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Breaking Structural Barriers- It is useful for a firm to break structural barriers that inhibit its operations or limit its drive for competitive advantage. Computers as well as telecommunications networks is able to help a business develop strategic relationships by establishing's new electronic linkages with suppliers, computers and other business entities. The Intranets, Internet, Extranets and other telecommunication networks can support innovations in the delivery of services raise the scope and penetration of markets.
Exp - Miller Brewing with Reynolds Metals: -The Miller Brewing Company is a customer of Reynolds Metals Company in addition to one of Reynolds's EDI business partners. Miller is assisting Reynolds reduce the inventory of aluminium coils used at tin can manufacturing plants and track the quality of aluminium that is received from Reynolds and other suppliers. Reynolds developed software that make possible Miller to use EDI and extranet links to Reynolds to track in transit inventories as well as do materials forecasting and ordering as well as quality control monitoring. Therefore EDI and Reynolds's extranet have helped it to develop a new business alliance with one of its biggest customers.
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It allocates costs based on the price elasticity of demand. Yet higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products.
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