-
Strategies for a discontinuous future.












Monday, May 31, 2004
 


Increasing returns:

"...Under federal law, such discounts are legal if a toymaker can show it saves more money by selling to Wal-Mart than to its competitors, said Joseph P. Bauer, a professor of law at Notre Dame Law School. The more toys Wal-Mart buys, the more discounts it can demand from a manufacturer, he said"

Increasing returns in economics go back a long time - at least to Marshall. No one's really had a proper 'answer' for the 'problem' that various kinds of increasing returns (supply-side, demand-side, scale, adoption, etc) pose - which is not just monopoly, but a kind of viral monopoly: monopoly that grows across markets and industries. Wal-Mart, of course, is a great example.

The answer, I think, comes from strategy, not economics - strategy tells us that every business model decays, and the decay of Wal-Mart's model is more than evident. It should be considered an economic early-warning signal.

-- umair // 10:54 PM //


Comments:
Post a Comment
search



new


input

due diligence
ventureblog
a vc
techblurbs
tj's weblog
venture chronicles
terranova
the big picture
gigaom
venchar
bill burnham
babak nivi
n-c thoughts
paidcontent
techdirt
slashdot
london gsb
mefi
boingboing
blort
hardwax
betalounge

ing
morgan
chicago fed
dallas fed
ny fed
imf
world bank
nouriel roubini

portfolio
contact

mail.
uhaque (dot) mba2003 (at) london (dot) edu

skype.
umair.haque

atom feed

technorati profile

blog archives