Jack Welch’s wife was browsing the net, shopping for X mas from home in hostile weather. Suddenly he picked up the concept and recognised its great future. He immediately sent out a message to his top executives to get to the net and dyb.com. ( do your business . com ) This he said would transform the business, saying that if you can’t use the net you are no longer of this generation, you cant be part of the Company I lead.

This is the future he envisaged to transform the business.

GE moved extremely fast, they began to take the Internet and the business relationship processes to suppliers and customers. They began to look at their core competence in reducing the cost of transaction and increasing customer satisfaction as well as supplier relationships through the net.

Does this mean that Direct sales is going to decline ?

Let us look at the market scenario tomorrow when Internet and other technologies will enable new channels of selling, which are at first sight options to personal selling.

Source from http://www.hkdsa.org.hk/symposium/2003/akhil.pdf

Since 1999 if you go to a Dell website you can decide your own computer system. Dell Computers gives all the charts, and all the specifications of hard disks, mother boards, processors, screens. You mix and match the product to your requirements right on the website. You can place an order and they will deliver in three days - no salesmen ! Dell, once the biggest direct sales Company in computers was starting business on the web.

They moved into this business model and moved 40 % of their revenues to transactions on the net. The transaction costs came down. Why ?

Dell realised it was not a direct sales company. It was in the business of meeting individual needs with many technical options amd price to a well informed buyer who wanted to choose and decide. It was no longer selling like a direct sales company selling a standard product to customer choice.

Even car companies are offering the same choice, if you want to buy an expensive car to your design and specifications. You can specify the colour, the seats, the engine and audio accessories. And get it delivered at you doorstep.

We are moving from an economy based on mass production and vertical integration to mass customisation. We are customising products today where once standardised specifications was the rule for direct sales channel..

Source from http://www.hkdsa.org.hk/symposium/2003/akhil.pdf