It is going to CANNIBALIZE our business.
We don’t know yet which goods and services will turn out to be most suitable for e-commerce. But we do know that any success in selling through e-commerce, whether business-to-business or business-to-consumer, is going to be seen as a threat by the traditional distribution channels, such as the supermarkets or the local offices of the brokerage houses. “It is going to CANNIBALIZE our business,” the traditional distributors will scream. Actually, if past experience is any guide, it may, in many cases, ADD traditional business and actually, increase their business and their profits. That’s very often the result of a new distribution channel.
But we won’t know that for a good many years. Nor will we know for some years which goods and services will lend themselves to distribution through e-commerce. And there’s no point in trying to guess. So the decision to push e-commerce is a risky one. And yet, no business can risk NOT pushing e-commerce if there’s the slightest indication that it will become an important distribution channel for its goods and services, if not the most important one.
ACTION POINT: List the three main ways e-commerce has changed your distribution channels and the three ways it will change those channels in the next few years.
Managing in a Time of Great Change
The Five Deadly Business Sins (Corpedia Online Program)
* Source: The Daily Drucker by Peter F. Drucker