The Strategy Workshop

In his book, Competitive Strategy, Michael Porter describes two generic strategies – differentiation and cost leadership. He shows diagrammatically that return on investment (under each of these strategies can be optimized).   He explains that, under a differentiated strategy, the organization focuses on creating a point of difference in its service offering to an homogeneous [...]

Success breeds success. In a growing and buoyant market, business tends to come to you and profits tend to be solid and growing. Ultimately, success can breed failure. When organizations enjoy solid growth in vibrant markets, over time the company tends to become complacent. It stops listening to its customers and the market. It gets [...]

Organizations that have high levels of fixed costs , can capitalize on the concept called operating leverage. The higher the fixed cost, the greater the potential for operating leverage. Wikipedia defines Operating Leverage as a measure of how revenue growth translates into growth in operating income, a measure of leverage,  and of how risky (volatile) [...]

One of the ways in which management can boost the profits of their business, is to ensure that their strategy leverages key elements of the business model.   Identifying Profit Multipliers   The first step is to undertake sensitivity analysis of the Income Statement to identify potential profit multipliers. There are cost-effective software packages that [...]