Is sustainable margin improvement possible in a post-GFC environment..?

Margin improvement in a highly competitive environment is not something that comes easily. Recently you will have heard most large businesses complaining about margin erosion, caused by a variety of reasons. These companies play that card publicly but internally they are driving a margin improvement strategy that if successful will deliver superior returns.

Below is an example of a methodology that may assist in the development of a plan for improving margins in your business;

1)      Focus – Consider broad scope and the bigger picture

i.      Holistic approach

ii.      Challenge the status quo

iii.      New vision and mindset

iv.      Leverage insight from others

2)      Mindset – Organisational culture and behaviours that seek improvement

i.      Drive accountability across all levels and areas

ii.      Establish a common language

iii.      Link performance management to strategic direction and margin improvement

3)      Process – Processes / Tools to continuously identify margin opportunities

i.      Transparent and challenging processes

ii.      Periodically deployed approaches to rapidly diagnose potential opportunities

iii.      Continuous pipeline

Other considerations for your business might be;

  • Can you extract further value from your customer base?
  • What else? / Where else? / Referrals / Partnerships
  • An example of this is Wesfarmers – Coles – now selling car insurance!
  • Where can savings be realised in the process?
  • Conduct a cost review and identify savings targets.
  • This is what your clients are doing to your business, engaging procurement specialists to drive your margin to its lowest possible point.
  • Are there any direct or indirect government incentives that may be tapped into?

If you are being constantly being squeezed by your clients to reduce pricing, or are looking for some assistance Call Gatti Consulting for an initial free discussion.

We can help you with sustainable margin improvement in order to advance your businesses performance and profitability.