Standard Strategy for increasing the Profit of a company

Standard Strategy for increasing the Profit of a company

What is an operations strategy?

An operations strategy is a set of decisions an organization makes regarding the production and delivery of its goods. Organizations may consider each step they take toward manufacturing or delivering a product an operation, and all decisions regarding these various operations are the operations strategy. An organization's operations strategy works in tandem with its overall business strategy, helping the organization to achieve its long-term goals and improve competitiveness in the marketplace.

As a strategic manager I would suggest the following ways - 
1. Remove Unprofitable Products and Services

The products or services with the highest gross profit margin are the most important to your business.

Once you have identified your most profitable products or services you should concentrate on these. You will need to determine if the unprofitable products or services should be removed completely or reviewed for areas of improvement.

2. Find New Customers

New customers can help grow your business. However, this can sometimes be the most expensive strategy for generating additional revenue. On average it costs eight times the amount of money to acquire a new customer as it does to retain a current customer.

The simplest (and most cost effective) way to get new customers is to offer incentives to your current customers and motivate them to initiate referrals for you. Word of mouth is the most powerful form of advertising.

3. Increase your Conversion Rate

Generating new leads is an important part of business growth. But do you know what percentage of these leads eventually convert to a sale? Increasing sales conversion in your business is one of the fastest and lowest cost methods to boost your business profits.

4. Review Current Pricing Structure

Raising prices can be a terrifying prospect; however a small increase in your prices can make a significant impact on your gross profit.

Therefore, correct costing of your products and services is very important. You should review the costing of your products regularly and adjust your prices accordingly.

5. Reduce your inventory

Stock control is a good way to streamline your business and improve cash flow.

With less money tied up in slow-moving inventory and fewer losses due to expired or discontinued inventory. Ordering more frequently allows you to compare prices and take advantage of seasonal clearance or overstock discounts.

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