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Profit Maximization

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 Profit maximization

(Published in: Business Perspective Vol.9, Jan – June: 41 – 49)

Abstract
To stay competitive by creating higher value for consumers firms are in constant search for strategies and tactics that
will maximize profit. Profits can be maximized by increasing per unit revenue, decreasing unit cost or a mix of both.
This study has identified ten different approaches: Innovation, Brand Image, Customization – Mass customization,
Customer collaboration, Long tail effect, Operational excellence, Outsourcing, Value engineering, Moving away from
unprofitable customers and Reducing quality. Out of these approaches a manager should select the one that fits the
situation best. Maximizing profit by reducing quality should be avoided as it threatens long term survival.

Key words: Innovation, Customization, Outsourcing, Operational excellence and Brand image

Introduction

To create higher value for the shareholders, executives are under constant pressure to
deliver higher profit.

In economics, profit maximization is the process by which a firm determines the price and
output level that returns the highest profit. There are several approaches to this problem.
The total revenue minus total cost method relies on the fact that profit equals revenue
minus cost, and the marginal revenue (MR) less marginal cost (MC) method is based on
the fact that total profit in a perfectly competitive market reaches its maximum point
where marginal revenue equals marginal cost.

A profit-maximizing firm will produce more output when marginal revenue is more than
the marginal cost and less output when marginal revenue is less than the marginal cost. If
MR = MC, however, the firm has no incentive to produce either more or less output. The
firm's profits are maximized at the level of output at which MR = MC.

A firm can maximize profit either by increasing per unit revenue or decreasing per unit
cost or doing both simultaneously. This study has identified ten different approaches to
achieve profit maximization: Innovation, Brand Image, Customization – Mass
customization, Customer collaboration, Long tail effect, Operational excellence,
Outsourcing, Value engineering, Moving away from unprofitable customers and Reducing

Electronic copy available at: http://ssrn.com/abstract=1482609

quality. Some of these are targeted to increase per unit revenue; some are focused on per
unit cost reduction, while still others can be classified somewhere in between.

1. Innovation

Innovation is the successful exploitation of new ideas. A basic understanding of the

subject is essential for all business leaders whatever their current or intended product or
service. Innovation should not be confused with technology. Innovation is the only way to
stay ahead of the competition. Exploited properly it will improve business survivability
and lead to increased profits.

Innovation can basically be of three types: Product innovation (e.g. new goods or services
put on sale); Process innovation, which changes the way a given good or service is
produced or delivered within the firm or across a supply chain; and Behavioural
innovation, when an organizational routine is replaced with new ones.

Quite often, the innovation turns out to be a mix of all three “pure” categories, as with the
case of the introduction of a new product that require new productive competences and
changes in the organization.

Furthermore, what is a product innovation for a supplier can be a process innovation for a
user, as with the case of a new machine which revolutionizes the process of manufacturing
and may deliver better quality at a lower cost. In this case, investment is the means to
spread innovation across the economy. Besides technology, marketing, finance,
organization all can be sources and multipliers of innovation.

An innovation can be radical – like KODAK new product development to fight Fuji or
incremental – such as Toyota Kaizen, TQM and JIT. As Christensen (1997) has explained
an innovation can be disruptive or non-disruptive. Disruptive innovations are those
products or systems that create entirely new markets. What minicomputers did to
mainframe or PCs to the minis, were disruptive innovations. Similarly, the effect of
mobile phones on landlines is disruptive.

Market dynamics allow a firm to charge premium price for an innovative product or
service because consumers perceive higher value than competitive offers. An innovative

Electronic copy available at: http://ssrn.com/abstract=1482609

product also helps in attracting more consumers. Firms 3M and Zara qualify in this
category.

Innovations could be in generation and delivery of services, IT applications, warehouse

management, supply chain management or in any other business processes. Benihana and
100 Yen Sushi restaurants could create a space for themselves in an overcrowded ‘out of
home eating’ market in USA due to their innovative style of service delivery. Customers
patronized Benihana because they liked the innovative idea of watching their food being
cooked in front of their eyes at their respective tables by highly skilled chef to the
perfection of a well choreographed piece of dance. The revolving table at Sushi restaurants
together with standard menu helped quick turnaround and kept prices down.

The use of Internet, digital tools and software are completely redefining the way
businesses are run particularly in photography, book distribution, exchange of ideas
among similar interest groups of people, movies, music and many others. Firms
integrating information technology into their businesses stand to gain by increasing per
unit revenue or decreasing per unit cost – maximizing profit.

