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Michael struggles to use the data provided by Kevin to produce a more tailored approach. He presents a useful, but basic, framework.
Kevin focuses on the profitability calculations but is more interested in the business implication insights Michael can extract from the answers. Business judgment is vital.
To answer this question, Michael needs to understand the difference between “estimated” and “average” gross margin, and what that would mean for a buyer.
Kevin explains the unique strategy Walmart is able to deploy purely due to the fact that it does not specialize in any single product category.