Profit Boosters – An Overview

In this series of articles, we explore ten ways in which to boost your profits. The selection on which Profit Boosters[1] will most leverage your bottom line is a function of:

  1. Your business model;
  2. Where your business sits on the industry growth (evolution) curve; and
  3. The dynamics in your current operating environment

 

The first step, is therefore to subjectively review each of the Profit Boosters within your context and decide on whether the potential impact on your bottom line is likely to be high, moderate or low. Once this decision has been made, you then rank order each Profit Booster relative to each other starting with the high impact Boosters and migrating to the moderate Boosters. In this way, your will focus your time, effort and resources on the Profit Booster that is likely to deliver the highest profit leverage.  Low Boosters should be ignored as the cost:benefit is likely to be too small.

 

Each Profit Booster can be linked to a generic strategy[2]. A generic strategy(ies) is/are selected because it is believed that the strategic platform will add disproportionate value to the business and create competitive advantage. Generic strategies are intuitively selected based on the same three criteria described above. There is therefore a correlation between generic strategies and Profit Boosters.

 

The Profit Boosters and their Generic Strategies appear in the table below.

 

Profit Booster

Generic Strategy

Impact

Ranking

1

Business Model Multiplier Effect

Operational Excellence

2

Operating Leverage

3

Operating Agility

4

Scale

5

Focus

Product Leadership

6

Portfolio Breadth

7

First Mover Advantages

8

Control Points

Customer Intimacy

9

Network/Reputational Effects

10

Customer Embedded

 

 

In each of the articles that follow in this series, we will address one of the Profit Boosters in some detail and provide you with a template for developing a logical approach towards implementation.



[1] Adapted from Gary Hamel, Leading the Revolution

[2] Michael Treacy & Fred Wiersema, The Discipline of Market Leaders

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