贝恩咨询分析方法-ProfitPools.ppt

1、Author: Dana Peck Reviewer: Michael Collins,Profit Pools,December 1998,Copyright 1998 Bain Orit Gadiesh and James L. Gilbert,5,Revenue vs. Profit Split,Truck Finance,Parts and Service,Body Manufacturing,and Truck Assembly,Chassis Manufacturing,and Sales,Truck Finance,Parts and Service,Body Manufactu

2、ring,and Truck Assembly,Chassis Manufacturing,and Sales,Revenue Split by Activity,Profit Split by Activity,$3,865MM,$600MM,0%,20%,40%,60%,80%,100%,Percent of Total,Source: PBIR Profile of the U.S. Truck Body Industry; R.L. Polk Registration Database; Literature Search; TEM Financials; Prior Bain PLP

3、 analysis (7/96); Bain estimates,The pattern of profit concentration in the truck manufacturing industry is very different from the pattern of revenue concentration.,Truck Manufacturing Business Example,6,Why Use Profit Pools?,Offer a view of the underlying industry structure Help illustrate the eco

4、nomic and competitive forces driving the industrys profit distribution Offer a different perspective on an industry Illustrate relationship between profit and revenues Highlights potential watchouts (choke points in the value chain) which can influence the profit flow in an industry,Illustrate the C

5、urrent State of the Industry,Provide a Competitive Advantage to Your Client,Help to Develop Innovative Strategies,Help companies see what their rivals dont see Foster the potential to dictate the terms of competition within the industry Keep companies abreast of changes in rapidly changing (turbulen

6、t) industries alert potential shifts in profit distribution along the value chain illustrate potential change in profit sources from new entrants,Help guide important decisions about a companys operation and strategy Encourage rethinking old decisions and pursuing counterintuitive initiatives to cre

7、ate and control profit pools Reduce the possibility of blind spots in a companys strategic vision reduce potential to overlook attractive profit building opportunities lesson potential to become trapped in areas of weak/ fading profitability Example applications,Companies that recognize the variabil

8、ity of profitability and can exploit the deepest pools will earn superior returns.,Source: Profit Pools: A Fresh Look at Strategy (May-June 1998): Orit Gadiesh and James L. Gilbert,7,How Profit Pools Illustrate the State of the Industry,The varying concentrations of profit along the value chain (kno

9、wn as the shape of the profit pool) reflect the competitive dynamics of a business profit concentrations result from the actions and interactions of companies and customers profit pools form in areas where barriers to competition exist profit pools exist in areas that have been overlooked by competi

10、tors Every market has an uneven distribution of profit between product categories, customer groups, geographic regions and/or distribution channels Profit pools are not stagnant as power shifts among the players in an industry (competitors, suppliers, and customers), the structure of the profit pool

11、 changes,There are many different sources of profit in any business,Profit pools provide a means to evaluate the competitive dynamics of an industry.,Source: Profit Pools: A Fresh Look at Strategy (May-June 1998): Orit Gadiesh and James L. Gilbert,8,Profit Pool Watchouts (Computer Industry Example),

12、Examples:,Be aware of “choke points” - particular business activities that control the flow of profits throughout an industry.,Impact:,Control of a choke point can influence the distribution of profits among competitors and more distant value-chain participants,Intels dominance of microprocessors Es

13、tablishment of an industry wide standard that all companies must now obey,Microsofts dominance of Windows Consolidation of control over the customer interface,*includes operating system and application software Source: Profit Pools: A Fresh Look at Strategy (May-June 1998): Orit Gadiesh and James L.

14、 Gilbert,Micro- processors,Other Components,Personal Computers,Software*,Peripherals,Services,9,Micro-,processors,Other Components,Personal Computers,Soft-,ware,Peripherals,Services,0%,10%,20%,30%,40%,Operating Margin,Share of Industry Revenue,Profit Pool Watchouts (Computer Industry Example Con.),*

15、includes operating system and application software Source: Profit Pools: A Fresh Look at Strategy (May-June 1998): Orit Gadiesh and James L. Gilbert,Analyzing the profit pool has enabled Dell to be profitable in the least profitable personal computers segment (see example),Although choke points exis

16、t in the computer industry, it is still possible for companies to create and leverage new profit pools within this industry.,PC Industry Profit Pool,100%,10,0%,5%,10%,15%,20%,25%,Operating Margin,The automotive industry encompasses many value-chain activities. The most profitable areas of the car bu

