02/09/2012

Bridging the Profit Divide

Dr. Al Bates, Profit Planning Group, offers advice for improving profitability

Al Bates of the Profit Planning Group in Boulder, Colorado, notes that the economic challenges of the last several years have created a "profitability divide" in the industry.  Historically, the top-tier firms have always generated higher profits than more-typical firms.  Now, they are generating a lot more profit.  Slowly, but steadily, the profit divide is widening.

Quite understandably, most firms aren't particularly concerned about something as vague as a profit divide.  Instead, they are looking to ensure their economic viability today so they can continue to compete in the future.  The assumption the typical firm makes is that it can catch up in subsequent years.

The reality is that the higher-profit firms are not only enjoying better results today, they are building a profit advantage that will be increasingly difficult to overcome in the future.  This report will examine the nature of the profit divide and some of its implications for FPDA members.  It will do so by looking at two different issues.  

• The Implication of Different Profit Levels—an analysis of how higher profits today pave the way for much higher profits in the future.
• Making Desired Profitability a Reality—an examination of the essential steps that firms must take now to get on the right side of the profit divide.

To download the entire report, click on the links below.

March 2012 Profit Improvement Report
March 2012 Profit Improvement Report exhibit