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The old adage, drive for more sales to more profit might be true in some cases, but often does not apply and is a haphazard strategy of increasing profitability.

Closer analysis could reveal that sales, which generate the most effort, deliver the lowest margins. While volume helps absorb fixed costs, the margins have not proportionally increased.

Without a clear business strategy in place, an established company can only expect mediocre returns. It is companies, which can identify what they do and focus on their uniqueness, will distinguish them from the competition, as opposed to mirroring their competitors. The essence of strategic positioning is to choose activities that are different from their rivals.

The following questions should be answered:

Sometimes it is good to review the history of an established company and find out what the original vision was of the founder and whether it is still valid today.

Even companies with a relatively limited history should adopt the same principles and re-examine the original strategy to see if it still applies. This sort of thinking can be challenging, but allows an organisation to possibly rediscover its individuality.

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More sales, more profit?

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