Business Research

Week 5 Problems
January 11, 2011  

1. SupplyCo. is a supplier to a number of firms in an industry.   By carefully mining its customer data warehouse, SupplyCo. reveals a plausible new model for manufacturing and distributing industry products that would increase the overall efficiency of the industry system, reduce costs of production (leading to greater industry profits and more sales for SupplyCo.), and result in greater sales and profits for some of the industry's manufacturers (SupplyCo.'s customers).
On the other hand, implementing the model would hurt the sales and profits of other firms that are also SupplyCo.'s customers but which are not in a position (due to manpower, plant, or equipment) to benefit from the new manufacturing/distribution model. These firms would lose sales, profits, and market share and potentially go out of business.
Does SupplyCo. have an obligation to protect the interests of all its customers and to take no action that would harm any of them, since SupplyCo. had the data within its warehouse only because of its relationship with its customers? (It would betray some of its customers if it were to use the data in a manner that would cause these customers harm.) Or does it have a more powerful obligation to its stockholders and employees to aggressively pursue the new model that research reveals would substantially increase its sales, profits, and market share against competitors?
a. What are the most prudent decisions SupplyCo. can make about its responsibilities to itself and others?
If Supply Co. drives its customers out of business then this will hurt the company however if the overall sales with the new product can exceed any losses, it would be a great business decision.   There is the potential for a distribution agreement with customers to sell the new product under a label (private) then there is the potential for a broad range of benefits.   Supply Co has to manager the new product and business for the best return...