Profit Pools

Knowledge Center

   

Focusing managers and companies on profitable market segments. Explanation of Profit Pools of Gadiesh and Gilbert. ('98)

Contents

  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print

What are profit pools? Description

The Profit Pools method of Orit Gadiesh and James L. Gilbert is a strategy model that can be used to help managers or companies focus on profits, rather than on revenue growth. The idea behind it is: managers need to look beyond revenues to see the shape of their industry's profit pool. In this way strategies can be created which result in profitable growth.


Orit Gadiesh and James L. Gilbert, consultants at Bain & Co. presented the following definition of Profit Pools in their HBR article "Profit Pools: A Fresh Look at Strategy" (May 1, 1998): the total profits earned at all points along the value chain of an industry. Companies that see what others do not see, will be best prepared for capturing a disproportionate share of the profits in an industry.


Although the concept is simple, the structure of Profit Pools is usually quite complex. The pool will be deeper in some segments of the value chain than in others, and depths will vary within an individual segment as well. For example, the profitability of a segment may vary widely by customer group, product category, geographic market, and distribution channel. Moreover, the pattern of profit concentration in an industry will often differ from the pattern of revenue concentration.


Usage of the Profit Pool model

  • Identify new sources of profit.
  • Rethink the role of a company in the Value Chain.
  • Refocusing a company on its traditional sources of profit.
  • Make product decisions, pricing decisions and operational decisions.

Profit Pools Forum
  Where Can I Find a List of Current Industry Profit Pools?
Many people speak of profit pools, but where can I...
     
 
  Profit Pool versus Centre
Is a profit pool the same as a profit centre?...
     
 
  What is Profit ? FIT
Profit is all about being FIT enough to run the bu...
     
 

Profit Pools Special Interest Group


Special Interest Group

Profit Pools Education & Events


Find Trainings, Seminars and Events


Best Practices - Profit Pools Premium

Expert Tips - Profit Pools Premium
 

How to Challenge the Existing Strategic Logic

A B...
Usage (application): Discovering Uncharted Profit Pools
 
 
 

Identifying Profit Pools

Examples of Profit Pools can be found in various i...
Usage (application): Profit Pools, Increasing Profitablity, Horizontal Diversification
 
 

Resources - Profit Pools Premium

Marketing Strategy: Opportunity Analysis; Targeting and Segmentation

Presentation about Market segmentation, target mar...
Usage (application): Marketing Strategy, Target Marketing, Market Segmentation
 
 

News about Profit Pools


     
 

News about Profitable Market Segments


     
 

Videos about Profit Pools


     
 

Videos about Profitable Market Segments


     
 

Presentations about Profit Pools


     
 

Presentations about Profitable Market Segments


     
 

More about Profit Pools


     
 

More about Profitable Market Segments


     

Compare with Profit Pools: Relative Value of Growth  |  Business Process Reengineering  |  GE Matrix  |  BCG Matrix  |  ADL Matrix  |  Core Competence  |  STRATPORT  |  SWOT Analysis  |  Benchmarking  |  Product Life Cycle  |  Bass Diffusion Model  |  Industry Change  |  Positioning


Return to Management Hub: Decision-making & Valuation  |  Finance & Investing  | Marketing  |  Strategy  |  Supply Chain & Quality


More Management Methods, Models and Theory

Special Interest Group Leader

You here


About 12manage | Advertising | Link to us | Privacy | Terms of Service
Copyright 2017 12manage - The Executive Fast Track. V14.1 - Last updated: 25-9-2017. All names tm by their owners.