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Yet, Walmart has another major advantage linked to seasonality and this directly impacts merchandising. Kevin tries to help Michael identify this advantage.
To ensure the category increases Walmart’s overall gross margin, Michael tries to think through all the criteria Walmart would need to apply when selecting toys.
Michael recalculates Walmart’s income statement based on the strategy he has developed for Walmart to enter the category and beat Toys-R-Us.
Kevin explains why Walmart’s strategy is mistakenly assumed to be its significant purchasing power. Kevin explains the advantage that leads to the purchasing power.