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Showing posts with the label value added activity

Mapping Your Market Pool and Potential Profits

Knowing in which market a business should compete and the tasks needed to earn profit are necessary for sustainable growth. A paper by Gadiesh and Gilbert (1998) helps strategic decision makers think about their profit pools and how to earn sustainable profits.   Some companies have declined because they were trapped in drying pools and didn’t consider other possibilities in creating new revenue streams. Mapping a profit pool affords the opportunity to see which activities are earning them revenue and which should be adjusted. Furthermore, it also provides an opportunity to open the underlining industry structure and determine which economic forces and pressures are impacting their opportunities. To understand the environment creates greater opportunity for strategic thinking.  Mapping the value pool is a process of outline the value chain activities and then the potential profits of each. It is a process of defining boundaries, estimating the pool’s size, value-chain p