Confronting Reality About Margins --Dickeson

When we look at 10 years or more of the Ratio Studies we find that the upper 25 percent of the firms reporting have operating margins of 12 percent to 15 percent. Not great, but not too bad. Let's look at the product pricing. Surprise! Surprise! All firms, both upper 25 percent and lower 75 percent, are within fractions of a single point of each other when judged from a value-added point of view. It isn't price that makes the difference. That's reality. What is it, then, that gives the upper 25 percent such a great difference in operating margin?