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What does the 80/20 strategy mean, and how does it help JB Hi-Fi stay competitive?
Discover how JB Hi-Fi uses the 80/20 strategy to focus on high-performing products, boost profits, and stay competitive in a crowded retail market.
Published on: Aug 4, 2025
What does the 80/20 strategy mean, and how does it help JB Hi-Fi stay competitive?
The 80/20 rule, or Pareto Principle, is that 80% of a company's revenue will come from 20% of its products or customers. For JB Hi-Fi, that means more emphasis on the high-performing products or customer segments that drive the most revenue. Students might find this idea abstract, but in retail, it's a matter of efficiency. Rather than attempting to sell everything on an equal basis, JB Hi-Fi invests more in high-demand, high-margin products like high-end laptops, smartphones, or console games. This makes the business competitive, takes profit to the limit, and keeps the business lean. It also enables them to keep competitive prices on flagship products, which brings customers in the door, and cross-selling. This focused effort is needed in a saturated market where not every product will be a success.
Read More:
1. Why is JB Hi-Fi facing pressure from new market entrants, and how can it respond effectively?
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