How Strategic Business
Design Will Lead You To
Tomorrow’s Profits
THE PROFIT ZONE
(Adrian J. Slywotzkyr· David J. Morrison/
Crown Publishing Group/December 1997/352 pages /$25.95)
국내미출간세계베스트셀러(NBS) 서비스는(주)네오넷코리아가해외에서저작권자와의저작권계약을통해, 영미권, 일본, 중국의경제·경영및정치서적의베스트셀러, 스테디셀러의핵심내용을간략하게정리한요약(Summary) 정보입니다. 저작권법에의하여(주)네오넷코리아의정식인가없이무단전재,
THE PROFIT ZONE
How Strategic Businessinstantly
Design Will Lead You To Tomorrow’s Profits
MAIN IDEA
Conventional business thinking has been that market share is king -- in other words, whichever company has the largest share of the market will ultimately generate the greatest profits.
The Profit Zone philosophy, however, suggests that not all market share is created equal. Specifically, in any market, there will be one strategic area where the greatest amount of added value for the customer will be created. Whichever company can dominate that key strategic area -- The Profit Zone -- will generate the greatest profits and the greatest market valuation -- irrespective of what their share is of the market as a whole.
Business get into the Profit Zone through the u of specific profit models -- explicit strategies for generating revenue. There are a large number of profit models which can be ud.
Before a profit model can be brought to bear, however, the business must first be designed effectively and efficiently across four business dimensions:
1. Customer lection -- who the business targets as customers (and who is not targeted).
2. Value capture -- specifically which profit model will be applied.
3. Strategic control points -- which differentiate a products.
4. Scope -- the range of business activities which will be performed by the business rather than outsourced.
topekaAnd finally, developing a business design to position the business in the Profit Zone is not a one-time activity -- it must be performed again and again if long-term success is to be achieved. Why? Simply becau the Profit Zone in any market is in a constant state of flux and transition -- it moves as customer preferences move and change.
Main Idea
Conventional business thinking was:
1. Do anything that is required to win market share.
2. Profitability will follow as a natural conquence.
动员会主持词The Profit Zone concept suggests a better approach is to ask:
1. What do customers value the most?
cheap
dullahan2. How can we make a profit providing that to customers?
3. How can we increa our market share in that area?
In short, the Profit Zone suggests that profitability rather than market share should be the focus, and everything a company does should focus on positioning the company advantageously in that part of its industry where the greatest profits are earned. Supporting Ideas
The business design of any company esntially has four interlinked components or dimensions:
1. Customer lection
‘‘Who does the company choo to have as customers – and which customers are specifically not rved?’’
指出
No business can possibly be all things to everyone. Success requires a choice to be made. A good business knows the type of customer it is best suited to rving -- and is prepared to migrate to new groups if necessary.
2. Value capture
‘‘How is profit made -- which profit model applies?’’
Companies may capture part of the added value created by product-centric (product sales, rvice fees) or profit-centric (licensing, revenue sharing, financing, add-on product sales) types of models.
3. Strategic control
‘‘How can a product offering be differentiated and unique?’’
Companies which dominate the key strategic control points in any market are best positioned to provide significant and sustainable points of differentiation -- thus providing a disincentive to buy elwhere.
4. Scope
‘‘What business activities does the company choo to perform and which are provided by third parties?’’
Most companies are constantly fine tuning their products, rvices and solutions offerings in an attempt to remain:
1. Relevant and esntial to the needs of customers.
elem2. In a high profit generating zone.
3. Strongly differentiated and well placed strategically.
Since the Profit Zone constantly changes in sync with movements in customer preferences, any company’s business design must undergo constant and ongoing
reinvention.
To deal with this dynamic fluidity, business managers need to avoid worrying about market share and focus instead on:
■Where profitability lies today.
■Where profitability will lie tomorrow.
■How the business needs to change to position itlf well to generate profits once that shift occurs.
Dimension #1 -- Customer Selection
Profit Zone thinking is profit- and customer-centric rather than product-centric. To illustrate the difference, contrast a traditional value chain with a customer-centric value chain:官方大学排名
In the customer-centric version, relevance to the customer becomes the driving force behind the whole value chain –rather than looking at what the company does well. However, even being customer-centric lacks punch unless a profit-centric business design is also harnesd.
Dimension #2 -- Value Capture
实现梦想英文Being profitable is not necessarily a by-product of being in business. A logical, sustainable profit model must be adapted if a company aspires to greatness. Profit is the outcome of good business design. Some widely ud profit models are:
1. Total Solution Profit
Early loss -- substantial profits later
The company invests resources to develop a solution that will form the basis of a
long-term working relationship. For that reasons, early loss are expected while the solution is under development in anticipation of significant later stage profits to come.
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2. Product Pyramid Profit
Two versions -- one volume, one highly profitable
At the ba of the pyramid is a low-cost high-volume version of the product. At the top is a low-volume high-cost version. Almost all profits are generated by the high end product, but the existence of the low-end product keeps competitors out
3. Multicomponent System Profit
For some systems, the profit level for various components is great while others are sold at or near cost. Profits are generated by lling whole systems.
4. Intermediary Profit
If transaction costs are high, an intermediary between buyers and llers can generate profits as a proportion of the cost reductions achieved. (Network dynamics
