What is Pareto Principle?

A definition of Pareto Principle

“The Pareto Principle, or the 80/20 rule, states that 80% of outcomes come from 20% of causes, widely used in business to prioritize tasks and resources effectively.”

Pareto Principle in Business Glossary - What is the Pareto Principle?

Business Glossary > What is Pareto Principle?


Examples of Pareto Principle in a Sentence:

The Pareto Principle suggests focusing on the 20% of work that will yield 80% of results.

In customer service, the Pareto Principle indicates that 80% of complaints come from 20% of customers.

The Pareto Principle can help managers identify the most productive employees contributing most to business results.

Why is Pareto Principle Important in Business?

The Pareto Principle is vital for businesses to optimize resources and focus on areas with the most significant impact. By recognizing the important 20%, companies can improve efficiency and productivity, ultimately leading to increased profitability and success.

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Associated Terms

Here are some associated business terms and synonyms for “Pareto Principle”:

  • 80/20 Rule
  • Pareto Law
  • Pareto Analysis

Apple’s Use of the Pareto Principle

Apple applies the Pareto Principle by focusing its efforts on a limited number of products that generate substantial revenue. By investing in a few key products, Apple achieves significant market success and customer satisfaction.

Final Notes on Pareto Principle

Businesses can benefit from applying the Pareto Principle by identifying key areas to improve efficiency. Prioritizing tasks and resources based on this principle can lead to better decision-making and strategic planning.


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