The low-margin manufacturing business is so different for Google.
The additional labor has allowed him to start manufacturing some lower-margin, higher-volume orders--the kind that give him access to the biggest customers.
"People in China have this view that they do all the hard work of manufacturing, and the margin gets taken by the people with the brands, " says Chao.
Likewise Digital Equipment focused on its profit margin in computer-aided design and manufacturing software only to be destroyed by its lower margin but higher volume competitor AutoCad.
In the process it has transformed itself from a low-margin textile-manufacturing business into one that derived two-thirds of its revenues in 1997 from garments.
Intel also makes chips using its 0.18 micron technology, considered as important in a strategy to lower manufacturing costs for the higher profit margin chips.
The weak dollar has rendered American labour more competitive, but not enough to rejuvenate low-margin, labour-intensive manufacturing in industries such as textiles, furniture or paper products.
Since Akzo would be able to supply Wal-Mart from its existing manufacturing capacity, Barker estimates that the gross margin on Akzo's budget brand decorative paint would be an impressive 30%.
Abbott has also made some manufacturing and distribution process changes that are likely to drive margin improvements across its businesses.
The company said the sequential drop in gross margin reflects higher shipments of advanced products with higher manufacturing costs.
Those surveys found that the economy was the top issue for GOP voters in both states -- and by a wide margin in Ohio, which has seen a sharp decline in manufacturing jobs in the past decade.
Does your finance department review all proposals concerning new products, distributors, manufacturing processes or market entries and comment on whether they meet internal hurdles for gross margin?
What has been proven is that if you are one of the top spenders, innovation will impact gross margin (the percentage of revenue left over after subtracting the costs of materials, labor, manufacturing, and direct shipping, and after paying other expenses incurred in making the products or services sold).
Corning, Rakesh says, is showing margin rebound to mid-2008 levels as factory utilization picks up and Corning Gen 8 and Gen 10 manufacturing efficiencies kick in.
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