Management Musings

In an interesting blog post by Paul Krugman this week, he lays into Amazon and the power that it wields in the books marketplace today. Amongst many other points he makes, he mentions that while Amazon is not a monopoly in trying to use its power as a dominant seller to increase prices but instead, is a monopsony - using its power to keep prices low for its customers. In the particular example of Amazon v/s the book publisher Hachette, Amazon was able to squeeze the publisher into giving a larger share of the book sales to Amazon by disrupting the sales of their books on its website. Books from Hachette would take longer to be delivered when compared to books from other publishers and such. Amazon used its power to influence the market place to benefit itself and also its customers. In the Indian landscape, Amazon has not yet achieved the kind of power that it ostensibly wields in the American market place. E-commerce websites such as Flipkart, Snapdeal and even Junglee were alre...