Madison Manufacturing makes small appliances and faces tough competition from overseas firms that make similar products less expensively.Madison managers have decided to offer more services to customers,such as maintenance agreements and warranty contracts.Madison now deals directly with end-users instead of relying on intermediate channel partners.What is the most likely result of Madison's shift to services?
A) horizontal integration
B) channel free-riding
C) upstream integration
D) service acquisition
E) disintermediation

Question

Quizplus · Accepted Answer

Madison's shift towards offering more services directly to end-users instead of relying on intermediaries is an example of disintermediation, which is the elimination of intermediaries in a supply chain. By offering more services directly to customers, Madison is cutting out the middlemen and reducing costs, which could help them compete more effectively against their overseas competitors.

Madison Manufacturing Makes Small Appliances and Faces Tough Competition from Overseas