Analyzing Firm-Level Strategy for Internet-Focused Reintermediation

We propose a framework for understanding circumstances under which information technology (IT) innovations for electronic commerce (EC) change firmlevel strategic choices, and the economic forces behind these choices, in Internet market competition. We identify a recurring pattern of intermediation, disintermediation and reintermediation: the “IDR cycle.” With this framework, we explain technological reintermediation, where a disenfranchised player is able to compete again, by combining technological innovation with leveragable cospecialized assets. We build this perspective with evidence from the corporate travel industry. The analysis reveals that traditional travel firms have access to a range of strategies that enable them to avoid disintermediation and become more powerful in the long run.