贝恩咨询分析方法-ProfitPools1.pptVIP

Profit Pools Bc * Author: Dana Peck Reviewer: Michael Collins Profit Pools December 1998 Copyright? 1998 Bain Company, Inc. * Agenda Profit Pools Concept Applications Profit Pool Steps Client Example Key Takeaways * Profit pools are the total profits earned in an industry at all points along the industry’s value chain Pattern of profit concentration in an industry is very different from the pattern of revenue concentration (see example) For example, profits and revenues in the automotive industry can be divided among many value chain activities - vehicle manufacturing, new and used car sales, gasoline retailing, insurance, after-sales service and parts, and lease financing although car manufacturing and dealers account for almost 60% of industry revenue auto leasing and financing are by far the most profitable businesses What are Profit Pools? Profit pools answer the question: “Where and how is money being made?” Source: Profit Pools: A Fresh Look at Strategy (May-June 1998): Orit Gadiesh and James L. Gilbert * What is Profit? Accounting profit - represents company’s earnings as formally reported most commonly used as the basic profit measure examples include net income or earnings per share calculations Return on investment - represents company’s earnings after taking into account the cost of capital invested in the business. Two commonly used measures include: ROC, accounting based Return on Capital (book value) ROIC, accounting based Return on Invested Capital (book value) Cash-flow contribution - company’s earnings before taking fixed-asset and capital costs into account (e.g. EBITDA) represents the amount of cash left from a sale after subtracting the variable costs associated with that sale used as a basis for decision-making in mature, high fixed cost and cyclical industries Profit can be defined in one of three ways: Be aware of differences in accounting standards when evaluating companies with profits spanning different industries Source: Ho