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Definition Of Profit Maximization

Definition Of Profit Maximization: Profit maximization refers to the process wherebycompanies focus on maximizing profit or getting the best possible profit in their

particular kind of business.

Profit maximization tehniques include:

>> Cost minimization

>> Waste reduction

>> Lean manufacture

>> Flat organization structure

>> Labour reduction through investment inappropriate tehnology

>> Labour cost reduction

>> Reduction of organizational fat by focusing on the company's core business

>> Product profit margin increase through value optimization

>> Developing new markets

>> Product line extension

The truth is that shareholders want increase in dividends year in, year out. If the

business is not competitive enough to consistently deliver shareholder value,shareholders are quick to jump ship to other companies that can give them better

returns on their investment.

This puts immense pressure on the leadership of blue chip companies orconglomerates to deliver. Competition is stiff, the business climate can be tough. Yet

shareholders won't take anything short of consistent growth of their investment.

For dividends to grow, organizations must find creative ways to sell more, spendless, and create greater value for shareholders.

That is why profit maximization is a term you will hear virtually every day in profit

oriented organizations.

The pressure is huge!

This pressure has compelled some companies to abandon some of their social

responsibilty commitments to society. There is no valid excuse for doing that.Instead, the organization's leadership team should look for inovatie approach to

profit maximization.

Sometimes, injecting fresh blood into the system helps. Fresh blood . . . with

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experience and proven track record for leadership success and creativity . . . comeinto the business with a fresh pair of and ideas that ca turn things around.

profit maximization 

Definition

A process that companies undergo to determine the best output and price levels

in order to maximize its return. The company will usually adjust influential

factors such as production costs, sale prices, and output levels as a way of 

reaching its profit goal. There are two main profit maximization methods used,

and they are Marginal Cost-Marginal Revenue Method and Total Cost-Total

Revenue Method. Profit maximization is a good thing for a company, but can be

a bad thing for consumers if the company starts to use cheaper products or

decides to raise prices.

Economic Definition of  profit maximization.

Defined:

Term profit maximization Definition : The process of obtaining

the highest possible level of profit through the production and sale

of goods and services. The profit-maximization assumption is the

guiding principle underlying short-run production by a firm. In

 particular, it is assumed that firms undertake actions and make the

decisions that increase profit. The profit-maximization assumption

is the production counterpart to the utility-maximizationassumption for consumer behavior.