Sources:http://hbr.org/1998/03/the-power-of-virtual-integration-an-interview-with-dell-computers-michael-dell/ar/1
For profit corporations have one main goal: making more money than they spend. There are many conventional ways of doing this, namely increasing sales and increasing the profitability of the goods sold. But I have learned that innovative companies are streamlining their Operation related costs to save themselves, and indirectly the consumer, money.
The computer company Dell, for example, has refined the personal computer industry’s dominant business model. Their process of Virtual Integration strikes me as insightful and innovative. Besides the clear financial advantage of cutting out the middle man, I believe Virtual Integration stands out because of its particular ethical repercussions.
Now one might ask: “What on earth is particularly ethical about making more money?”
The answer comes in two parts: Primarily, it reduces the price consumers have to pay. This forces other corporate competitors to lower their prices to complement Dell’s in order to maintain their relative market shares, thus supporting the idea of a “perfect market” in which competitors selling a nigh identical product all compete fiercely for a buyer’s capital.
Secondly, it fosters innovation amongst suppliers. If Dell, for example, isn’t satisfied with a current supplier’s product, and has no backlog of inventory to deal with, it can simply switch suppliers. This loss of a critical partner for the supplier will drive them to innovate and trigger a faster development of technology in order to maintain profit. It keeps the industry on the bleeding edge, which is good for everyone.
In all, I believe if a company can find an innovative and generally beneficial way to increase profit while reducing costs for the consumer as well as promoting innovation in multiple sectors, its a win-win for everyone involved.