TOPIC:

VELOCITY
INVENTOR MEANING
Y
TURNOVER Inventory Velocity refers to
how quickly inventory moves
Mathematically
Cash Generation Inventory Velocity = Total sales
Total Inventory
Market Share
 Formula

Interpretation
Infact return = Profit margin X Velocity

The faster the i.e Return(R) = Margin(M) X Velocity(V)

Velocity, the
R = M X V
higher the return
R is a percentage
For example
8 percent
10 Percent
15 percent…..

NB: Best Business people focus on both

profit margin and velocity as well
 FAILED
GROWTH GROWTH

Growth Translates to prosperity Failed Growth affects work place as follows

It can apply to
• A person • Lack of personal Progress
• A company • No promotion
• A national economy • Downsizing of workers or loss of employment
• The company goes into death-spiral
 GOOD GROWTH

GROWING THE
Good growth is profitable. Organic differentiated and
RIGHT WAY
sustainable
* PROFITABLE
• Capital efficient
• Earns an amount greater than the company could

NB receive

Evidence of * ORGANIC
growing the
right way
:
Over investment and
• Growth flows from what the company is already
doing
low returns • Builds company’s creativity muscles
• Profitability makes no business
• Sustainability * DIFFERENTIATED
sense • Provide what customers prefer
• Improved margins
and velocity * SUSTAINABLE
• Not quick spike in revenues
• Growth to continue year after year
 THE GROWTH
BOX
One of the best ways to help you spot opportunities is filling in the growth box
EXISTING CUSTOMER NEW CUSTOMER

B C
Existing customers with new needs New customers with new needs
NEW - Go into new business
- Place where you or competitors not solving
NEEDS - What to do when current strategy is in trouble
customer problems
- Determine what customers want - When charge in market place has rendered your
- Give customers better alternative products/ services strategy obsolete

A D
EXISTING Existing customers with existing needs
NEEDS - Expand the pond in which you fish New customers with existing needs
- One still remains true to his/her core - Service through existing capabilities
- Identify adjacent market to serve with you’re
core competences
 QUESTIONS TO ASK

• How can we fill an existing need our current customers have? (BOX A)
• What new need can we satisfy for our customers (BOX B)
• Should we go after new customers who have new needs? (BOX C)
• How can we sell what we have to new customers? (BOX D)