Developing Profitability

Service in a Nutshell

Improving profitability is based on two components: 1. optimising pricing (turnover) and 2. optimising cost structure Developing efficient approaches for these two components together creates the essential conditions for the company's success.

Pricing optimisation is key to a company's success. Pricing optimisation is based on the careful management of various factors (volume, price level and the product/service mix). All three factors are taken into consideration in optimising pricing. Pricing may be cost-based, market-based or a combination of the two.

In the cost-based approach to pricing having accurate cost data is pivotal to setting the optimal price levels. The optimisation of the cost structure alone is not sufficient to ensure business success, but developing an efficient cost structure is an essential step in finding the optimal price levels.