As complexity is added with more products and revenue, costs grow geometrically to a point after which additional complexity costs exceed the value being created. Maximum profitability occurs at this inflection point.
Why is a Whale Curve important for any filed?
Profit concentration provided by a Whale Curve can be eye-opening; understanding how few products create profit and how many destroy it can be a investor's call-to-action. While the profit-destroying elements certainly warrant attention, identifying the level of profit concentration also serves to underscore the need to appropriately resource and support the key 20-30% of profitable. Often, these profitable prices are under-supported, as they are treated the same as the rest of the portfolio.
The position on and shape of a Whale Curve is dynamic, has a deep understanding of how to move along and reshape Whale Curves to move to positions of higher profitability. Moving along the Whale Curve by eliminating unprofitable. While this is a critical first step,we recognize that stopping there leaves considerable opportunity and suggests focusing on reshaping the Whale Curve.