ABSTRACT

This chapter considers, in particular using techniques developed within the retail sector, how the strategic profitability of retail organisations can be influenced and controlled from the operation. Within the retail sector, two approaches are currently being used for the optimisation of the cost effectiveness. These methods include the techniques of Direct Product Profit (DPP) and direct assortment profitability. DPP has become possible thanks to the rapid development of information technology. This allows the retailer to perform a large number of calculations in a short time. The ‘real’ DPP systems are hardly applicable in the non-food sector. The trinity model is a system that is inspired by the Dupont model of financial performance. The Dupont model not only looks at the final bottom-line profitability of a company, but also tries – by providing connections between the various financial ratios – to determine which key success factors influence the profitability.