Gross profit margin can also be used to set and monitor sales goals for your company. Because the costs of raw materials and labor all play a major part in gross profit margin it is imperative to revisit the bottom line in comparison to operational expenses. A change in suppliers, materials used, pricing structure labor and productivity are all factors that could change the profit margin ratio... displayed 300 characters
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It's important to analyze the total effect of cost cutting, examining the ripple effect throughout the organization for each cost reduction in terms of what is given up. To improve profit margins we need to understand two things, If everyone offers the same product customers will choose on price If what we offer appears to be the same as everyone else's offering, what can we do to differentiate it? As products reach maturity and more competitors come into the market prices fall... displayed 300 characters
