Business Analysis

Business Analysis

Business Analysis

Business Analysis

• Purpose:– Identify where the business stands in

relation to rivals, etc.– Collect and use data to inform

business decision making– Identify strengths and weaknesses in

the business– Use information to inform strategic

planning

Business Analysis

• Method:• Collection of data from a range of

sources:• Market research• Past sales data• Market growth data• Specialist analyst data• Secondary data, e.g. Mintel

Data

Analysis• Range of methods used to analyse data:• Trends

– Growth rates– Nominal– Average

• Mean• Median• Mode

– Variance• Standard deviation• Range

– Time series analysis– Scatter graphs

• Correlation

Trends

• Looking for patterns in data collections

• Frequency and reliability of trends• Impact of external factors, e.g.

seasonal variation, random events, cyclical trends

Averages

• Averages are a measure of central tendency – the most likely or common item in a data series

• Calculated through 3 measures:– Mean– Median– Mode

Averages

• Mean = Sum of items in the series/number of items

X = Σx x

• Median = middle number in a data series – 0.5 (n+1)

• Mode = the most frequently occurring value in a data series

Variance

• Averages have limitations – measures of data spread used to assess width

• Range – difference between the highest and the lowest value

• Standard Deviation – used to measure the variance of the data set from the mean – can highlight how reliable the mean is as being representative of the data set

The Standard Deviation

S =Σ (xi – x )2

n

Correlation

• The degree to which there is a relationship between two or more random variables

• The closer the relationship the higher the degree of correlation

• Perfect correlation would be where r = 1

Time-Series Analysis

• Used to analyse movements of a variable over a time period – usually years, quarters, months, etc.

• Importance of assessing the:– Trend– Seasonality– Key moments– Magnitude

Presentation

• Graphs• Charts• Tables• Index numbers – Method of showing average

changes in large amounts of data– Laspeyres – Uses a base period weighting

measurement– Paasche – Uses a current price weighting

measurement

Forecasting

Qualitative• Focus groups - a group of individuals selected and assembled by

researchers to discuss and comment on, from personal experience, a topic, issue or product

• User groups – similar to focus groups but consisting of those who have experience in the use of a product, system, service, etc.

• Panel surveys – repeated measurements from the same sample of people over a period of time

• Delphi method – calls on the expertise and insights of a panel of experts to help with forecasting – seen as being more reliable than data analysis only– Could be drawn together from around the world as there is no

need to have people together at the same time• In-house judgements – Use the expertise and judgements of those

involved in the business in aiding and making judgements

Quantitative

• Makes use of all the statistical data collected by the firm and by other firms/organisations to help inform decision making– Surveys– Sales data– Impact on sales

• Primary data – collected by the firm themselves

• Data collected by others and used by the firm, e.g. Office of National Statistics (ONS), Gallup, Mori, Mintel

Forecasting

• Advantages and disadvantages:• Data from several years can give

accurate guides to future performance• Statistical techniques can make the

data informative and useful• All depends on the quality of the data

and the accuracy of the techniques used to analyse the data

Business Analysis

Business Analysis

Data

Analysis• Trends

– Growth rates– Nominal– Average

• Mean• Median• Mode

– Variance• Standard deviation• Range

– Time series analysis– Scatter graphs

• Correlation

Presentation

• Graphs• Charts• Tables• Index numbers

– Laspeyres– Paasche

Forecasting

Qualitative

• Focus groups• User groups• Panel surveys• Delphi method• In-house judgements

Quantitative

• Surveys• Sales data• Impact on sales