Part 2
Customer behaviour
As was noted in Part 1 of this article, the management of DDL is in control of the economic resources of the company and has little to fear from shareholder activism. It was also noted that, despite the control that management exercised by virtue of the sizable internal equity available to it, leading the company into the future would be no cakewalk for the new president. Already, DDL’s contribution to factor costs has declined markedly.
A further examination of its external dynamics through trends in its gross profit margin also suggests that the company has much to contemplate. The biggest challenge is managing the customer and vendor relationships. What happens at that point in the business determines to a large extent what happens in the rest of the organization. The revenue that a company earns is influenced by many factors, but the ultimate determinant of revenue growth is customer behaviour. A company must be able