December 2, 2016
 
 
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Reflections on Open Source Commerce, Part 1 - page 2

Yin and Yang Redux

  • May 14, 2008
  • By John Terpstra

The purpose of business is to make a profit, or at a minimum to be able to sustain operations from incoming cash flow. For the personal computing market this is particularly challenging. I invite you to consider why.

The holy grail of business is to sell stuff in acceptable volume at sufficient margin to be rewarding. The reward, or return, that justifies sustaining of the business depends on the goals and objectives of the organization. A not-for profit organization has entirely different objectives than a for profit business. In a market such as the information technology world, where component costs are falling rapidly and where consumers expect accelerated cost reduction and like to see increasing overall system performance , finding the right reward can be a vexing proposition.

Computer hardware vendors do battle with supply-chain and distribution-chain dynamics in a highly competitive world. This business environment results in extreme conservatism and reluctance to engage in products that may not move rapidly, or that may result in excessive post-sale support costs. Slow moving inventory is a sure recipe for financial loss where supply-side prices are constantly in rapid decline and where early obsolescence results in short product life cycles.

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