Satisfactory Margin and Value

Satisfactory Margin and Value

“Value is when the outcome of a situation exceeds the cost incurred by a satisfactory margin.”

But what is a ” satisfactory margin”?

Margin is the difference between the amount of cost incurred and the benefit derived. Not all margins, however, are created equal. In order to experience value, the margin must also be satisfactory. For example, a manufacturer produces an item that costs him $10.00 and sells the same item for $12.00. So this item has a 20% margin (($12.00 – $10.00) / $10.00). This manufacturer may be very happy with this margin. But for another manufacturer, and for a variety of reasons, this margin may be woefully deficient.

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Ed Evarts

Raise Your Visibility & Value: Value and Satisfactory Margin

In the Raise Your Visibility & Value model, “Value is when the outcome of a situation exceeds the cost incurred by a satisfactory margin.”

In our last two posts, we addressed the meaning of the terms “outcome of a situation” and “cost.” Today, we’ll discuss “satisfactory margin.”
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