Friday, September 21, 2012

Keeping competition at bay?
Walmart announced that it will stop selling Kindle Fires. While some think this is Walmart's effort to prevent the switching of its consumers to online competitors, I feel that there might be something more basic at play. Walmart has often had considerable buyer power when dealing with its suppliers. However my guess is that Amazon did not play the game. This could be because Walmart was not moving enough Kindles or was expecting Amazon to provide better margins.

I think it is a good move because a customer buying a Kindle would possibly be more inclined to make more purchases online. By keeping a Kindle out of the customer's hands Walmart is probably hoping that customers continue to make impulse purchases in its stores rather than perform a careful analysis of online alernatives.

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