Abstract

Today’s economy is increasingly driven by the integration of information in many aspects of business. Greater information intensity in industries such as hospital supply and express package delivery is causing a fundamental transformation in the way firms conduct business, the menu of competitive choices that they are faced with, and the need to continuously keep ahead of competitors. Information driven businesses appear to adopt several competitive or operating innovations. These include: mass customization or the creation of customized products which offer virtually individualized products to customers in mass markets (Pine, 1993); disintermediation or the creation of direct links between producers and consumers such that traditional intermediaries such as wholesalers and retailers are removed from the value-added chain in an industry (Office of Technology Assessment, 1994; Benjamin and Wigand, 1995); self-design of products by customers as firms allow them to design products in-house and then transmit production specifications directly to suppliers; faster response times as direct communication links between customers and suppliers enable reduced order entry and processing cycles and on-demand production (Keen, 1993); and lower transaction costs arising from expanded use of single-source electronic sales channels (Picot and Kirchner, 1987).

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