Profit Law: The Profitability Rule in the Era of Thin Margins, The Path to Profitability of Successful Enterprises

Author: Bai Lixin
Publisher:
Publish Date: 2006-01-01
Features: Profit is hidden in the weak links of the industrial chain. If you identify the weak links of the industrial chain, you have found the profit pool. If the profit pool you find is closer to you, even if your management foundation is weaker, it won’t hinder you from earning sufficient profit. Conversely, if it is a profit pool on the verge of drying up, it’s best to leave early or seek bankruptcy protection. The profit channel directly leads to the profit pool. In the profit channel, businesses provide value to customers, and customers repay the business with profit for fixing the industrial chain. There are three common profit channels: product leadership, customer-first, and low-cost operations. If you haven’t found a new profit pool or if the profit pool is distant from both you and your competitors, as long as your profit channel is more efficient, you will still benefit greatly. The profit engine creates profit momentum. You need to install a profit engine on the profit channel to ensure a continuous flow of profit. Chinese enterprises can increase profit momentum by controlling nine profit points. If you clearly identify the profit pool and lay out the profit channel, the stronger your execution, the greater the profit momentum and the higher the profit returns. Customers refuel the profit engine. To start and operate the profit engine efficiently, you need to provide it with ample fuel—the best source of high-quality fuel is customers. If you fail to outperform your competitors in the first three stages, customers are your last chance. You shouldn’t passively serve customers but should actively seek alliances with them, even to the point where customers serve you. This is the four laws of profit.