Analyzing Firm-Level Strategy for Internet-Focused Reintermediation

  • Authors:
  • Alina M. Chircu;Robert J. Kauffman

  • Affiliations:
  • -;-

  • Venue:
  • HICSS '99 Proceedings of the Thirty-second Annual Hawaii International Conference on System Sciences-Volume 5 - Volume 5
  • Year:
  • 1999

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Abstract

We propose a framework for understanding circumstances under which information technology (IT) innovations for electronic commerce (EC) change firm-level strategic choices, and the economic forces behind these choices, in Internet market competition. We identify a recurring pattern of intermediation, disintermediation and reintermediation: the "IDR cycle." With this framework, we explain technological reintermediation, where a disenfranchised player is able to compete again, by combining technological innovation with leveragable co-specialized assets. We build this perspective with evidence from the corporate travel industry. The analysis reveals that traditional travel firms have access to a range of strategies that enable them to avoid disintermediation and become more powerful in the long run.