A01 chaf6542 06 se fm indd

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Power of intermediaries

Threats from  buy-  side intermediaries such as business-to-business exchanges are arguably 

fewer than those from  sell-  side intermediaries, but risks arising from using these services 

should be considered. These include the cost of integration with such intermediaries, par-

ticularly if different standards of integration are required for each. They may pose a threat 

from increasing commission once they are established.

From the review above, it should be apparent that the extent of the threats will be 

dependent on the particular market a company operates in. Generally the threats seem to be 

greatest for companies that currently sell through retail distributors and have products that 

can be readily delivered to customers across the Internet or by parcel. Case study 5.1 high-

lights how one company has analysed its competitive threats and developed an appropriate 

strategy.

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