Profit Pools

Profit Pools

  • Case
  • Teaching Notes
Abstract

This case describes the concept of the profit pool. A profit pool depicts the contribution of revenue and profit from different value chain markets or segments in an industry and aids in the visualization of different profit and revenue sources in an industry. The case explains the profit pool concept through the discussion of the cinema business, the healthcare industry, the coffee industry, and big tech. In addition, the case discusses two industry characteristics associated with the profit pool concept. The first, a choke point, refers to a certain type of activity or type of company in an industry that has strong influences on the flow of profit throughout the industry. The case uses roasting value chain activity in the global coffee industry to illustrate ...

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