Strategy consultants are often engaged to recommend ways to improve an organization's profit. They typically examine both ideas for increasing revenue and reducing costs. They will compare the target organization to its competitors and to other participants in its value chain. There are some excellent charts that help consultants identify opportunities for profit improvement. I created a presentation that includes many of these charts and explains how they are used.
The presentation contains examples of:
- profit pools--analysis of the profits for each component of the industry's value chain
- competitor profit and market share bubble chart--comparing return on sales and relative market share for the industry's competitors
- product line profitability--profit and sales for each of an organization's product lines in both a bar mekko and a 100% stacked bar chart
- product line competitive product opportunities--profit for each competitor in each product line in a Marimekko chart
- customer segment profitability and growth--identify high profit and high growth customer segments in a bubble chart
- profit improvement plan--show the impact of the profit improvement plan in a cascade (waterfall) chart.
Here's the presentation for downloading. I'll add other toolkits in the coming months.
Let me know what you think and if you have any suggestions for additional toolkits.