Another disruptive innovation, RFID – radio frequency identification device – gives users
complete control over the movement of goods from suppliers to consumers and offers
possibility to eliminate latency or delays in the whole process. For the firm this has the
potential to reduce cycle times, make more responsive to customer demands and thus may
induce more profit.

Even cross docking and vendor managed inventory are innovative processes that gave an
competitive edge to Wal-Mart in mass merchandising market.

2. Brand Image

Senior executives increasingly recognize the importance of their company’s brands in

driving customer loyalty, price premiums, revenue growth and, consequently, enhanced
shareholder value. Executives are pushing for not only stronger brands but are also
demanding that they be built and maintained better, faster and cheaper. This demand
presents a real challenge.

In this competitive world consumers are displaying ‘crossover’ buying behaviour and
producers are facing ‘cross category’ competition. In the product and service space

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commoditization and convergence are dominant and choices are exploding – resulting in
decreased level of customer loyalty. Brands are exposed to increasing number of touch
points, consumers are more aware, positive and negative experiences with the brand are
quickly getting converted into word of mouth referrals. In this environment some stellar
brands have flourished, like LG, Park Avenue, Lux, Colgate, Maruti - but many more such
as Kelvinator, Stencil, Hamam, Babool, Ambassador – have fallen on hard times.

Consumer-based brand equity goes far beyond just the trigger communication. It
comprises the long-term market benefits for the company from customer satisfaction and
brand loyalty perspectives and offers opportunity to earn higher profit by unlocking the
value of the brand.

3. Customization – Mass Customization

In this competitive environment, Internet and information technology have shrunk

distances, overcome the difference in time zones, eliminated the advantages of scale of
operations, broken down the barriers and, the best of these, propelled the “market of one”
– mass customization.

No company can ignore the present day mantra of customer satisfaction ‘I want what I
want’. For firms it is not sufficient to pursue single point focus. Successful firms have to
harmonize focus on multiple issues as customers are more demanding and are reasonably
sure that some supplier will be able to match their expectations.

Mass Customization is defined by Bain & Company (www.bain.com) as "the large-scale

production of personalized goods and services. To succeed at it, companies must harness
technologies that revamp their speed, flexibility and efficiency at minimum expense.
Combined with organizational changes to focus firms on the unique needs of very small
customer segments, these technologies help companies affordably deliver custom versions
of their offerings to profitable niche markets."

According to a survey of product and service companies in North America and Europe
conducted by Booz Allen Hamilton (Leslie Moeller, Matthew Egol, and Karla Martin,
2003), firms that can more effectively balance the values that customization brings to their
customers with the complexity costs it can impose, generate organic sales growth and
profit margins significantly higher than their industry average.

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The study, which benchmarked business units with sales from $1 billion to more than $20
billion at 50 companies, found striking differences between companies that adapted and
aligned their customer strategies and fulfillment operations, and those that constructed
more ad hoc responses to customer demands. The research encompassed such industries as
consumer goods, chemicals, telecommunications, media, and financial services. The study
revealed a two-to-one performance gap between “smart customizers” and “simple
customizers.”

Later Keith Oliver, Leslie H. Moeller, and Bill Lakenan (2004) in the article ‘Smart
Customization: Profitable Growth Through Tailored Business Streams’ cautioned that few
companies are successfully trading off the values of mass customization with the cost of
complexities that it imposes. Companies should be careful in deciding what will
differentiate from competitors, do customers perceive extra value in them, can the extra
cost be justified, and may be it is necessary to realign delivery processes for different
segments.

Consider LEGO factory, a very advanced toolkit for user (kid) innovation and co-design.
With this new business unit, Lego combines its original mass customization pilots, which
were able to pick an individual assortment of Lego bricks according to one customer's
order, with its strong software and interaction skills. Children can not only create their
own unique designs, and order the corresponding bricks in a customized set with the help
of their father's credit card, but can also submit these designs to the company. Lego may
then produce an extraordinary design as a mass product for other children as well.

Amazon.com offers readers the possibility to customize books from various publishers.
Building on its "Search Inside the Book" technology, which allows customers to search
the complete interior text of hundreds of thousands of books, the company is currently
developing two new programs that will enable customers to purchase online access to any
page, section, or chapter of a book, as well as the book in its entirety.

