Focus 8020 - Maximising Profitability

How Pareto’s 80/20 Principle Maximises Company Profitability

Vilfredo Pareto (1848-1923) was an Italian sociologist, economist and philosopher who discovered that 20% of the Italian population earned 80% of Total Income. This gave rise to the Pareto Principle, which states that 20% of efforts lead to 80% of results.

When applied to a busines context the Pareto Principle suggests, that 80% of  Profits are generated by 20% of products & 20% of customers.

 A Focus 8020 analysis will focus the business on the 20% of highly profitable products & customers to maximise profitability.