Customer-Centric Business

Paper Summary:

This paper discusses how the customer-centric business model is a necessary hybrid delivery system of goods and services in today's business environment. It shows how, with the advent of the Internet and e-business, customers are no longer limited by traditional geographic parameters for their purchase choices. It also shows how other factors that have established boundaries to the consumer's choices, such as limited knowledge of purchase options, time constraints, the inability to travel and research options before making a purchase choice, have since been dissolved.

From the Paper:

"In a market economy, business managers are concerned with making a profit, but the guiding principle of business economics is not the maximization of profits by minimizing costs, it is the avoidance of loss, argued Peter Drucker, management guru and economist. "It is the first duty of a business to survive. This is not to say that profits are unimportant." An enterprise must make enough to cover future risks and to enable it to stay in business. Many firms miss this point. In cutting costs to maximize profits, they liquidate assets and under-invest in innovation Drucker suggests there is only one valid definition of business purpose: to create a customer. "It is the customer who determines what a business is. What the customer thinks he is buying, what he considers "value," is decisive."

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