the pc industry’s profit pool
DESCRIPTION
THE PC INDUSTRY’S PROFIT POOL. 40%. The value chain for the PC industry includes six key activities; the profitability of the activities varies widely. Manufacturers compete in the largest but least-profitable segment of the chain. 30. 20. operating margin. 10. 0. 100%. 0. peripherals. - PowerPoint PPT PresentationTRANSCRIPT
THE PC INDUSTRY’S PROFIT POOL
40%
30
20
10
0
0 100%
Share of Industry Revenue
opera
ting m
arg
in
microprocessors
other componentspersonal computers
software
peripherals
services
The value chain for the PC industry includes six key activities; the profitability of the activities varies widely. Manufacturers compete in the largest but least-profitable segment of the chain.
source: Harvard Business Review, May-June 1998
THE U.S. AUTO INDUSTRY’S PROFIT POOL
25%
15
10
5
0
0100%
Share of Industry Revenue
opera
ting m
arg
in
auto manufacturing
new car dealersused car dealers
auto loans
auto insurance
aftermarket partssource: Harvard Business Review, May-June 1998
20
leasing
warranty
gasolineservice repair
auto rental
The automotive industry encompasses many value-chain activities. The way that profits and revenues are distributed among these activities varies greatly. The most profitable areas of the car business are not the ones that generate the biggest revenues.
Profit Pools: Company Examples
Companies
Automakers
U-Haul
Elevators (OTIS)
Iomega
Polaroid
Core Business
Auto manufacturing
Truck Rental
Elevator Manufacturing
Zip Drives
Instant Photography Cameras
Sources of Highest ROI
Leasing, insurance, service.
Packing materials, storage
Service
Zip Disks; Storage
Film
