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Yo-Yo in business performance narratives point to serious improvement areas.
Most companies are declaring their quarterly and annual results now. It is interesting to find a repeated pattern in their narratives across years.
It starts with declaring their strong volume growth compared to the industry. This narrative is conspicuously silent on profitability levels. The next year narrative focuses on premiumisation and profitability improvement, while remaining silent on volume growth.
The cycle continues with narratives in alternate years focusing on volume growth and premiumisation. The underlying message is clear. The company has bought volume growth through discounts and achieved profitability improvement next year by reducing those discounts.
If you notice such yo-yo in performance narratives, my suggestion is to check out both volume growth as well as profitability improvement over a longer period of 5 or 6 years. Chances are that you would find volume growth in line with the industry and profitability levels stagnant.
Business doesn’t improve by playing with discounts. What we need is getting more consumers to buy more of our products and sticking to repeat purchase.
Consistent on-shelf availability of the product assortment plays a vital role in this endeavour…