The Profit Zone

How Strategic Business Design Will Lead You to Tomorrow's Profits

Adrian J. Slywotzky, David J. Morrison, Bob Andelman

Publisher: Wiley, 1998, 342 pages

ISBN: 0-471-98391-8

Keywords: Strategy

Last modified: Aug. 4, 2021, 7:11 p.m.

Why do some companies create sustained, superior profits year after year? Why are they always far ahead of competitors in discovering the ever-changing profit zones of their industry?

Why do others languich as their traditional way of doing business turns into a no-profit zone?

The Profit Zone provides the answers. It is a brilliant, original, and practical explanation of how and why high profit happens.

It reveals the profit strategies of twelve of today's great success stories — a group of companies and executives that have created over $700 billion in market value for their shareholders. More importantly, it shows the lessons that can be learned from the business design of these companies — adaptations that enable them to always be several steps ahead of competitors in meeting customer priorities. Some examples:

  • The profit lessons any product company can learn from Jack Welch's "sell the solution, not just the box" business design at GE.
  • How Nicolas Hayek's creation of a low-end, profitable firewall brand — the Swatch — protects the rich profitability of the high-end products at his company.
  • How Roberto Goizueta's decision that the consumer was not the only important customer created the basis for Coke's triumphs over Pepsi.
  • Why Charles Schwab's switchboard business design created a new way of doing business for millions of new customers in financial services.
  • How managers of small and mid-size businesses such as Madden Communications and middle managers in large companies have used Slywotzky and Morrison's ideas to move their companies into the profit zone.

These and other examples provide a unique look at the profit models that created these patterns of success. The Profit Zone is the first book to analyze the mechanisms of high profits and show how these profit models can be learned and adapted by any company in any industry. It also provides a unique tool kit — "The Profit Zone Handbook" — for systematically applying these ideas at your company.

  • Part One: Succeding in the Changing World of Business
    1. Market Share Is Dead
    2. Customer-Centric Business Design
    3. How Profit Happens
  • Part Two: The Reinventors and How They Succeeded
    1. Jack Welch: The Customer Solutions Business Design
    2. The Story of Three Managers: Reinvention for the Rest of Us
    3. Nicolas G. Hayek: The Product Pyramid Business Design
    4. Roberto Goizueta: The Manage-the-Value-Chain Business Design
    5. Charles Schwab: The Switchboard Business Design
    6. Andrew Grove: The Two Steps Ahead Business Design
    7. Michael Eisner: The Profit Multiplier Business Design
    8. George Hatsopoulos: The Spin-Out Business Design
    9. Percy Barnevik: The Global-Netwok-of-Specialists Business Design
    10. Bill Gates: The Create-the-Standard Business Design
  • Part Three: The Profit Zone Handbook
    1. How Business Design Innovation Creates the Profit Zone
    2. The Profit Zone Handbook


The Profit Zone

Reviewed by Roland Buresund

Very Good ******** (8 out of 10)

Last modified: Nov. 9, 2007, 4:28 p.m.

An interesting book about the application of strategy to make something real.

As is usual today, a lot of focus is on the customers. Why must this subject always be breached, isn't it a given nowadays?

Anyway, the coverage of Profit Models and their implications make this a book that you should have read. It is sometimes a bit confusing, and is probably better taken in a piece at a time


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