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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (871)	12/29/1998 11:39:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 4691

Shane, I raise the issue because I believe that evolution in business, just as in nature, is inevitable, and those businesses that do no evolve will die. What is interesting in this context is that a Buffett company, GEICO, was a forerunner of the net. Using direct sales instead of agents, GEICO was able to substantially under-price its competitors, while at the same time making good profits for itself. It did this partly by eliminating an unnecessary layer of profit, the agent, who is roughly analogous to the retail store. I find that e-commerce is very compelling in a number of areas. Does not the existence of SI along with myriad other sources of almost instantaneous information, provide proof that the dissemination of news is undergoing a radical change? I have found myself shopping on the web. I am a movie buff, and I can buy DVDs with only nominal shipping charges and no tax at substantial savings over the local retailers (10% or so less than the discounters like COSTCO, and up to 40% under full price). I use barnesandnoble.com to buy books (if I know the title of the book I need). The point I originally made is that specialty retailers will be under increasing pressure from e-commerce. But it also will affect all levels of business, because it affords the opportunity for tighter inventory control and enhanced profitability. This has spawned a new class of business software: SCM (for supply chain management) which is important for outfits as mundane as grocery stores. So, the opportunities are out there for those of you brave enough to dip your toes in uncharted waters, but those same waters can easily swamp your "safe" holdings if you are not wary of the implications. As I said before, we are on the cusp of a new Industrial Revolution, and its direction and scope is not yet visible. But one thing ought to be clear: it will have major ramifications for all kinds of businesses from voice and data transmission to green grocers. TTFN, CTC