what gg does

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Shapes that drive business profits

Our experience shows that four graphical shapes typically determine business results and achievement. Understanding these shapes can help drive business profits forward through better strategic positioning for competitive advantage and better tactical responses to urgent issues. Establishing where you are as a business on these curves and then drafting credible plans to change their shapes in relation to your business will achieve extraordinary results.

Is your company in the right shape?

ROTA-curve:

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Tracks performance history, establishes performance in relation to competition, and defines the implicit strategic positioning of a company. Forms basis for tactical responses to improve short-term results and establishes a platform for strategic repositioning for new advantage.

CASE STUDY: In a manufacturing company with significant levels of factory floor employees, performance moved from 6% ROTA to 20% ROTA in less than two years by prioritisation of balance sheet improvements over reductions in employment levels where union sensitivity prevented short-term changes. This company improved its profits before tax by just over 100% during this process.

 

Bell-curve:

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Illustrates the impact and extent of randomness in external factors on results. When these are outside the control of management, results are always difficult, disappointing and constantly surprising. Strategies to bring these factors under greater management control will increase certainty, produce more attractive profits and deliver better customer service.

The graph to the left depicts the use of the Bell-curve in The Silurian Customer Profitability Model in order to understand customer profit profiles and the impact they are having on a business.

CASE STUDY: A major metals finishing supplier with 1,200 customer accounts found that while its precious metals business made adequate profits, its base metals commodity business was extremely unprofitable. It re-priced its base metal products by up to 300%. It lost no accounts and the business was transformed: from trading at a $15M loss on $350M turnover, it moved to trading at an $80M profit on $850M turnover within 12 months.

 

S-curve:

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Illustrates the inexorable growth of risk and exposure as a business expands when more resources are assigned to chasing diminishing opportunities and returns. Again, it provides a platform for considering strategies such as downsizing to a minimum assets base or optimising profits by cutting off the exposure to risks beyond the asset base backing.

The graph to the left depicts the use of the S-curve in The Silurian Credit Risk Model in understanding the relationship between credit liabilities, which left unchecked can trigger surprise defaults and the failure of a business as the assets on the balance sheet are not sufficient.

 

Hook-curve:

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Illustrates the asymmetric nature of profit accumulation in businesses. It provides a platform to consider strategies such as downsizing to a minimum assets base, optimising profits by cutting of the tail off unrewarding business operations, or maximising profits by re-engineering the unrewarding tail.

The graph to the left illustrates another feature of The Silurian Customer Profitability Model, the Hook-curve.  This curve shows what impact unprofitable customers are having on a business.

CASE STUDY: A major soft drinks distributor with 6,800 customers discovered that its top 19 accounts delivered the same net profit as the total business.

 

 

How can the gg team help you?

The combination of the skills, expertise and knowledge of the gg team and the distinctive analytical problem-solving models it uses is a dynamic formula for successful strategic development and change management in complex corporate environments. One of the most valuable investments any organisation can make, especially in the current economic downturn, is to engage a gg team to resolve specific problems that are challenging your business. This is the first step in developing new strategic positioning and in establishing greater competitive advantage.


Ask for a free consultation. If our models are likely to provide positive results for you and we are engaged, we will guarantee you will increase your profits by far more than you invest in the programme.


Contact us now on 0845 6435 838 or email: contact@ggmanagementconsulting.com


We look forward to discussing your needs.