Amazon thus is finally offering on a retail level what innovative publishers like MetaText,
Cinado.com, Symposion or Addison Wesley have done since years: Providing readers the
opportunity to purchase just the pages they really need. What might be not a good idea for
novels, is great for edited books or also many trade books, where often the first and last
chapter are giving you 80% of the information you want to know.

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Adidas Mi (http://www.miadidas.com): Six shoes (running, soccer, tennis, indoor,
basketball) with three areas of customization; fit (length and width of each foot),
performance (outsole and midsole options and seasonal upper materials) and design
(choosing from over 100 color combinations and embroidered lettering). All of which has
to be done in person at select Adidas store locations.

Similarly, Nike iD (http://www.nikeid.com/), Puma Mongolian BBQ (www.puma.com/)

and Land's End (http://landsend.com) offer customers fairly high degree of customization
even at a high volume of sale.

4. Customer collaboration

To deliver mass customized products the vendor either exercises full control on the
delivery process or shares the control with customers. In the latter instance the customer
can play any one of the two roles: Co-producer or Innovator.

Consider Asian Paints. Customer needs to visit one of the showrooms with a sample shade
of the paint that she wishes to buy. The vendor trained person will mix the pastel colour
base paint and the correct amount of tint of colour to produce the desired shade. Customer
has no role to play except approve the shade if she finds acceptable.

In contrast to this situation, in a mall the consumer herself decides the item, brand,
quantity, quality, picks them up and passes through the payment aisle acting as a co-
producer for the service. Similar situation is witnessed at petrol pumps, buffet lunch and
salad bars. By co-producing the service the customers are helping the vendor to lower the
cost of delivery.

Now consider toolkits for user innovation and design. This innovative method of new
product development (NDP) shifts the design task to the customer by making use of recent
developments in IT, media, and production technologies. The customer, in turn, gets a
product that perfectly suits his/her needs. This new approach challenges the time-
consuming and costly traditional approach of screening the market for new product needs
which are then converted into novel or adapted products.

Toolkits allow producers to outsource certain design tasks to customers. In this way,
products can be developed much more quickly and at lower cost. Customers, in turn, get
exactly what they want – a custom product that suits their individual needs precisely. This
approach allows manufacturers to serve ‘markets of one’ and to handle large and small

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customers in the same way. This new approach has only been adopted in few industries so
far.

Peter A. Gloor and Scott M. Cooper (2007) observed that throughout history many
valuable innovations have come not by the sole effort of a bright mind but by ‘collective
efforts of team of people’. Often individuals in these groups are devoted to the idea and to
the collaborative process of working with others toward a common goal. They know that
their reward might be nothing more than the positive feeling of success at the end. They do
not work for financial gain but rather for the challenge to solve a problem. The resulting
collaboration benefits those involved and sometimes the society as a whole. The swarming
of bees is an archetype this business. Best manifestation of this new principle of Swarm
Creativity is seen in development of World Wide Web and Linux.

Firms such as Microsoft has been able to reduce cost of development and testing and
reduce the time to market by involving large number of users (beta sites) to volunteer for
testing software during its pre-launch stage.

5. Long tail effect

Product variety is an important component of consumer welfare, yet many markets have
historically been dominated by a small number of best-selling products. The Pareto
Principle, also known as the 80/20 rule, describes this common pattern of sales
concentration. However, by greatly lowering search costs, information technology in
general and Internet markets in particular have the potential to substantially increase the
collective share of niche products, thereby creating a longer tail in the distribution of sales.

The trend was first detected by Chris Anderson (2006) in his book The Long Tail: Why
the Future of Business is Selling Less of More. The 80/20 rule applies to all businesses. A
manufacturer may have eighty percent of retailers contributing very little; Music company
may have a large number of songs that were favourites at one point of time but almost no
demand today; Book publishers and distributors may face similar dilemma with many
titles and so on. It is not that there is no demand for such products but the demands are so
small that it is expensive to carry in the physical formats of selling – largely constrained

7
by limitations of shelf space, lack attention of the seller and high cost of slow moving
inventory.

The "long-tail effect" is all about profitable niche businesses replacing the traditional mass
market. Internet and cost effective options of search and storage have reduced the
dependency on a few blockbuster movies, best selling books or hot favourite songs for
making profit. Now, due to amazingly low cost searching power of the Amazons and
Googles, the entire inventory - mainly comprising the previously ignored niche titles - is
available to choose from. And because there are so many of them, collectively they may
be worth more than the blockbusters themselves.

