Archive for the ‘Forecasting’ Category

Save The Company Of The Future!

Innovators Stand Firm:A Modern Day David Vs Goliath

Looking around the internet yesterday, as researchers, things were a little different. Wikipedia was blacked out, Google had its logo blacked out and Twitter was alive with SOPA (Stop Online Piracy Act) talk. SOPA was created to promote prosperity, creativity, entrepreneurship and innovation by combating the theft of US property. However, opponents to SOPA argue that it will do exactly the opposite in that it violates freedom of speech, internet censorship and will therefore cripple the internet as we know it.

SOPA is a prime example of how big companies (especially within the music and film industry) are trying to do everything they can to stop innovation (so say the technology companies). Is this a modern day example of David Vs Goliath where the larger ‘Goliath’ companies are unwilling to accept change whilst the innovative companies and start-ups are encompassing change?

Larger companies typically innovate around business processes to take cost out of the system. However, innovation aligned with technological change that could involve turning the way a company carries out its business on its head is often rebuffed by large companies due to upheaval and uneasiness (with shareholder apprehension another reason)

Conversely think of the most successful modern day companies and most of these are technology companies eg Microsoft, Apple, Facebook & Google. These companies have rewritten industry rules in which they play, doing things differently to deliver value to the end customer. It is therefore no surprise that technology companies oppose SOPA as their roots are in start-ups where innovation is the main driving force behind their business success.

Innovation comes from experimentation and needs creativity and destruction in equal measure – in order to create you need to destroy what has gone before. So what if the Internet was censored – would this limit innovation? I think the answer is a resounding Yes! Technology has created a third state that allows us as individuals to work alone as well as together. The company of the future will be narrow (focused on one particular specialism), hollow (use partners instead of reliant on in-house skills), flatter (not as many levels of management), creative driven and international (borders don’t get in the way of business any more). Therefore, if the internet and social media are suppressed then so is the power of smaller businesses.

Thinking about what impact this might have on our economy, if we take the UK as an example and think back to The Big Society,which was the flagship policy idea of the 2010 Conservative Party’s general election manifesto, SMEs were identified as playing a fundamental role in getting the UK economy back on track. If SME growth is hampered in any way, this will impact greatly on the growth engine of the UK and result in slow progress in climbing out of the current downturn. Also, taking the land of the free (USA) as another example, innovation is at the heart of how they came to dominate the world. However, times are a-changing and China, with all their cost advantages, will quickly supersede them as the global superpower (if they haven’t already done so). Therefore, you could argue that the only advantage the US has over China is innovation and if legislation starts to hamper SMEs then growth will slowly grind to a halt.

Taking all this into account, what does it mean for the future? In one sentence, if we stop innovation and continue to do what we have always done then we will always get what we have always got….if we are lucky!

For information on innovation and new product development visit our website.

Posted in Forecasting, Innovation, New Product Development, Twitter |
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Virtual Reality

OK – so you might not be all that surprised when a company that organizes virtual events releases figures announcing that 60% of U.S. marketers plan to increase their spending on…you guessed it – virtual events. But it’s certainly hard to deny the increasing importance and influence that technology has on the way we all work and conduct business nowadays.

Unisfair’s research, conducted online last month with more than 550 marketers, also indicates that 42% of marketers plan to reduce spend on physical conferences and trade shows in the next 12 months. Highlighting the accessibility of virtual events, the study shows 27% of respondents to have attended these events from their beds, 11% from beaches or swimming pools, and 4% from airplanes!

Posted in Articles, Forecasting, Industry News |
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Understanding the Impact and Effect

In her latest Thursday Night Insight, Carol-Ann Morgan points out that our best intentions are not always quite as well received as we might hope.

In 1687, Sir Isaac Newton compiled his three laws of motion. The third law is commonly reported as…

 
“To every action there is an equal and opposite reaction”

 
Whilst these are physical laws governing relationships between the forces acting on a body and the motion of the body, and concern acceleration and mass, I wonder if Sir Isaac realised the full potential of his laws in the social and political arena.

The environmental story has been hovering around the top of the political agenda for some time now and, consequently, there is considerable attention given to the issues being debated in the press. However, we are having trouble grasping the arguments, as they are so equivocally defined and incalculable to the man on the street. Whilst experts argue amongst themselves as to the level of influence from our behaviours, and even the value of action, most of us are left confused as to what we should do next.

Excited by the idea of developing alternative fuels which reduce harmful emissions into the atmosphere and potentially threaten the long-term future of the planet, the growth of some crop-based biofuels has now been shown to carry some responsibility for recent global food shortages. Similarly, engines developed to reduce emissions appear to have created social tensions and increasing hardship amongst communities living and working around the platinum mines.

Examples such as these can be found all around us, and they demonstrate that there can be counter-reactions to most of our actions, particularly so in the commercial environment. These counter-reactions can be both positive and negative; delivering business opportunities or threatening our existing business operations or offerings. This is where research plays a strong role. Testing concepts and new business offerings in the marketplace can throw up any unexpected or unwanted reactions, which then prepare us for the future. Being in possession of this knowledge enables us to take advantage of new opportunities and also mitigate threats to the business.

