Final answer:
A drop in Gross Profit Margin could be due to increased costs or changes in sales mix, and improvement could be achieved through a review of pricing strategies, supply chain management, and productivity enhancements.
Step-by-step explanation:
The drop in Gross Profit Margin from 29% in 2016 to 24.9% in 2017 could be due to several factors such as increased costs of goods sold, a decrease in sales prices, or a shift in sales mix towards lower-margin products. Based on historical data, between the end of the recession in 2009 through the second quarter of 2013, profits for the S&P 500 companies grew by 9.7% mainly through cost-cutting and reductions in input costs.
My recommendation to improve the Gross Profit Margin would include a thorough review of the company's pricing strategy, supply chain management, and cost structure. Strategies like increasing prices, if the market allows, improving productivity, and optimizing inventory management could help increase the profit margin. Additionally, investing in Productivity growth, such as through technological upgrades or process improvements, can result in long-term margin enhancement.