The "long-tail phenomenon" is well documented: Amazon.com makes significant profits

selling many low-volume books. Long-tail enthusiasts claim that low-demand books, CDs,
and movies, which are not available in brick-and-mortar stores, will collectively take up a
majority share of the market over time.

6. Operational excellence

Operational Excellence results in world-class quality, productivity and delivery of goods

and services to customers, at prices that are competitive. In today's marketplace where
forces such as technological innovation, outsourcing, e-business and global competition
are prevalent, it is becoming increasingly important for companies pursue operational
excellence.

Operational excellence is demonstrated by results that reflect sustained improvement over

time, improvement in all areas of importance, and performance at a level that is at, or
superior to, ‘best in class’ organizations. Common areas of importance for a cost center
are safety, quality, people, and cost. Common segments within each performance area
include employee groups, facilities, departments, and external customer types.

It can be achieved by benchmarking processes of the firm with the best in the class
processes in companies across all industries. Xerox regained the lost market share in
photocopying business by achieving operational excellence through extensive
benchmarking of 241 different processes. They had tried unsuccessfully to match the cost
of producing small copiers of Canon by following the path of value engineering. Success
could not be achieved because the processes were not world class and were inflexible.

8
Firms have to demonstrate operational excellence in all processes that are directly or
indirectly creating and delivering value for the customers. Manufacturing excellence may
symbolize lean manufacturing, implementing TQM, Activity Based Costing, Focused
factory, Using enterprise software, Implementing standard processes and similar
initiatives. Toyota, GM, Flextronics are representatives of this class.

For excellence in service delivery firms can learn a lesson or two by understanding the
processes of Shouldice Hospital, Benihana Restaurant, Mumbai Dabbawallah, Southwest
Airlines and Starbucks.

Operational excellence in supply chain management is to turn it into a value chain. It is

more than simply boosting efficiency. The cornerstone of a value chain transformation is
establishing a differentiated customer offering. By serving customers or customer
segments based on their unique requirements and aligning the value chain accordingly,
companies are able to increase efficiency and, ultimately, take the enterprise to another
level of performance and profitability. Dell Computers have perfected the art of value
chain management for the personal computer industry. Failure to transform into a value
chain had forced IBM – the pioneer in the personal computer industry – to lose control on
the value creation and finally exit the industry.

Motivated and empowered employees are corner stones of operational excellence in

human resource management area.

Business strategies that will defeat the competition must be supported by excellence in
execution at every opportunity. Whether the business strategy is to win through customer
intimacy, through product/service innovation or through low prices, the enterprise’s
business processes must consistently meet the customer’s requirements with the most
effective use of resources.

7. Outsourcing

Outsourcing is the act of moving some of firm’s internal activities and decision
responsibilities to outside providers. A value chain consists of many varied activities. A
firm may not have competencies in all of them. Any activity that is not a part of firm’s
core competency can be outsourced. In present business scenario there are many firms
providing specialized services. Hence it is possible to outsource. Even large firms like
Nike do not own any manufacturing facility. They carry out functions such as product

9
development, brand building, R&D & customer service themselves, and rest is outsourced.
Dell Computers also follow similar business model.

The reasons to outsource vary greatly. Other than cost or investment reduction and
generating cash by transferring assets, the reason to outsource could be driven by many
other non finance considerations. These are: Requirement of the organization to enhance
flexibility and effectiveness, Get access to some improved processes, Increase revenue,
and employee need driven.

Some of the motivations of outsourcing are: Economies of scale, Risk pooling, Reduced
capital investment, Focus on core competency and Increased flexibility. Major risks are
Loss of competitive knowledge and Conflicting objectives.

The outsourcing partner should be chosen such that the activity to be outsourced must be
the partner’s core competency. Only such a combination holds the potential to reduce cost
– maximize profit.

8. Value Engineering

Value engineering is an approach to productivity improvement that attempts to increase

the value obtained by a customer of a product by offering the same level of functionality at
a lower cost. Value engineering is sometimes used to apply to this process of cost
reduction prior to manufacture, while "value analysis" applies the process to products
currently being manufactured.

Both attempt to eliminate costs that do not contribute to the value and performance of the
product (or service, but the approach is more common in manufacturing).

VE originated in General Electric (under Lawrence Miles) during the Second World War.
They were seeking ways to make the most efficient use of war-limited funds and raw
materials. They found in most cases alternative materials and processes performed at least
as well and often better in terms of both specification and cost. This led them to formalise
the approach and devise a team-oriented technique that determines the 'value' of each part
and each product. Value engineering, thus, critically examines the contribution made to
product value by each feature of a design. It then looks to deliver the same contribution at
lower cost.

