The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
A company’s business design is composed of four strategic elements: (1) customer selection, (2) value capture, (3) strategic control, and (4) scope.
Adrian J. Slywotzky • The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
As a firm becomes more experienced at manufacturing a product or delivering a service, its price per transaction decreases. A firm that specializes in the delivery of a particular product or service and has more experience in those transactions will be more profitable than a firm without
Adrian J. Slywotzky • The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
Companies that implement a customer development model invest heavily to understand their customers’ economics and find ways to make them more favorable. They reach the profit zone by first probing how their customers buy and use their products and then finding ways—beyond merely selling the products—to help the customers in the difficult, expensive
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protect the profit stream that the business design has created against the corrosive effects
Adrian J. Slywotzky • The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
Return on Sales = EBIT/Sales;
Adrian J. Slywotzky • The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
While a company is developing a powerful business design to generate profit growth, it must simultaneously search for and develop the strategic control points in its industry. The purpose of a strategic control point is to protect the profit stream that the business design has created against the corrosive effects of competition and customer power.
Adrian J. Slywotzky • The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
As an organization translates a profit model into action, it must execute effectively at the level of the individual customer—where profit is ultimately created.
Adrian J. Slywotzky • The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
10 to 15 percent of the customer base is unprofitable, consisting of buyers who absorb the company’s resources and do not provide a return.
Adrian J. Slywotzky • The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
ratio of assets to sales.