Almost without exception, high growth businesses have above industry average gross margins. This may have come from their product, process or business concept innovation or may simply have come from superior management which has enabled the business to run more effectively and efficiently than it’s competitors. However, where a competitive advantage can be created around a compelling need, especially in a growing market, prices are less sensitive and thus higher prices and better margins can be achieved.
See the following short articles on this topic:
Premium Position - High margins deliver resilience
Redesign - Design out costs and add value
Revenue Management - Manage revenue for time expired assets
Lift Prices - Test out price sensitivity
Survival - High margins help you survive