Business Strategies: Working for Needs of a Customer and not for Profit

How should a for-profit corporation balance its business needs with the needs of its customers? “There are many things a for-profit corporation must balance such as pleasing shareholders, gaining customer loyalty, profit, and innovation. A corporation must balance their needs with these needs. For a for-profit corporation to be able to adjust their business needs and their customers is the focus of the customer needs first because without the customer there is no company and any profit for them to take. In" Modeling Customer Lifetime Value" it explains how a company's value of customers over time will help increase company profit and value in the long stay of a company.

In " Modeling Customer Lifetime Value" it states that "the purpose of maximizing customer lifetime value (CLV) and customer equity, which is the sum of the lifetime values of the company's customers" (Gupta, Hanssesns, Hardie, Kahn 2006). I agree with this article that a company such as a main for-profit focus should be building a relationship and complying with all needs of their customer because it builds loyalty and keeps them buying company products helping keep a steady profit. In "Long-Run Investment Decisions, Operating Performance, and Shareholder Value Creation of Firms Adopting Compensation Plans Based on Economic Profits" (Hogan & Lewis 2005) explains "Firms adopted economic profit plans, document changes in investment behavior that lead to improvements in operating performance and growth opportunity related to the firm."

Hogan and Lewis explain how investment decisions made by executives that are based on performance and are paid in compensations bonus based performed much better because they focused more on the customer. Because the executives focused on themselves to make more money, they focused more on the customer needs, which in return brought more profits to the company and shareholders. A company must focus more on the customer needs than either own. It's hard to balance both, but the customer should come before the company. If a company doesn't focus on a customer's needs, then they could go to another company that is similar to your company but also focus on that customer's needs. Which brings up a focus of the company, and the necessity of patients to protect the company from allowing other companies to copy their products.

Lives depend on products created by some companies. Do these companies have a greater responsibility to work towards benefitting the consumers more than themselves? I believe that all companies have some responsibility to work towards benefitting the customers more than themselves. Companies should care more for their customers, "Do not merely look out for your interests, but also for the interests of others."(Philippians 2:4) That even though they should worry about corporate profit and making the most money, a company should care more about how a customer is benefitting than how much they make off a customer. In "Shareholders and Social Responsibility," (Schaefer 2007) argues, "Social responsibility of big corporations is merely to increase its profit. "But instead of focusing on the needs of the company, companies should instead focus on the customer instated of shareholder and Stakeholder because it will benefit the company in the long run. It is hard for a company to focus on trying to help the customers more than themselves because of greed. I believe that greed stops companies from trying to benefit the customers more than themselves, but if they focused more on this, then the customer would build more loyalty towards the company's brand, which would help the company in the long run. Look at the issue from a Biblical worldview.

How would you respond if you were running such a company?From a Christian view, I believe that all for-profits should share and should be for the customer. I know the primary purpose for a for-profit company is to make as much profit as possible. In the article "Supreme Court Gives Samsung a Reprieve in Apple Patent Case" the Supreme Court came up with the common outcome to possibly not force Samsung to pay $399 million in profits for copying parts of the distinctive look of the Apple iPhone. I believe that Samsung shouldn't have to pay the full amount but should have to pay some of that money to Apple. In Luke 3:11, John replies" If you have two shirts, give one to the poor. If you have food, share it with those who are hungry." That everyone should share, God put us on this earth to prosper and preserve the earth. I believe that if all for-profit were to not focus so much on themselves and focus more on the customer, they would be able to help the world prosper and make it a much better place. Imagine if instead of suing Samsung, Apple decides to join forces with Samsung. Maybe they could help make better medical technology or help invent technology that helps cure a disease.

If I were running one of these big for-profit companies, I would take advise from my current mentor who runs the Bank of New York. As he has told me I will be in a position someday as he is in now running a big corporation always to try and push forward. He still involved in the big merger of my bank, and he told me always to try to work together and try to have deals with other banks because they might have insight that I may not have. So if I was running a big for-profit company such as Apple is I would worry about making the iPhone a little, but I would focus on trying to do the next big thing that will benefit the customer more than the company. I would even try to figure out how to try and do business with Samsung and join forces because maybe joining forces could benefit the world more.”

References:

1. Goel, A. L. (2016, December 06). Supreme Court Gives Samsung a Reprieve in Apple Patent Case. Retrieved September 29, 2017, from https://www.nytimes.com/2016/12/06/technology/samsung-apple-smartphone-patentsupreme-court.html?_r=3
2. Gupta, S., Hanssens, D., Hardie, B., Kahn, W., & al, e. (2006). Modeling customer lifetime value. Journal of Service Research: JSR, 9(2), 139-155. Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquestcom.ezproxy.liberty.edu/docview/210501995?accountid=12085
3. Hogan, C., & Lewis, C. (2005). Long-Run Investment Decisions, Operating Performance, and Shareholder Value Creation of Firms Adopting Compensation Plans Based on Economic Profits. The Journal of Financial and Quantitative Analysis, 40(4), 721-745. Retrieved from: http://www.jstor.org/stable/27647222