Apple Now in Walmart's Distribution Trap

Sept. 13, 2014

Over the years, I have written in this space how a Megacustomer (one that equals more than 10% of a firm’s total revenue) will ultimately capture the lion’s share of value from its supplier.

In our 2010 book THE DISTRIBUTION TRAP, Tim Wilkinson and I laid out the case that the power a Megacustomer is able to exert eventually leads to poor results for the provider: in the form of reduced brand equity, deeper and deeper discounts, and, finally, the accelerated commoditization of innovative products and services.

It seems that even the venerable Apple is now flirting with this danger.

As a Business Insider piece reports, Walmart- certainly one of Apple’s biggest Megacustomers- is already cutting the price of the new iPhone 6.

The temptation to sell to the biggest players in any industry is often too hard to resist. Unfortunately, it happens every day.

Selling to a Megacustomer, and giving them the ability to shape the future of your company, is like losing your virginity.

Once gone, you will never get it back.

Popular Sponsored Recommendations

Digitally Transforming Data and Processes With Product Lifecycle Management

Oct. 29, 2023
Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

3D Printing a More Efficient Factory Floor

Nov. 16, 2023
Today’s additive manufacturing platforms make it simple to print a wide range of high-performing industrial parts as soon as possible and right where you need them — unlocking...

Discover How an Eye Tracking Study Improves Training Procedures

Oct. 29, 2023
Did you know that your training processes can be streamlined by visualizing and analyzing key skills within your employee base? Find out how we use eye tracking to capture advanced...

Guide to Turning Product Data into Profitable Content and Experiences

Sept. 11, 2023
Businesses can lose up to 9.5% of their annual revenue due to bad digital experiences. This guide highlights the need for enriched product content to deliver profitable content...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!