04-25-2011, 03:45 PM
[quote name='you2' timestamp='1303732776' post='7893']
What he said is fundamentally flawed. That's why margins are so important. Volume does help with regards to potential for profits but does not dictate actual profits. There are many examples where companies establish an approach of taking a loss (or low margins) to gain market share but fail to capitalize on those market shares and eventually go bankrupt. In a game of slim margins for market shares small inefficiencies can be the difference between solid profits and massive losses. I've not studied the balance sheets for the companies mentioned (and I'm unsure the large ones break down exact numbers for the camera division(s) (slr/compact) with regards to unit sold; margins and other related costs (such as support, royalty and r&d).
Historically canon has done well (at least the few times I've looked at their balance sheet) but I'm fairly sure a couple of the companies mentioned have rather slim margins (some of that is due to lower volume as you suggested but some of it is due to inefficiencies and pricing).[/quote]
Certainly, such behavior can be used sometimes but doing it on a regular basis is corporate suicide, i.e. pure stupidity. According to [url="http://www.japantoday.com/category/business/view/canon-net-profit-more-than-triples"]Canon's profit data[/url], they are not doing it. Oh, boy, I am so surprised...... <img src='http://forum.photozone.de/public/style_emoticons/<#EMO_DIR#>/smile.gif' class='bbc_emoticon' alt='
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What he said is fundamentally flawed. That's why margins are so important. Volume does help with regards to potential for profits but does not dictate actual profits. There are many examples where companies establish an approach of taking a loss (or low margins) to gain market share but fail to capitalize on those market shares and eventually go bankrupt. In a game of slim margins for market shares small inefficiencies can be the difference between solid profits and massive losses. I've not studied the balance sheets for the companies mentioned (and I'm unsure the large ones break down exact numbers for the camera division(s) (slr/compact) with regards to unit sold; margins and other related costs (such as support, royalty and r&d).
Historically canon has done well (at least the few times I've looked at their balance sheet) but I'm fairly sure a couple of the companies mentioned have rather slim margins (some of that is due to lower volume as you suggested but some of it is due to inefficiencies and pricing).[/quote]
Certainly, such behavior can be used sometimes but doing it on a regular basis is corporate suicide, i.e. pure stupidity. According to [url="http://www.japantoday.com/category/business/view/canon-net-profit-more-than-triples"]Canon's profit data[/url], they are not doing it. Oh, boy, I am so surprised...... <img src='http://forum.photozone.de/public/style_emoticons/<#EMO_DIR#>/smile.gif' class='bbc_emoticon' alt='
' />