Continued
Cost control
Last week, it was observed that though GNPL was experiencing significant difficulties, its management was making the best of a bad situation. This week an analysis using the Strategic Profit Model (SPM) helps to reveal that, with no expectation of new money, cost control was the only survival tactic available to the company, and that that business strategy seems to have worked for a while. The SPM is similar to the DuPont Identity used to measure operational efficiency and resource performance. The SPM therefore brings together information from the balance sheet and the income statement and enables one to link financial performance with the contribution of customers. The SPM also helps with understanding the financial relationship between resources under the control of management and external parties.