I have been meaning to write a blurb about Amazon ever since I saw a great article on the benefits of Amazon's low margin strategy a few months ago. But a recent article in the Wall Street Journal about huge price cuts on Amazon's top-of-the-line tablet has finally galvanized me into action. Here are my thoughts.
Let's lead in with what Eugene Wei, a former Amazon manager, had to say in November of last year:
Attacking the market with a low margin strategy has other benefits, though, ones often overlooked or undervalued. For one thing, it strongly deters others from entering your market. Study disruption in most businesses and it almost always comes from the low end. Some competitor grabs a foothold on the bottom rung of the ladder and pulls itself upstream. But if you're already sit...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.