What do tobacco and software have in common?


Everything from algorithmic trading in investments to lean manufacturing has been invented to drive up corporate profits. Following Gordon Gecko’s mantra, “Greed is good,” one has to wonder, if enterprises have gone through such creative measures to optimize everything and eke out new marginal efficiency, what can a modern company do to boost the bottom line? Look to the top performing net margin industries, of course.

Looking at the Fortune 500, the average net margins across the Fortune 500 were 7.28 percent with a median of 6.75 percent; however, the top two performing industries by net margin in 2011 were tobacco and software, with 21.50 percent and 19.88 percent, respectively. Clearly, tobacco and software maintain a wide gap when compared to these normative measures, and these numbers persisted through 2012.

Can companies in other industries incorporate tobacco or software into their business to boost margins?

Okay, so maybe not tobacco…

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