Jove
Visualize
Contact Us
JoVE
x logofacebook logolinkedin logoyoutube logo
ABOUT JoVE
OverviewLeadershipBlogJoVE Help Center
AUTHORS
Publishing ProcessEditorial BoardScope & PoliciesPeer ReviewFAQSubmit
LIBRARIANS
TestimonialsSubscriptionsAccessResourcesLibrary Advisory BoardFAQ
RESEARCH
JoVE JournalMethods CollectionsJoVE Encyclopedia of ExperimentsArchive
EDUCATION
JoVE CoreJoVE BusinessJoVE Science EducationJoVE Lab ManualFaculty Resource CenterFaculty Site
Terms & Conditions of Use
Privacy Policy
Policies

Related Experiment Videos

How to map your industry's profit pool.

O Gadiesh1, J L Gilbert

  • 1Bain & Company, Boston, MA, USA.

Harvard Business Review
|April 7, 1998
PubMed
Summary

Managers can improve strategy by understanding industry profit distribution. A profit pool analysis maps where profits are generated across value chain activities, revealing strategic opportunities.

Related Concept Videos

You might also read

Related Articles

Articles linked to this work by shared authors, journal, and citation graph.

Sort by
Same author

Meeting of the Northeastern Indiana Medical Society.

Medical examiner (Chicago, Ill.)·2023
Same author

Pseudoplasticity and setting properties of two-solution bone cement containing poly(methyl methacrylate) microspheres and nanospheres for kyphoplasty and vertebroplasty.

Journal of biomedical materials research. Part B, Applied biomaterials·2009
Same author

Giant Cell Arteritis in AJ Americans.

Journal of clinical rheumatology : practical reports on rheumatic & musculoskeletal diseases·2008
Same author

Hot compaction of poly(methyl methacrylate) composites based on fiber shrinkage results.

Journal of materials science. Materials in medicine·2005
Same author

Analysis of the shelf life of a two-solution bone cement.

Biomaterials·2005
Same author

The effect of processing temperature and time on the structure and fracture characteristics of self-reinforced composite poly(methyl methacrylate).

Journal of materials science. Materials in medicine·2004

Area of Science:

  • Business Strategy
  • Industrial Economics
  • Management Science

Background:

  • Many managers develop strategies without fully understanding profit sources and distribution within their industry.
  • A common misconception is that revenue growth automatically leads to profit growth, neglecting the analysis of profitability.
  • Lack of data and analytical tools often hinders the isolation and measurement of profitability variations.

Purpose of the Study:

  • To present a framework for analyzing profit distribution across an industry's value chain.
  • To introduce the concept of a 'profit pool' for a comprehensive understanding of industry profitability.
  • To enable managers to identify high-profit and low-profit activities within their industry.

Main Methods:

  • Defining the boundaries of the profit pool.
  • Estimating the total size of the profit pool.
  • Estimating the profit size of each value chain activity.
  • Reconciling and verifying calculations.

Main Results:

  • A profit-pool map provides a clear view of where profits are generated in an industry.
  • Identifies activities with disproportionately large or small profit shares.
  • Reveals underlying industry structures and forces influencing profit distribution.

Conclusions:

  • Profit-pool mapping is a robust basis for strategic thinking and decision-making.
  • Understanding the profit pool helps in identifying strategic advantages and areas for improvement.
  • Organizing profit pool data visually aids in developing effective profit-pool strategies.

Related Experiment Videos