Benchmark Firms Internal and the Research Paper

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The gym staff (orientation guides, trainers, class instructors) treat the employees who use the gym as customers, but since both the gym staff and the employees are ultimately employed by Sony Pictures, the gym users are internal customers.

External customers are the end-users, whose money spent on the company's product or service keeps the company in the black and pays for the employees' salaries. This is the important distinction between the two types of customers. The end-user keeps the company afloat, while the internal customers are a drain on the system. However, both are a necessary element of the corporate machine. Using the Sony Pictures example, there are two levels of external customers. For a theatrical release film that Sony distributes itself to the theaters, the first level of external customers is the theater itself who pays for the right to show the film in its movie theater.

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The ultimate end-user is the ticket purchasing movie-goer because a portion of that ticket cost goes back to Sony and determines whether or not the film made enough money to be considered a box office hit, or a flop. For a straight to video movie that Sony Pictures purchases completed from a producer, it will distribute such film internationally through distribution companies that will pay Sony the right to distribute the film in certain forms in certain territories. Those distribution companies are the first level of external customers, then again, there is the end-user who purchases or rents the DVD or downloads the electronic version of the film for a fee. A portion of that fee paid by the viewer goes back to Sony. Both.....

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