Week 3 - Weekly paper

Hafidh Aulia Muhammad (MMBM 47- 15122310006)

Choosing the Right Customer is the main objec ve is to guide organiza ons in iden fying and focusing
on the most valuable customers, ensuring long-term success and profitability. By adop ng this
framework, companies can align their resources and efforts towards serving the right customers and
maximizing the value they create.

First iden fy the best primary customer is a crucial aspect of the framework. Not all customers
contribute equally to a company's bo om line, and focusing on those who generate higher profits can
significantly impact financial performance. By analysing customer profitability metrics, companies can
allocate their resources more effec vely and priori ze efforts towards maximizing value from their
most profitable rela onships.

The second dimension, fit with capabili es, encourages companies to assess how well their strengths
and competencies align with customer needs. By targe ng customers whose demands align well with
what the company can deliver, organiza ons can provide superior value and enhance customer
sa sfac on. Five basic arrangement you can choose from are low price, local value crea on, global
standard of excellence, dedicated service rela onship, and expert knowledge.

The third, the framework encourages companies to evaluate the long-term poten al of customers.
This involves considering factors such as growth prospects, customer life me value, and the poten al
for expanding the rela onship over me. By priori zing customers with significant long-term poten al,
organiza ons can build sustainable and mutually beneficial partnerships.

Choosing the right customer is crucial for companies aiming to achieve long-term success and
profitability. Robert Simons' framework provides a structured approach to developing customer-
centric strategies. By evalua ng customers based on profitability, fit with capabili es, and long-term
poten al, businesses can effec vely allocate resources, deliver superior value, and build sustainable
rela onships.

The conclusion implemen ng this framework requires companies to priori ze customers who
generate higher profits, have needs that align well with the company's capabili es, and demonstrate
substan al long-term poten al. By adop ng a customer-centric mindset and aligning strategies
accordingly, organiza ons can enhance their compe ve advantage, improve customer sa sfac on,
and drive business growth.
Overall, choosing the right customer is not only about acquiring customers but also about strategically
iden fying and nurturing rela onships with those who can contribute the most value to the company
in the long run.