Profit Maximization

To stay competitive by creating higher value for consumers firms are in constant search for strategies and tactics that will maximize profit. Profits can be maximized by increasing per unit revenue, decreasing unit cost or a mix of both. This study has identified ten different approaches: Innovation, Brand Image, Customization – Mass customization, Customer collaboration, Long tail effect, Operational excellence, Outsourcing, Value engineering, Moving away from unprofitable customers and Reducing quality. Out of these approaches a manager should select the one that fits the situation best. Maximizing profit by reducing quality should be avoided as it threatens long term survival