of digital goods and services like news and music but also by enabling dynamically priced transactions for just about any physical good or service—among perfect strangers. Electronic marketplaces have proliferated for business-to-business (B2B) sales (for example, FreeMarkets), business-to-consumer (B2C) retail, resale, and referrals (for example, Amazon), and consumer-to-consumer (C2C) resale and services (for example, eBay).

The Internet is but one of several technologies affecting distribution, and new channels inevitably startle managers at large, established ...

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