Three Abilities That Determine The Profitability Of An Enterprise

The internal structure of enterprise profit pattern consists of four elements and two divisions of five factors.

The four elements include: first, customer choice.

What types of customers do you want to have, what value can you provide for them, and how can they make profits and make them reasonable?

Second, value acquisition.

How do you get your desired return from your target customers? In addition to the direct carrier of the product, are there any other ways? Third, strategic control.

How can potential profits be protected? What is the real buying reason of customers? How will they be dug away by competitors? Fourth, the scope of business.

What are the main business activities of enterprises? What changes do we need to make to retain the best customers, bring about the expected high profits, and achieve orderly strategic control?

Five

It includes: profit source, profit point, profit lever, profit barrier and profit maker. The profit source is similar to the customer choice, the profit point is similar to the business scope, the profit lever is similar to the value acquisition, the profit barrier is similar to the strategic control, but by contrast, the former's vision is broadened, and the profit maker has a higher level, emphasizing the importance of human factors.

Generally speaking, the composition of the profit pattern can be decomposed by four, and the reexamination after the confirmation of the profit pattern can be deeply judged by five factors.

The four element of the profit model is to ensure that the overall design is always focused on the preference needs of the target customers, so that the business can be brought into the ideal profit area.

At the same time, these four factors should be coordinated and mutually promoted, just as marketing 4P is subordinated to brand positioning, and the four elements of enterprise profit mode must be subordinated to the established profit indicators.

Two, organization and Implementation (management efficiency and low cost): do a good job of making profits.

"The only real effective way to cut costs is to reduce homework at the same time.

We should try to delete the cost that is ineffective, but we should not neglect what we should not do.

The enterprise can not manage the cost itself, but is to manage the internal processes and operations that lead to the cost.

Traditional cost control does not delete the motivation of generating costs - homework, simply cut the budget, and the cost will eventually return to its original level. After the value chain analysis, the cost reduction will naturally decrease.

Transfer the standpoint of cost control from the traditional production stage to the product planning and design stage, and pfer from the downstream business to the source.

This kind of management has been thoroughly analyzed from the very beginning, which helps to avoid a large number of invalid operations in the subsequent manufacturing process, which costs unnecessary costs and makes it possible to substantially reduce costs.

That is to eliminate non value-added operations, improve and improve the efficiency of value-added operations, optimize the operation chain and value chain.

Three, performance management (guided by profit): effective assessment of profitability.

To implement a profit oriented development strategy, an enterprise must survive and develop and grow, first of all, it must formulate a development strategy and make an overall plan in the coming period, such as 1, 5, or even 10 years of development track, determine which direction to go and how to go, so as to achieve the sustainable development of enterprises.

This is the development strategy of an enterprise -- the clear development goal and direction of the planning enterprise, and must be closely centered around this strategy to operate it as the basis and principle of enterprise behavior. It is the main criterion to restrict the short term behavior and long-term behavior of the enterprise, and to judge whether the enterprise behavior is reasonable or not is based on it.

Therefore, to measure an enterprise's survival and development strategy, we should take profits as the starting point, and profit as the core, and finally we should reflect it through profits.

Then, what is profit?

The so-called profit, who knows business sense, knows that the sales revenue of the enterprise is less than the cost.

It is actually a yardstick for measuring the value created by enterprises for consumers, which is higher than the social cost of using such resources.

If consumers are willing to pay you the price, which is lower than the social cost of using this resource, you will lose money.

How can enterprises talk about the survival and development of a company without profits? Therefore, how to make profit oriented development of suitable enterprise development strategy is the primary concern.