Abstract

The confluence of several factors over the last few years has transformed the Internet from an experimenting ground for technophiles and hobbyists into an important and sophisticated forum for commerce. The Web promises to be not only an effective channel for information dissemination, but also for customer acquisition and retention, relationship management, oneon- one interaction, differentiation, cost reduction, competitive positioning and other such activities that are revolutionizing commerce. Unlike traditional distribution channels, the Web possesses several unique features that not only enable the seamless unbundling of the various functions that distribution channels perform, but also helps to realign these functions and increase efficiency by altering the existing economies of scale and scope. Further, the Web provides a whole new opportunity to rethink the way businesses are conducted and holds the potential for radical changes in the way of new products and services. Despite the growing importance of online commerce, most of what is known about the Web as a channel for commerce is based on anecdotes and exploratory studies. There is no formal understanding of how it would affect the structure and performance of markets, and the rapid pace of technological change makes it difficult to predict any long-term effects. Besides, it is not clear if the Web promises to be an efficient channel for commerce for all categories of products, firms and industries and if it should be used differently from other direct sales and distribution channels. My thesis seeks to address some of these issues.

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