how can a firm succeed in increasing its profitS?

Answer 1

There are lots of ways.

Increase the market share, which will increase profit but not profit margin. Of course you'll have to have the capacity to increase the production or delivery.

Increase the value of the products or services.

Increase the efficiency of production of products or delivery of services.

Or any combination of the above. I've worked at companies that did all of the above, sometimes all at once. I've also worked at companies that did the did the opposite of a couple of them and went out of business.

The first company improved its product by using research to create a more effective formula. This increased the value of the product making it possible to sell it at a higher price. At the same time the new formula actually used lower cost materials which reduced the cost of producing the product. Because the performance of the product was so much better than the competitors that this company soon dominated the market increasing its market share. Company went from 10th largest producer to the largest in a time span of about 3 years.

The other company made the fatal error of average pricing. They fabricated structural components and used their average cost to bid on new projects. As a result complicated structures were underpriced and simple structures were overpriced. Since a competitive situation exist the company got more and more complicated structures to build and fewer simple jobs, driving up the average cost to the point where they lost almost all the simple structures. So they lost market share, their cost of production increased, and because of the price structure they were committed to jobs where they actual lost money on each job. They did not survive.

Answer 2

Good Customer relations and development of new and exiting products.Advertisements are very help full also