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VE is defined as "an analysis of the functions of a program, project, system, product, part
of equipment, building, facility, service, or supply of an executive agency, performed by
qualified agency or contractor personnel, directed at improving performance, reliability,
quality, safety, and life cycle costs."

9. Moving away from unprofitable customers - Life Time Value (LTV) of

customers

Not all customers are created equal. Twenty percent of customers often provide eighty
percent of a firm’s profits. The firm breaks even—or loses money—on the rest. The best
usage of customer relationship management (CRM) is to enhance the experience for
profitable customers, and bring down costs by automating unprofitable ones. This requires
an enterprise-wide commitment to sharing customer data, and the reinvention of how
every department in the company interacts with customers.

A number of leading firms believe they've found a Competitive Advantage – Focus on

profitable customers. And move away from unprofitable customers. Selden and Colvin
(2002) have shown that truly customer-centric companies--including Dell Computer,
Toronto-based Royal Bank of Canada, Fidelity Investments, and Canada's Hudson Bay
Co.--are getting a grip on their customer portfolio and managing it to lengthen their lead
over competitors. Firms could not focus on their profitable customers earlier because until
recently trying to calculate the profitability of individual customers or even customer
segments was too hard an information technology task for big companies to handle. Now
the technology, which is getting more powerful and less expensive by the day, is finally up
to the job. Here's a mind-boggling fact: Royal Bank calculates the profitability of every
one of its ten million customers every month.

Customer value management is managing each customer relationship with the goal of
achieving maximum lifetime profit from the entire customer base. Customer value
management enables companies to take full advantage of the economics of loyalty by
increasing retention, reducing risk, and amortizing acquisition costs over a longer and
more profitable period of engagement. This is more applicable for firms operating in
mature markets.

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A firm that can manage to move away from unprofitable customers will improve its
bottom line. The resources thus freed up can be utilized to build and nurture value
enhancing relationship with profitable customers.

10. Reducing quality

The insatiable greed for maximizing profit gets easily manifested into strategies leading to
cutting cost. Managers possess better clarity about cutting cost than increasing revenue.
They are more confident that their cost cutting strategies will yield results than their
revenue increasing strategies. Often too much of cost saving may lead to decline in
product performance, non conformance to stated specifications and reduced reliability –
render them unfit for use.

The Pulitzer Prize–winning historian Barbara Tuchman asserted in her article ‘The
Decline of Quality’ in the New York Times Magazine (Nov 1980) that the quality of
civilization was going downhill. Mass production had rendered the devices and luxuries of
the good life — furniture, watches, clothes, toys — more plentiful than ever. But these
products were not as durable, as reliable, or as pleasing as their handmade pre-industrial
counterparts. Her article was fiercely passionate.

After investments made during Quality decade of 80s it appeared that quality of products
will keep on improving and quality of life will get better and better. American producers
initially faced competition from high quality Japanese firms followed by cheap Chinese
counterpart. Today companies in industrialized countries face tough competition from
low-wage countries and high price-cutting pressure from global retailers. For the past few
years, it has appeared that U.S. corporations are once again employing strategies that
emphasize short-term gains from the production of cheaply made, junky products. Kitchen
appliances, power tools, cell phones, computer printers, DVD players, toys, and many
other consumer goods are increasingly conceived and sold as disposable commodities.
Although these products have more features and capabilities every year, their durability
and longevity are rapidly dwindling. This may also be called planned obsolescence –
products are designed such that they need to be replaced quickly.

There is an evidence of declining product quality. American Customer Satisfaction Index

(ACSI) conducted every year since 1994 shows that over all satisfaction index of

12
manufactured products have held steady over time. But exceptional companies such as
AT&T (7.9%), 1-800-FLOWERS.COM (11.6%), Amazon.com (3.6%), AOL LLC
(32.1%), Apple Computers (7.8%), Ask.com (14.5%), AT & T Mobility (7.9%),
barnesandnoble.com (14.3%), Best Buy (5.6%), Dell (8.3%), Dominos (11.9%), E*Trade
(12.1%), Hyundai Motors(23.5%) skew the results. If these companies are taken out of the
list then the over satisfaction rating has declined.