17、siness are not the ones that generate the biggest revenues.,Auto manufacturing,New car dealers,Used car dealers,Auto loans,Leasing,Gasoline,Auto insurance,Service repair,Aftermarket parts,Auto rental,Share of Industry Revenue,100%,U.S. Auto Industry Example,11,Key Questions to Help Develop Innovativ

18、e Strategies,Why have profit pools formed where they have? Are the forces that created those pools likely to change? Will new, more profitable business models emerge? How do some profit sources exert influence over others and shape competition? How do we gain a disproportionate share of industry pro

19、fits?,Building an understanding of profit pools puts strategic thinking on a firm footing and prompts the following questions:,Source: Profit Pools: A Fresh Look at Strategy (May-June 1998): Orit Gadiesh and James L. Gilbert,12,Agenda,Profit Pools Concept Applications Profit Pool Steps Client Exampl

20、e Key Takeaways,13,Applications (1 of 2),Analyzing profit pools allowed U-Haul to identify a large untapped source of profit in the low margin truck rental business seized the first mover advantage and entered accessory business at a low cost reduced prices (and profits) in core truck rental busines

21、s to attract customers for higher margin accessory business In anticipation of a potential reconfiguration of the profit pool from pharmacy-benefit managers (PBM), Merck and others vertically integrated the value chain and acquired PBMs insulated themselves from new entrants and protected their exis

22、ting sources of profits gained greater access to patient information increased the likelihood that the pool would evolve in a beneficial rather than destructive way,Companies can use their understanding of profit pools in different ways:,Identify New Sources of Profit,Chart Acquisition and Expansion

23、 Strategies,Examples,Source: Profit Pools: A Fresh Look at Strategy (May-June 1998): Orit Gadiesh and James L. Gilbert,14,Applications (2 of 2),Dell Computer Corp. utilizes the profit pool approach to evaluate which customers to pursue and which channels to use direct sales approach allows Dell to k

24、eep a portion of dealers profits for itself and to share the rest with customers through lower prices regular resegmentation of customer base enables them to identify the most profitable customers and react quickly to new sources of profit After recognizing that the industrys profit pool was driven

25、by the premium beer segments, Anheuser Bush refocused their strategy to expand their share of the premium segment gained dominance of the premium segment through increased marketing of premium brands and by managing the price differentials between premium and discount brands vertical integration int

26、o can production raised competitive barriers around the pool by cutting manufacturing and distribution cost,Develop Distribution Strategy,Guide Pricing, Product and Operating Decisions,The company that sees what others do not will be best prepared to capture a disproportionate share of industry prof

27、its,Source: Profit Pools: A Fresh Look at Strategy (May-June 1998): Orit Gadiesh and James L. Gilbert,15,Agenda,Profit Pools Concept Applications Profit Pool Steps Client Example Key Takeaways,16,Mapping a Profit Pool,Mapping a profit pool involves four steps.,Define the Pool,Determine the Size of t

28、he Pool,Estimate the Distribution of Profits,Reconcile the Estimates,Step 1:,Step 2:,Step 3:,Step 4:,Source: How to Map Your Industrys Profit Pool (May-June 1998); Orit Gadiesh and James L. Gilbert,17,Guidelines (Defining the Pool),Defining the pool involves identifying value chain activities releva

29、nt to the business.,Take a broad view of the value chain - look beyond traditional industry definitions Examine the industry from 3 perspectives client competitors customers Talk to industry players and analysis to uncover new or emerging business models Dont disaggregate activities more than necess

30、ary Consider parallels from other industries are there activities that could substitute for activities in this industry?,The way you define your profit pool is unlikely to coincide with any traditional industry definition,Source: How to Map Your Industrys Profit Pool (May-June 1998); Orit Gadiesh an

31、d James L. Gilbert,18,Guidelines (Determining the Size of the Pool),Determining the size of the pool involves developing a rough, but accurate baseline estimate based on the available data.,Take the easiest analytical routes available Focus on the largest components first large companies start with

32、the biggest players who account for a large portion of the industrys profits gauge the profits of the smaller players by adjusting the leaders margins to account for the smaller players competitive advantages or disadvantages add the profits together high volume products Consider building estimates

33、using two different methodologies (e.g. company level vs. product level) so you can compare answers to see if you are in the ball park range,Source: How to Map Your Industrys Profit Pool (May-June 1998); Orit Gadiesh and James L. Gilbert,19,Guidelines (Estimating the Distribution of Profits),Estimat

34、ing the profits for each value chain involves creative thinking.,Go where the data is (e.g. products, customers, channels, companies, or regions, etc.) use proxies if relevant data is unavailable Prioritize focus - look at client economics, then large pure players, large mixed players, then a sample

