It's a demand-driven commodity, where the reserve margin on the supply side has shrunk to under 2 million barrels per day.
And while that is good for the consumer, it tends to result in margin pressure across the supply chain as the vendor needs to trim costs in order to maintain their margins.
Some speculate that Ispat and other capital intensive manufacturers will be relegated to the status of being the low-margin drones of others' supply chains.
However, its net profit margin was halved amid a supply glut. (See related story here.) The company distributes Jaguar, BMW, Cadillac, Lamborghini and other makes.
FORBES: Lujiazui Breakfast: News And Views About China Stocks -- Aug. 27
To align costs, they will focus on gross margin improvement through product simplification, enhanced supply chain strategies.
Since 2006, HD increased its operating margin through efforts such as developing its supply chain management, which reduced cost of transportation and inventory, and developing a formal distribution channel which increased bargaining power over suppliers.
However, its net profit margin was halved owing to discounting and a supply glut.
FORBES: Chinese Auto Distributor ZhengTong's Net Profit Rose, Margins Whacked In 1st Half Amid Glut
But to boost output and income, a tax cut must be the right type -- one that cuts taxes "at the margin" on the additional income associated with additional output (supply).
The main reason for Apple announcing a lower gross margin outlook for Q3 was the uncertainty behind the raw material supply chain issues prevailing during the last few quarters due to the Japan tragedy.
FORBES: Apple's Worm: Can It Beat Its Own Earnings Forecasts?
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%.
At the margin, it does make sense that buy-backs affect the balance of supply and demand.
应用推荐