Business analysis is the subject of this chapter. Drucker explains how to “diagnose” the health of a business’s products and services. The goal is to understand which are the most valuable in terms of revenue contribution and cost share. Through this analysis, a business gains insight into what its future products may be and which ones need to be abandoned.
Interestingly, Drucker says the most profitable businesses are often smaller companies. Their narrow focus enables them to become a leader and provide better value to customers. Big companies try to do too much and they end up supporting products that are not as valuable to customers.
Finally, the most promising products and services need to be supported by the best resources.
(Managing for Results, chapter 3)