Why Gross Profit Matters

Gross profit matters because it is the measure of "Sustainable Competitive Advantage"

That is to say "Will your organisation Survive"

The reason for this is that if your competitiors are making higher margings on the sale of each product they will, for each unit of effort, be generating more cash, paying more dividends and having a higher share price. In time they will either take over your market or your organisation.

So what are the factors that control GP?

It is actually quite simple. It is the emotional perception of the value of the brand.

See Marketing Theory