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THE PC INDUSTRY’S PROFIT POOL

THE PC INDUSTRY’S PROFIT POOL. 40%. The value chain for the PC industry includes six key activities; the profitability of the activities varies widely. Manufacturers compete in the largest but least-profitable segment of the chain. 30. 20. operating margin. 10. 0. 100%. 0. peripherals.

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THE PC INDUSTRY’S PROFIT POOL

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  1. THE PC INDUSTRY’S PROFIT POOL 40% The value chain for the PC industry includes six key activities; the profitability of the activities varies widely. Manufacturers compete in the largest but least-profitable segment of the chain. 30 20 operating margin 10 0 100% 0 peripherals other components personal computers software microprocessors services Share of Industry Revenue source: Harvard Business Review, May-June 1998

  2. THE U.S. AUTO INDUSTRY’S PROFIT POOL 25% The automotive industry encompasses many value-chain activities. The way that profits and revenues are distributed among these activities varies greatly. The most profitable areas of the car business are not the ones that generate the biggest revenues. 20 15 operating margin 10 5 0 100% auto loans gasoline 0 new car dealers auto insurance service repair leasing used car dealers auto rental warranty auto manufacturing Share of Industry Revenue aftermarket parts source: Harvard Business Review, May-June 1998

  3. Profit Pools: Company Examples Companies Automakers U-Haul Elevators (OTIS) Iomega Polaroid Core Business Auto manufacturing Truck Rental Elevator Manufacturing Zip Drives Instant Photography Cameras Sources of Highest ROI Leasing, insurance, service. Packing materials, storage Service Zip Disks; Storage Film

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