Change and development are critical to the future of most businesses; spotting the needs of the future before they are in full view, and responding to them, is critical. However, Newton’s law serves to remind us to ensure we are aware of, and give due consideration to, potential unwanted consequences which may be harmful to the future security of our business.

Posted in Business Development, Carol Ann Morgan, Environment, Forecasting, Growth, Market Assesment, Marketing Strategy, Needs, Product Development, Strategic Marketing, Thursday Night Insight |
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China Continues To Fuel The World Economy

The World Bank recently raised its forecast of China’s economic growth rate to 7.2% in 2009 from its earlier forecast of 6.5%. It now projects GDP growth of the world’s third largest economy to reach 7.7% in 2010.

Better than expected economic data from China is likely to raise hopes that the world’s largest emerging economy could help to pull the rest of the world out of recession. The National Bureau of Statistics announced an 8.9% jump in industrial output in May 2009 compared with a 7.3% rise in April.

UK direct exports to China in April were down 9% from a year earlier at £468m, while direct imports were up 15 % at £1.52 billion. ¹

All this growth and positivity is on the back of the fact that due to global change from the current recession, China’s overall competitiveness in the world has slipped to 20th position when compared to 17th position in 2008. ²

If you are interested in market research in China then please visit our website at http://www.b2binternational.com.cn/English/

¹ HMRC – http://www.hmrc.gov.uk
² IMD Business School – http://www.imd.ch/

Posted in Alaric Fairbanks, BRIC, Business Confidence Index, China, Exports, Forecasting, Imports |
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Simple Steps To Successful Forecasting

Retaining loyal customers, generating turnover and responding to global competition are becoming increasingly challenging.  And the current economic climate doesn’t help as financial pillars appear to shake and stumble, draining confidence amongst businesses of all kinds. 

In times like these, it is crucial to remain focused.  Forecasts are a useful foundation for setting goals and KPIs based on predicted future sales and production, and adjustments to both production and marketing can be made in reviewing forecast figures and actual results.

Forecasts are nevertheless tricky to create as it is difficult to obtain reliable data and it is often impossible to predict the future beyond the short to medium terms.  Furthermore, the data gathered can be biased, out of date or flawed.

A recent article in the Wall Street Journal discusses the collaboration of company departments – chiefly the sales, production and marketing departments – in creating forecasts, and suggests seven rules companies can follow to make the most of collaboration in their forecasting efforts.  These can be summarized as follows:

1.  Involve senior executives.  Senior executives need to be on board, not only to achieve buy-in to the forecast, but also to approve and action spend on forecasting technologies that enhance the collection and sharing of data.  The author suggests:
   One way to get the attention of key executives is to calculate what a one-percentage-point improvement in forecast accuracy may mean to the company.  As supplies come closer to demand, customers can buy more, stores return less, and more revenue goes straight to the bottom line instead of paying for excess storage and handling.  For a large company, it could add millions of dollars to the bottom line.
2. Explain the mutual benefits.  Forecasting needs to benefit all those involved in the data sharing process.  The authors argue that whilst salespeople may want to focus on selling and not forecasting, the salespeople would however become interested if they believed that a more efficient supply chain would help make the product available according to customers’ requirements, thereby increasing sales commissions.
3. Clearly define goals and agreements.  Setting clear goals and metrics are paramount to increasing efficiency, especially of supply chains, such as reducing the number of days of inventory on hand.  The authors cite Procter & Gamble as an example: the company uses a scorecard that looks at on-time deliveries and the number of times a store runs out of a product, amongst other things.  The goals should constantly be reviewed to eliminate unrealistic expectations between departments and to determine whether goals are met, thereby enabling the most effective changes to be implemented and improvements made.
4. Use the best technology.  A central database is required to enable different parties to share data, such as sales, inventory and purchasing data (historical and current).  The best technologies should be used to capture, store and share this data.
5. Focus where revenue and profits are greatest.  Since resources are limited, companies should focus forecasts on products that yield more revenue and profits.  A deviation from this could result in staff devoting more time to less important and lower value products, rendering the forecasting a wasteful exercise.
6. Link incentives to companywide goals.  Incentives and rewards should be based on achievements of the company as a whole, as opposed to those of particular departments.  This enables effective and reliable forecasting, as opposed to deliberately low forecasting that is set too low with the aim of bettering predictions and therefore making a certain team look deceptively good.
7. Aim for continuous improvement.  It is crucial to continuously check the data to eliminate any errors that could contaminate the forecast, such as prejudiced assumptions or incorrect benchmarks.

Finally, we would like to add a further tip to successful forecasting.  The seven tips above are based on an inside-out approach, i.e. the view from within the company.  It would be beneficial to test forecasts from an objective standpoint, involving market and competitive intelligence.  For example, market research could be used to create comparable datasets (such as competitor forecasts or market forecasts as a whole), and this can be achieved through desk research, statistical extrapolation, and a select number of interviews with industry experts (such as large customers, trade associations, competitors and distributors). 

B2B International USA’s Business Development & Research Manager Julia Cupman says:

For more information on forecasting and how market research can add value, including different types of forecasts, the role of forecasts and forecasting methods, please take a look at our white paper: Forecasting and Scenario Planning.

Posted in Desk Research, Forecasting, Julia Cupman, Market Assesment, Market Intelligence, Market Research, White Papers |
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