Think out of the box
To succeed in any sort of business venture, managers should be
strategic and think out of the box when implementing profit models not
only in turbulent periods but also in good times, Indian Institute of
Management, Strategy Prof Ranjan Das said.
Prof. Ranjan Das
“It is necessary to design and utilize a profit model, which is a
strategy that addresses all the core elements of the business operating
system that go into making the company viable and profitable, Prof. Das
said at a seminar which was held last week under the topic “Alternative
Profit Models” organized by E Morgan Relations.
To implement strategies one need not be a MBA graduate and or have
any other education qualification, but must think out of the box and
implement profits models strategically, to suit to the situation
accordingly. Business designs themselves create the basis for the profit
model and without a workable operating structure that addresses
production, sales generation and delivery, there is no working profit
To ensure that there is money made above and beyond company expenses,
it is necessary to make sure that each component of the company is
working at top efficiency and contributing to the financial health of
the organization, Prof. Das said.
The foundation of the profit model exists within the production and
operating components of the model. The management must be effective in
operating equipment and personnel and the product that is produced must
be top quality, but manufactured at the lowest possible cost, because
resources available to business entities are limited, he said.
One way to ensure this component of the profit model is working
properly to maintain the operating equipment, making sure employees are
trained and frequently given refresher training, and that management
does not become top heavy with too many positions.
Prof. Das added that sales and marketing component of the profit
model is the creative component that gets the word out and about the
products and services offered by the company, and piques the interest of
consumers in the products.
This may be done with the use of ad campaigns, various sales methods,
and cultivating strong word of mouth among consumers. Keeping this part
of the profit model operating often means being open to new ways to
market the products or developing secondary products that will expand
the client base.
The delivery of goods and services to the end user is extremely
important to the profit model. A company may produce excellent products,
but if the buyers cannot receive and make use of the goods, the entire
effort is wasted, Prof. Das said.
Making sure that customers receive their orders in a timely manner,
and that they have a means of contacting the company with any questions
or concerns is essential to a working profit model. Therefore without
communication between client and provider, there will eventually be no
profit, Prof. Das said.