UK managers admit they don’t really know how to increase profits
Half of Britain’s top bosses do not know how to raise their profit margins, according to a survey of some of Europe’s largest businesses.
Just 48 per cent of UK executive directors said they could think of one thing their company could do which would immediately improve their bottom line, while one-third said they believed their sales teams made decisions on prices based on “gut feel” rather than “hard facts and quantifiable business data.”
Cranfield School of Management, which commissioned the research alongside Vendavo, said there was a “worrying lack of insight into [profit] margin” among the 200 board-level managers from companies with revenue of more than $1bn (£710m) it spoke to.
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“While eking out margin gains is incredibly tough in most industries, many c-level executives feel their organisation is under-equipped to affect it,” said Patrick Reinmoeller, professor of strategic management at Cranfield.
“Many organisations are effectively flying blind in this area,” added Robert Irwin, vice president of business consulting at Vendavo Europe.
Managers in Germany, Austria, Switzerland, Italy and Scandinavia were all more likely than their British counterparts to say they had a plan to increase profit margins.