In a previous chapter, we debated about the advantages of companies having higher operating margin. A good OPM acts as a shock absorber against stagnating economy, inflation and escalation of input cost etc. These hitches can be easily managed by high margin businesses. This is possible by deploying improved latest technologies, quality control processes, innovative production methods, optimal supply chain management etc, By constantly doing such things a company can establish its advantage – add the prefix ‘long term’ – over other competitors.
