What drives your company’s profitability?

Simon R. — Tue, 06 May 2008 07:08:01 +0000

Have you ever had the feeling that you are doing so many things each day that you don’t have enough time left to focus on the things that really lead to valuable results? Most likely you will have taken a pen and paper, prioritised your daily tasks and re-focused your attention on what will advance your personal goals.

The same applies to your company, only that it is much harder to determine for a whole company, which tasks really drive your company’s profitability and which tasks only consume resources with little added value.

Focus 8020 follows Pareto’s famous principle by concentrating your business effort on the 20% of Products and 20% of Customers that really make up the “engine” of your profitability.

How Pareto’s 80/20 Principle Maximises Company Profitability

Simon R. — Tue, 06 May 2008 06:48:15 +0000

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.

Focus 8020 - Maximising Profitability

What drives your company’s profitability?

How Pareto’s 80/20 Principle Maximises Company Profitability