Pareto's Principle: Expand your business with the 80/20 rule
By 50minutes
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About this ebook
This book is a practical and accessible guide to understanding and implementing Pareto’s Principle, providing you with the essential information and saving time.
In 50 minutes you will be able to:
• Understand Pareto’s Principle and how to identify the 80/20 ratio in any area of your life or business
• Identify the most important 20% and focus on the main factors that result in the majority of your results
• Use Pareto’s Principle to manage your business more efficiently, increase revenue and get organized
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Book preview
Pareto's Principle - 50minutes
Key points
Names: Pareto’s principle, Pareto’s rule, Pareto’s law, the 80/20 rule, the law of the vital few.
Uses:
Economics: Business management (quality management, customer management, production management, stock control, human resources, etc.), creating commercial and marketing strategies, etc.
Physics, sociology and statistics.
Private sector: time management, task organisation, etc.
Why is it successful? According to Pareto’s principle, ‘80% of effects are the product of 20% of causes’. This ratio allows you to quickly identify the essential part of any activity. The model is found in many areas of daily life and in the business world. For example, when a business wants to identify the customers that generate the most revenue. If the 80/20 ratio is considered, the company can focus on the 20% of customers that generate 80% of its turnover to try and make them loyal customers.
Key words: Vilfredo Pareto, Pareto’s principle, the 80/20 rule, ABC analysis, turnover, Joseph Juran, time management, customer relations, relationship marketing, CRM, Pareto chart, Long Tail theory, Pareto efficiency
Introduction
History
Pareto’s principle is an analysis and decision-making tool created by Vilfredo Pareto (1848-1923) at the