If your company's strategy is focused primarily on selling higher margin products, you are probably not maximizing profitability and Return on Assets (ROA). Too often, companies target the wrong products with their marketing programs because the information they use to analyze product profitability is incomplete.
To optimize product mix, companies need to measure and control how fast each product delivers profit to the business and then prioritize the products that generate cash the fastest. Lower margin products that can be manufactured quickly may in fact be more profitable than those which have higher margins but are slower to produce.
- Compare profitability, cash contribution and ROA — in addition to revenue and margin — at the individual product level
- Identify the best products for market share growth initiatives
- Discover substitutes for similar, lower profit-per-minute products
- Track cash gains resulting from product mix modification, isolating the effects of price, volume and fluctuating cost changes
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