Late last year I worked with a client who was trying to decide what course to take with a digital commerce business they'd acquired. Without going into too many details, the business unit was effectively competing in a two player market across three or four digital channels. One of those is direct sales through eBay, which generated considerable revenues but produced very poor margins due to highly competitive pricing and the complexity of running a large catalogue on eBay. My recommendation was to cease trading this channel for two reasons: To simplify the business' operations so that the management could focus on gaining control in areas that are likely to be more critical to future success (read: direct, branded channels) If we cede control of an unprofitable, non-strategic but relatively large revenue channel to the competitor then it may well distract them from our renewed focus on the areas we think are really crucial for long-term victory I realised later th...
Thoughts on strategy in a Digital Economy