The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits
by Adrian Slywotzky and David J. Morrison
Three Rivers Press, paperback, $15.00

In the movie, Indiana Jones: Raiders of the Lost Ark, Indiana maneuvered by "obstacles in his path: deadly traps, a den of spiders, an assistant who double-crosses him and much more. After a series of harrowing escapes, he finally gets the artifact. But as he picks it up, he triggers the mother of all traps, and the ancient tomb begins to fall apart. Frantically he races back through the passages. Right behind him is a giant boulder that threatens to obliterate him should he fail to stay two steps ahead of it."

Now step back and think how this scenario describes how you scramble to stay two steps ahead of the competition. The question is: Are you doing this to just to survive, or are you staying two steps ahead of the competition to stay in the Profit Zone?

According to the authors, "the Profit Zone is the area of your economic neighborhood where you are allowed to earn a profit". The authors indicate the old metric of market share is dead. When they analyze the many different types of business designs, they back into using market share as a metric, with the caveat that it has to be the market share in the Profit Zone.

The authors have divided the book into three parts. In the first, "Succeeding in Changing the World of Business," they lay out their premises and ask a series of provocative questions, such as: "Am I managing for volume growth or value growth?" Examples are given of companies which have produced some of the most successful business models even though they were in low or no-growth industries. Coca-Cola has achieved significant value growth in the low growth beverage industry. GE has taken a collection of low-growth manufacturing industries and made them into market leaders, which has lead to a huge increase in GE's market value. Swatch has exploded to dominance in the low growth watch-making industry. Then the authors explain many of the twenty two business designs they postulate.

Section Two, "The Reinventors and How They Succeeded," discusses how reinventors like Jack Welch (GE), Nicholas Hayek (Swatch), Charles Schwab (Schwab) and nine others changed the business models of their companies to take advantage of their strengths and of the opportunities their specific markets allowed them, often more than once.

Section Three is "The Profit Zone Handbook," which provides an outline of the steps they recommend to help leaders transform their businesses into the most appropriate designs for their industries and capabilities.

The book is interesting, challenging, and extremely thought-provoking. The challenge issued by the authors is to have you transform your company to take advantage of where the market place will allow you to make a continuing profit. The Profit Zone is continually changing, and your company must change to stay in the Zone.

Dana Baldwin is a consultant with Center for Simplified Strategic Planning, Inc. He can be reached via e-mail at

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