35、 of smaller players use the 80/20 rule - in most cases 20% of the companies constitute 80% of the revenues Shift between aggregation and disaggregation in analysis aggregations - use in industries where most of the players focus on one value chain activity “Pure players” disaggregation - you will ne

36、ed to disaggregate companys financial data if the industrys players are vertically integrated “mixed players”,Source: How to Map Your Industrys Profit Pool (May-June 1998); Orit Gadiesh and James L. Gilbert,20,Guidelines (Reconciling the Estimates),Developing final estimates of activity and total pr

37、ofits can be an iterative process.,Compare the estimate of total profit pools (top-down approach) with estimates calculated for each value chain activity (bottoms-up approach),Check assumptions and calculations if the numbers dont add up,Collect additional data if necessary,Resolve inconsistencies,S

38、ource: How to Map Your Industrys Profit Pool (May-June 1998); Orit Gadiesh and James L. Gilbert,21,Agenda,Profit Pools Concept Applications Profit Pool Steps Client Example Key Takeaways,22,Truck Manufacturing Business Example,Activities:,Performed By:,Provide parts for truck chassis and body Perfor

39、m preventative and emergency service on truck chassis and body,Build truck body to customer specs Prepare body for and manage assembly process Sell body to customer Deliver integrated unit to customer,Offer funds as loans for truck purchase Arrange loan and lease transactions,Sell chassis to/take or

40、der from customer Manage connection of chassis and TEM*,Build truck chassis according to customer specs Collect components from manufacturers,Chassis manufacturer Chassis dealer Independent garage or parts store,TEM,Chassis dealer Chassis manufacturer TEM,Chassis dealer Chassis manufacturer TEM,Chas

41、sis manufacturer,Notes: *Truck Equipment Manufacturers,The first step was to define the pool by identifying the value chain activities relevant to the business.,Severe Service Value Chain (Defining the Pool),23,Other,Freightliner,Navistar,Peterbilt,Sterling,Mack,$500-700MM,0%,20%,40%,60%,80%,100%,Es

42、timated Percent of Total Profit Pools,Severe Service Vehicle Profit Pool (Determining the Size of the Pool),Source: Bain analysis,Estimated profits from top 5 companies based on 10Ks and annual reports Performed 80/20 analysis to determine total profit pool assumed 20% of the companies constituted 8

43、0% of the profits estimated profits of remaining 20 smaller companies Reality checked estimates with rough industry calculations Estimated total profit pool around $500-$700MM based on: $3.9B industry revenues assumed average gross margins of 13%- 18%,Methodology,Truck Manufacturing Business Example

44、,A rough estimate of the total profit pool was built using overall profit estimates from the top 5 competitors.,24,Note: Operating Margin used as the measure of profitability Source: Company Financials; Analysts Reports; Company Interviews,Total,Industry,McNeilus,Heil,Leach,Knapheide,Omaha,Vactor,Ot

45、tawa,Advance,Rest of,Industry,7.1%,12.0%,9.0%,9.0%,8.6%,8.2%,6.6%,5.8%,3.0%,3.9%,0%,3%,5%,8%,10%,13%,Operating Margins for Body Companies,Profit estimates were generated for each activity based on the operating margins of the top industry players.,Truck Manufacturing Business Example,Example Activit

46、y: Body Manufacturing,Body Company Margins (Determining the Distribution of Profits for an Activity within a Value Chain),25,Other,Freightliner,Navistar,Peterbilt,Sterling,Mack,Truck Finance,Body Manufacturing,and Truck Assembly,Parts and Service,Chassis Manufacturing and Sales,Top Down,Bottoms Up,$

47、500-$700MM,$600MM,0%,20%,40%,60%,80%,100%,Estimated Percent of Total Profit Pools,Severe Service Vehicle Profit Pool (Reconciling the Estimates),Source: Bain analysis,Chassis + Parts R.L. Polk Registration Database; Literature Search; TEM Financials; Prior Bain PLP analysis (7/96); Bain estimates,Se

48、vere Service Vehicle Profit Map (1997),27,Dealer ownership would create access to high margin activities,Chassis manufacturing and after market parts are most profitable activities,High fragmentation and low profitability make body manufacturing unattractive,Body joint ventures attractive if lead to greater chassis or after market share,Dealers control access to high margin finance and parts and service,Forward integration into bodies has not occurred,Client should focus on gaining share in chassis manufacturing and/or capturing a great