Question

Why do firms seek to maximize profit, and what strategies do they use to do so? Are some of the strategies more effective under certain conditions?

Answer 1

It is all about cutting costs for businesses and raising profits. By optimizing either end any organization can do better. While some strategies like lead generation and site redesign can increase long haul profits, there are also things you can do to unlock the profit potential of your company without substantial funding. It's all about finding opportunities for change, making the necessary changes, and reaping the decisions' rewards.

It is very easy to change the pricing strategy in favor of a bigger profit margin, but it is still very successful. It is never, however, a simple task because the smallest changes in prices can have dramatic effects on conversion levels. You have to research and consider each single variable that gets hit with a simple change in price.

Take a look for example at Starbucks. A one per cent rise in the price of such drinks resulted in a remarkable 11 per cent increase in earnings. How did they get this done? They concentrated on the right consumers, the right market, differentiation of goods and successful price communication. Instead than increase the price of anything, they concentrated only on different products, sizes and places. By doing so, they benefited from strong customer awareness and demand for unique beverages.

Despite today's digitally linked environment outsourcing isn't a novel phenomenon. Let's face it, it's expensive to have long term jobs. It also restricts your choices when it comes to filling important positions within your business. In comparison, outsourcing lets you tap into the global talent pool to mobilize your business. Also, you should be paying attention to potential outsourcing downsides. For example, it isn't easy to secure transparency for any remote worker without a consistent monitoring and communication framework. Nonetheless, if you manage to get ahold of reputable and knowledgeable experts, you've got a highly productive squad that can optimize your long-term income.

Through automation, you can set up a simplified "machine" that fulfills your digital marketing goals in a phase-wise way. For example, with a single site for scheduling, the content that you post on your blog can be shared automatically via social media and your mailing list. By contrast, an autoresponder tool automatically sends pre-constructed emails based on triggers such as a new follower, an abandoned cart, or a direct inquiry. Finally, the success of a business depends on how much effort each and every individual is put through. There are a ton of ways you can boost the productivity of everyone, but it all boils down to motivation, organization and a more efficient working environment.