Re:Amazon to Acquire Whole Foods for $13.7B
by lallysingh on Friday June 16, 2017 @01:33PM
(#14570968)
I don't know about that. A good part of Amazon's initial advantage was in their goodwill. Their reviews were (for a long time) pretty fair and would mark bad products as bad. Their customer service was always quite attentive.
I think in growth industries, the potential future of goodwill outweighs the value of expending that goodwill right now. Unless you've already lost the market -- but I don't think that'll be to prices as much as competitors offering more/better products.
So there's a legit strategy that makes sense to a Wall Street firm, where you specifically go after stuff with good will so you can convert that to capital and then flush what's left. It's not dissimilar to how real estate is a form of storing capital, best used without actual people living in the real estate to mess it up: the wipe-and-flush strategy is about intentionally converting these 'rare gems' into raw capital through using the goodwill up.
As long as that is more profitable than not doing it, good customer service (or 'enlightened' capitalistic activity) is something you can't have, or can only have until it's seized and squeezed. Market forces make the wipe-and-flush phase inevitable: the longer you hold out, the bigger a prize that goodwill is, provided the thing is publically held and subject to this dynamic.