Ideas from books, articles & podcasts.
The key to profitability is to imagine how you are contributing to making consumers better off.
In our advanced economy, with two-thirds of all spending being business-to-business (B2B), your customer may not be the consumer. But the consumer is the user of the final product and therefore the one that determines its value. The consumer, therefore, determines also the value of all contributions in the supply chain, albeit indirectly.
MORE IDEAS FROM THE SAME ARTICLE
The key to profitability is to recognize what businesses are and do from the perspective of the whole economy. Businesses formulate strategies to position themselves with respect to each other and thereby earn profits. So the economic context matters, because it is within the economy that you run...
To stay profitable over time, look beyond your customer and consider your contribution to the value of the final product. Even if your customer does not recognize it, you should meet the opportunity and innovate to offer your customer an upper hand.
Looking at the example of Uber, which upended the taxi services a few years ago, your business is not safe even if you are already making nice profits and the future looks bright.
Profits are rewards for a job well-done. But to maintain profitability, your sight must be set to facilitate future value. After all, the line of production that you’re considering today will not be instantaneously available to your customers.
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