EconAir

  You need to know three things about management:   80/20 Rule Opportunity Cost Compound Growth   80/20 Rule (Also called Pareto’s Law)   This idea says that a relatively small percent of actions account for a relatively large percent of outcomes. Find and concentrate your efforts on the important influences on your business. The original studies were about the concentration of income and wealth. Recent  studies seem to indicate increasing concentration of income and wealth in the United States. A company's choice of target market and market niches is critical to marketing strategy.   Some hypothetical examples.   20% of your customers account for 80% of your sales.   Often, companies with a large product line with many variations find that 50% of their products account for over 90% of sales. An even smaller percent usually accounts for most of the profits.   20% of your SKUs account for 80% of your stockouts (and lost sales).   20%...

Positive Externality You need to know three things about management and corporate finance: 80/20 Rule Opportunity Cost Compound Growth 80/20 Rule (Also called Pareto’s Law) This idea says that a relatively small percent of actions account for a relatively large percent of outcomes. Find and concentrate your efforts on the important influences on your business (and life). 20% of your customers account for 80% of your sales. 20% of your product line accounts for 80% of your sales and profits. Often, companies with a large product line with many variations find that 50% of their products account for over 90% of sales. An even smaller percent usually account for most of the profits. 20% of your SKUs account for 80% of your stockouts (and lost sales). 20% of your programmers account for 80% of the bugs in new programs. The percentages aren’t always 80/20. Some examples: McDonald’s accidentally learned that 10% of its customers accounted for 60% o...