The True Meaning of Profit, Gross Margin, Market, etc.
Teach your team to understand them properly
Strategy — map it our yourself
Teach your team to understand them properly
We habitually evaluate companies based on their financial results. But these outcomes are nothing more than the outputs of their work, but they don’t disclose the ways they were obtained. That’s why they rarely demonstrate the ability of the business to repeat its success in the future.
But many common business indicators and notions may be expressed through customer needs and customer values.
Profit is a symbolic “bonus” paid to management and the board by customers for creating exceptional values for them.
Gross margin reflects an ability to offer customers more value than rivals.
Competitors are companies proposing values comparable to ours to our customers.
Assets are the resources a company uses to create value.
A market is a set of consumers with common needs.
Competitive advantage is an ability to suggest more value to customers than rivals.
Of course, these notions are symbolic and can’…