Even most revered firms could not show improvement on the customer satisfaction front.
There are many examples: Samsung (-4.1%), American Airlines (-14.3%), AT & T (-
17.6%), Delta Airlines (-23.4%), HP – Compaq (-7.7%), NIKE (-12.2%), United Airlines
(-21.1%), Home Depot (-6.7%) and Time Warner Cable (-7.9%). (A full table of company
data can be found at www.theacsi.org.)

In the end, only one conclusion seems to fit: In every product category, a few good brands
continue to improve their durability and reliability. The good get better and the rest get
worse.

One may find that shorter warranty periods, rising rate of product returns, increasing
revenues from post warranty services, easy acceptance of extended warranties all seem to
suggest, though without valid evidence, that consumers’ tolerance level towards poor
quality is also rising.

Other than blatantly copying a successful product – which is outright unethical and no
firm has succeeded in the long run - some of the tactics firms are surreptitiously
employing to deceive consumers on quality are:

1. Create strong brand pull, reduce quality gradually while maintaining same
price.

2. Remove or reduce the quantity of the costliest component or replace it with

cheaper one, even if it reduces functionality.

3. Limit the function of the product or split in two different products.

4. Discontinue the fastest selling model. Replace it with almost similar model
which is less costly to produce.

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Has quality really declined? Are firms using such dubious tactics? Evidences are mostly
anecdotal. But these have been collected over past five years by asking following three
questions to consumers, mostly housewives, who are regular repeat buyers of household
products:

1. Can you name some brands that you have been using for more than two
years and buy replenishment stocks regularly?

2. Do you think the quality is consistent?

3. If the quality is on the decline, what could be the reason?

Well known brands of liquid to clean floor and toilet no longer give shine; detergents
leave woolen garments very hard, for fluffy feeling another product is to be used;
shampoos are devoid of conditioners; incense sticks do not spread fragrance also they burn
out quickly; perfumes leave stains on clothes, particularly white clothes; naphthalene balls
leave scars on woolens; and so on.

Sometime back a well known brand of glucose biscuit increased the price of the pack of
100 gms from Rs. 10 to Rs. 11 – this is fine so long the brand value can sustain the market
share. But recently they reduced the quantity from 100 gms to 90 gms; examples are
many.

Wristwatches and clocks do not last for more than few years; window air conditioners
need refilling of refrigerant gas every year because the copper tubes used are so thin that
they develop cracks; timing chain in a car wear out faster because these are no longer
made of steel; and so on.

A prominent brand of footwear manufacturer often withdraws a highly successful fast

selling design and replaces it with almost similar design. Critical comparison may reveal
that metal buckles have been replaced by Velcro straps, leather has been replaced by
synthetic material, the bounce in the sole has vanished – all focused on reducing cost; such
examples are abundant.

There is no argument over the fact that reducing quality is not a sustainable tactic for
profit maximization, but still firms follow it. In the short run such tactic can shore up the

14
 bottom line but if the firm wishes to be around for longer period implementing such a
tactic may threaten the very existence of the brand and perhaps the firm.

Conclusion

Managers have many options to maximize profit. Some of these are directed to enhancing
per unit revenue, some enable to cut per unit cost, while still others focus on mixing the
two. The type of product or service, extent of market presence, stages of product life cycle,
competitive environment and firm’s internal capabilities will determine which option to
exercise.

References

Anderson, Chris (2006). The Long Tail: Why the Future of Business is Selling Less of
More, Hyperion

Clayton Christensen (1997). The Innovator’s Dilemma: When New Technologies Cause
Great Firms to Fail, Harvard Business School Press

Gloor, Peter A. and Cooper, Scott M. (2007). “The New Principles of a Swarm Business,”
MIT Sloan Management Review, 48(3), 81 – 84.

Keith Oliver, Leslie H. Moeller, and Bill Lakenan (2004). “Smart Customization:
Profitable Growth Through Tailored Business Streams” Strategy + Business, Spring Issue
(http://www.strategy-business.com/press/article/04104?pg=all)
Leslie Moeller, Matthew Egol, and Karla Martin (2003). “Smart Customization: Profitable
Growth Through Tailored Business Streams,” Strategy + Business, Resilience Report,
18th Nov

(http://www.strategy-business.com/resiliencereport/resilience/rr00001)
Selden, Larry and Colvin, Geoffrey (2002). “Will This Customer Sink Your Stock?

Here's the newest way to grab competitive advantage: Figure out how profitable your
customers really are,” Fortune, September
(http://money.cnn.com/magazines/fortune/fortune_archive/2002/09/30/329272/index.htm)

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