accelerate growth in cash flow and operating value
the answer is …
bring Marketing and Finance together to focus on those parts of the market that offer the best long-term, cash-based profitability
Understand ACTUAL PERFORMANCE at a granular level.
opportunities and issues are hidden in the granularity and need to be proactively sought; only a blend of Marketing and Finance skills will be able to deliver the insights needed
Get a useful visibility of profitability - by offering, customer, channel and geography - at a granular level
Cut through GAAP to determine actual, cashprofitability
Identify cross-relationships and inter-dependencies between each area ofthe business (or "internal Profit Pool")
Characterize relative market positioning in each area – now and into future – to understand long-term profit prospects
Get a STRATEGIC VIEW of markets.
forecast demand using customer value propositions, etc.; in this example, there are many unpenetrated markets ...
…and determine which markets are profitable (now, and into the future)
Define a path that EXPLOITS OPPORTUNITIES, while minimizing issues.
in our example, when we synthesize the market and economic information to find future cash profits, we can see where the real market Profit Pools are - significantly different from where the business was originally deploying growth investments
going forward, managers must re-orient Market Strategy under a value-based prioritization regime, and watch Cash Flow grow in the near- and long-term
Prioritize capital and ongoing market investments towards growth in larger, long-term market Profit Pools
Revisit Market Strategy – now oriented around Profit Pool based, priorities
Minimize presence in less attractive markets and segments (where not possible to fully exit them; inter-dependencies must be respected)
Typically best to first maximize performance in existing markets, then subsequently address new and uncharted markets
