Comprehensive Granular Profitability.
Providing the visibility you need to make better business decisions.
Comprehensive Granular Profitability
Granular Dimensions
Providing visibility into the lowest level of business dimensions...e.g:
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Product: Diet Pepsi
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Package: 20oz bottle
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Channel: Convenience
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Customer: 7-Eleven
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Geography: Chicago
Comprehensive Financials
With a full P&L capturing all costs, including overhead, required to bring a product to market.
Better understand your business
Comprehensive Granular Profit highlights true profit concentrations across your portfolio at the most granular level
Highlightlight concentrations with ease
The waterfall highlights the positive and negative profit contributions of each segment by showing both the margin and revenue of each segment on the y-axis and x-axis, respectively.
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This level of detail helps to highlight:
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Overall profit contributions across segments
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Differences in country profitability and product mix
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Comparison of product performance across countries
Use those insights to drive real improvement
Grow your most profitable segments
Understand exactly where profits are concentrated and explore opportunities to:
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Grow the market and gain share
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Focus salesforce efforts through alignment of incentives
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Invest to protect and grow your position
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Expand manufacturing capacity if supply constrained
Improve your under performers
Pinpoint segments with sub-optimal performance and target fixes with laser-like precision.
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Identify and share best practices by looking across similar segments and markets for insights
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Systematically target areas for cost reductions
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Reallocate resources away from unprofitable segments
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leverage total cost to serve to evaluate pricing
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Consider exiting if the above fixes are insufficient
Unleash the power of transparency
Empower your organization with complete transparency across your portfolio, enabling:
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Side-by-side comparisons of similar segments within or across different markets
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Identification and sharing of best practices
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Trending analysis to highlight impending issues and inspire preemptive actions
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An understanding of each function’s impact on the bottom line for each segment
Only CGP can provide these insights by establishing the true breakeven point to identify actual segment profit contributions, and harnessing inherent performance variability at the most granular levels to isolate the key drivers of performance differences.
CGP informs decisions across all functions
Comprehensive Granular Profitability is a powerful resource that can be used to drive better strategic decisions across all functions. Explore example cases below:
Management
Visibility into true profit contributions across the organization enables optimal resource allocation and a more unified organization.
Sales
CPG optimizes sales force efficiency by reprioritizing sales efforts according to the true contribution across different products, customers and markets.
Strategy
CPG creates a single source of truth, facilitating comparisons across segments on a like basis. This helps to prioritize efforts and reallocate resources holistically across the entire organization.
Product Mgmt.
Product Management gains insight into the true profit contribution and variability across different products and markets, which can encourage and inform cost optimization efforts.
Finance
By properly tracking and assigning costs to revenues, CPG helps finance teams understand true performance drivers regardless of legacy org structures, thus enhancing strategic and financial planning
Supply Chain
CGP helps supply chain understand differences in profitability driven by sourcing decisions, which informs opportunities for global supply chain optimization.
Marketing
CPG provides marketing with insight into the true spend across products, customers and geographies, which in turn improves marketing ROI measurement.
M&A
CGP supports M&A due diligence and integration by providing greater insight into profit drivers and facilitating profitable growth strategies upon integration.
CGP drives better insights
Comprehensive Granular Profitability is proven to drive more effective insights & profitable growth. The examples below provide evidence of the insights and actions driven from CGP at various businesses. These insights and resulting actions would not have been possible without CGP.
Salesforce Incentives
Insight
Impact
Granular product profitability results highlighted misalignment with the salesforce incentive program, which rewarded the production of unprofitable products while not sufficiently incenting profitable products.
Insights allowed management to switch incentives from being measured on sales to profitability. This change in incentive structure drove a significant increase in overall profitability.
Customer Behavior
Insight
Impact
A pharmaceutical company believed that (1) a complete portfolio of products was required to win business and (2) profitable sales offset losses at a customer level. CGP provided evidence that product losses were concentrated in select geographies & customers, enabling targeted actionability.
CGP by product and customer provided evidence that unprofitable products were also concentrated in unprofitable customers and thus not simply a cost of doing business. This enabled selective product rationalization while maintaining profitable customer relationships.
Segment Focus
Insight
Impact
Profitability measures highlighted that a specialty chemicals company was preferentially investing in disadvantaged and unprofitable segments and simultaneously neglected opportunities to invest and grow their most profitable segment.
Insights led to changes in resource allocation which drove market share and profit gains in the most profitable segment and reduced losses in the disadvantaged segments.
Product Design
Insight
Impact
Product profitability information highlighted that the strategy of using a single premium product design worldwide resulted in excessive discounting in lesser developed markets where lower quality competing products were the norm
This insight drove the development of a lower-cost product to compete profitably in lesser developed markets, and its subsequent introduction in developed markets drove reduced discounting and profitable share gains in these markets as well.
Salesforce Targeting
Insight
Impact
CGP highlighted that profitability differences across prescribing physicians were driven by differences in the relative mix of patient payors for a consumer medical product.
Insights drove a shift in salesforce physician detailing from highest-volume doctors to highest-value physicians
Footprint Growth
Insight
Impact
A regional bank expanded its footprint chasing demographic growth while branch profitability results highlighted branch density as a key driver of performance.
This insight resulted in a shift towards infill over geographic expansion to build branch density in existing markets instead.
Common roadblocks to achieving CGP
Despite recognizing the benefits of CGP, most companies fail to achieve this level of visibility.
System Limitations
Financial systems are not designed to measure granular profit:
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Revenue is captured granularly, e.g. by product (SKU), customer, channel, geography, etc.
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But costs are captured organizationally by “cost center,” e.g. by market and/or function (example: advertising in France)
Traditional Data Limitations
The more granular you go, the less you can see...
Resource Constraints
Companies that try to build CGP internally typically face the following constraints:​
Inadequate experience and capabilities
Without experience in measuring CGP, most attempts turn out to be too simplistic to be insightful or too complex to maintain over time, and they thus fail.
Granulytix advantage: 20+ years of experience measuring CGP for 100+ businesses give us the know-how to balance complexity and insights.
System Limitations
Multiple decentralized legacy systems and unsynchronized data platforms contribute to data complexities. and with disconnected reporting.
Granulytix advantage: Granulytix is experienced in navigating and integrating large, disparate data sources.
Political Issues
Especially when developed internally, measurement methodologies are susceptible to political influence as stakeholders attempt to push costs into other domains.
Granulytix advantage: Granulytix has the experience and know-how to navigate these competing interests to build an unbiased methodology quickly and efficiently.
Most importantly, CGP as a measure is not sufficient. Businesses need the tools and the strategic abilities to generate meaningful insights and turn them into business model changes. Granulytix has developed a holistic solution that addresses all these business needs.
Benefits of CGP
The benefits of managing to CGP extend far beyond improved performance measurement and financial visibility. Effective use of CGP creates high-performing organizations through increased visibility, transparency, clarity of purpose, and alignment across all functions of the organization.
Complete Financial Visibility
CGP provides visibility into profitability and overall cost structure at the most granular level
Single Measure of Success
CGP creates focus and eliminates confusion from multiple, often conflicting, metrics and goals
Cross Functional Alignment
CGP fosters teamwork through transparency and an understanding of each function’s impact on the bottom line
Improved Strategic Decisions
CGP helps leadership to prioritize the highest profit growth opportunities
