The Ethical Competitive Advantage

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Despite the poor outlook for scrap metal pricing and declining profit margins for scrap yards as we progress into the year; some within the industry are trying to shift priorities to shift this into an opportunity for their businesses. Some scrap yards are seeing this as an opportunity to gain a competitive advantage by focusing on ethics, with reducing potential negative externalities as scrap yards have the possibility of redeeming stolen scrap metal from thieves taking what they can from pieces of infrastructure such as telephone cables, railroads, and substations. Scrap metal yards like Ferrous Processing and Trading out of Detroit are committed to just that as the firm has taken a firm stance on performing a thorough inspection of their customers, and the scrap they bring in with anything rousing suspicion warranting a call to the police.

The business also tends to focus heavily as portraying itself as not just as a scrap yard, but as a recycler as it does its part in preventing scrap from simply sitting in a landfill as according to the EPA the U.S. generates 14.8 million tons of scrap metal into landfills on an annual basis. There is also an auditing process in place with the firm’s Head of Security, Mr. Bushnell as he continuously monitors the company’s scrap yards for compliance with various laws and regulations as he stated: “There are multiple checkpoints on the transaction that are kept in our system,” in addition, that: “….all our people that buy metal have the option to reject it. If it doesn’t look right or feel right, there’s no obligation to buy it.”.1

Now, one would be inclined to believe that these optional, stricter measures would be harmful for business with consumers possibly going elsewhere, however, that has not been the case. These measures have been paying off despite tough market conditions as Mr. Bushnell is expecting to hire several more employees as the business continues to expand. Those within the industry should take note of this example of a scrap yard joining together with their local community to provide solutions to minimize negative externalities in order to generate a competitive advantage as Mr. Bushnell elaborated: “It’s a win-win. We have demonstrated that ….we can do business in an honest and forthright manner and take care of the environment so we’re not a black eye to the community.”.1

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1. Perkins, T. (2015, February 13). ‘Ethical and professional’ scrap metal yard opens in Ypsilanti Township. Retrieved March 10, 2015, from

S.A. StevensonThe Ethical Competitive Advantage

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