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Edge Strategy by Dan McKone, Alan Lewis

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CHAPTER 6

DEALING WITH MARGIN PRESSURE

Staying Profitable Despite Headwinds

Philosophically, upselling is imbued with optimism; it implicitly assumes some customers will part with more money in exchange for additional benefits. However, edge strategies play an equally important role when the core economic model is under duress.

In most industries, the pressure on margins is both prevalent and inexorable. During average times, a large percentage of industries face significant margin deterioration. In recessionary periods, that number can skyrocket. We have observed that, within a given industry, there is often a distribution of performance in which a minority of companies are acceptably profitable, while a majority are seeking relief from cost-based ...

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