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strategy+business: Corporate Strategies and News Articles on Global Business, Management, Competition and Marketing
Winter 2014 / Issue 77

s+b Trend Watch: The Profit Conundrum

Revenues go up, but so do costs — and even with overhead cuts, company leaders don’t see the expected benefits of scale.

The Profit Conundrum

As companies develop new products, expand their geographic reach, and add distribution channels, their revenues increase. But according to a new cross-industry analysis of more than 300 firms, this complexity also raises the cost of goods sold (COGS)—and often means that operating margins fail to meet expectations.

 

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s+b Trend Watch: The Profit Conundrum