Analytics
Transition Year
Module 1
What is…
Analytics uses maths and
statistics as tools to rationally
solve challenges in real-world
situations
How many Barber Shops are
there in Chicago?
This seems like a very difficult question to
answer, however, by making some
assumptions you can use reasoning, rational
and a little estimation to give an
approximate answer
Overview of Project
Module 1
Module 2
Module 3
Module 4
Overview
Introduction
to the
challenge
Using Analytics to
understand the
problem
Interpretation of
Analysis
New Company
Strategy and
Business
Report
Learning
Outcomes
1. Background of 1. Understanding
the company
Data
2. The Business
2. Applying
Plan
Analytics
1. Statistical
Techniques
2. Market
Segmentation
1. Forming a
Strategy
2. Completing
a business
report
Your Goals:
Gain an insight into a
career in Analytics
Gain insights into a
business and be able
to make informed
decisions
Expand upon
your existing
knowledge and
apply these skills
Video Placeholder
Please visit Accenture Ireland’s YouTube
page for the introduction video
Objective 1: Background of the Company
Seacláid Ltd. is an Irish
Chocolate manufacturing
company based in
Lisdoonvarna, Co. Clare
The company is owned by Seamus
and Laoise Fitzgerald, a brother and
sister.
The recipe for the products was
originally developed by Mary
Fitzgerald, the owners grandmother.
Key Facts:
25 Full Time Staff
Owns 1 delivery van
used to deliver all produce
to customers
3 Types of Chocolate Bar (Milk, Dark,
White) in 3 sizes (Small, Medium,
Large)
All chocolate is handmade and
expensive to produce
Ideals:
Good Customer Relations
Quality Handmade Goods
Seamus Fitzgerald
Seamus lives on the family farm in Lisdoonvarna.
He is married with two children and he hopes
that one day his son, Brian, will take over the
business.
His wife is also an employee of Seacláid Ltd. and
she is head of the Production team for the
company.
Seamus has a degree in Irish Studies with Arts
from NUI Galway. He is very proud of his home
grown business and recognises the marketability
of an Irish product.
Seamus sees the business being handed down to
his children when he and his sister retire. He
hopes the business will have expanded but still
have kept the true Irishness of the product as its
core value.
Laoise Fitzgerald
Laoise currently lives and works from Tallaght,
Co. Dublin.
Laoise is unmarried with no children and enjoys
the Dublin City life more than life at home in
Lisdoonvarna.
Laoise has a degree in Business with Marketing
from University of Limerick.
She is currently the manager of the Marketing
team for Seacláid Ltd. and keeps in contact with
the rest of her team via email and conference
calls.
In recent years Laoise has put a lot of pressure
on Seamus to break into emerging markets
however Seamus has been unwilling to take
these steps.
Current Pricing Structure
LARGE
MEDIUM
SMALL
Selling Price
€1.60
Production Costs
€1.15
Profit
€0.45
Selling Price
€2.10
Production Costs
€1.45
Profit
€0.65
Selling Price
€2.80
Production Costs
€2.05
Profit
€0.75
Short Analytics Puzzle
A closed system with three jugs is on a table. The first jug can hold 8 litres, the
second 5 litres and the third 3 litres. How can you get two 4 litres if you start
with a full 8 litres jug?
8 Litres
Jug # 1
Solution on the next page!
5 Litres
Jug #2
3 Litres
Jug #3
Short Analytics Puzzle
Yes, the water can be divided into two 4 litre portions:
( 8, 0, 0 ) 0: Beginning
( 3, 5, 0 ) Step 1: 5 litres from #1 into #2.
( 3, 2, 3 ) Step 2: 3 litres from #2 into #3.
( 6, 2, 0 ) Step 3: 3 litres from #3 into #1.
( 6, 0, 2 ) Step 4: 2 litres from #2 into #3.
( 1, 5, 2 ) Step 5: 5 litres from #1 into #2.
( 1, 4, 3 ) Step 6: 1 litres from #2 into #3.
( 4, 4, 0 ) Step 7: 3 litres from #3 into #1. DONE!
Objective 2: The Business Plan
A Business Model
Cost Structure
Cost structure is the expenses and costs when manufacturing a product or
providing a service. The cost structure is a balance between fixed costs and
variable costs. Cost Structure is core in balancing Key Resources, Key Partners and
Key Activities. The four main types of cost are:
Transaction Cost
(A Variable Cost)
Transaction cost is a
cost incurred when
buying or selling
goods.
e.g. Bank and
administrations fees
Marginal Costs
Sunk Costs
(A Variable Cost)
Cost already occurred
The change in the total
which cannot be
cost that arises when recovered in the future.
the quantity produced
e.g. Buying a new van
changes by one unit.
for deliveries
e.g. Cost to produce one
more item.
Fixed Costs
A cost that does not
change depending on
production or sales
levels.
e.g. Rent, property tax
and insurance.
Key Partners
Key Partners are the people who have invested in the company, this can be time
or money. Key partners can be divided into
two groups: Partners & Stakeholders
Question time: Do you know who the founder of Facebook was and is
he/she a partner or a stakeholder?
Key Resources
Key resources are the resources needed to provide value
to the customer. They are seen as an asset and they are crucial in sustaining and
supporting the company e.g. factory, employees
Key Activities
Key activities are the crucial process involved in delivering the finished product
to the consumer.
This would include making the product but it is also the activities that you do
to attract, nurture, educate and sell to potential and existing customers.
Question time: If your company doesn’t have a physical product, e.g.
Google, what are your key activities?
A Business Model
Revenue Streams
A revenue stream is any form of income into a company, business or individual.
All profit-orientated businesses sell a product or service to generate a revenue
stream and there are two main types of revenue:
One-Time Revenue
Recurring Revenue
A once off payment
from a customer
A recurring payment
from a customer,
usually periodic
(weekly, monthly, etc.).
Revenue streams are core in balancing channels, customer segmentation and
customer relationship.
Question time: If you had a company, would you rather focus on getting
one-time revenue or recurring revenue?
Channels
In business, a channel (or distribution channel) is a method to get your product
from the manufacturer to the customer. There are two main types of distribution
channel: Direct and Indirect.
Customer Relationships
Customer Relationship Management, known as C.R.M., is the process of building
and keeping an active consumer base which continues to purchase or subscribe
to your product or service.
Customers are the biggest asset to any company, without them companies
wouldn’t have much use. There are a number of ways of retaining customers and
adding new customers
Customer Segments
To build a companies customer base, you need to understand the different
types of customer there are. This can be accomplished through customer
segmentation.
A Business Model
Value Proposition
What makes these products so desirable?
A value proposition is a business or marketing statement that shows the
value that the product or service offers the customer
Each of the products below all target their specific audiences by promising
the customer a high performance product which has some competitive
advantage on the market.
Value proposition is achieved through a balanced combination of the business
models core values, cost structure and revenue streams.
How Analytics Affects the Business Model
•
Cost Structure
–
•
Key Resources
–
•
Seacláid Ltd. wish to evaluate the performance of their staff, analytics can be used to
identify how the staff have performed over a period of time to decide who deserves
promotions or pay rises
Key Partners
–
•
Seacláid Ltd. decide to produce 100 extra bars a day, analytics can be used to determine
the marginal costs involved in an increase in production
Seacláid Ltd. Is trying to establish which raw resource provider is the best company to
forum a partnership with, through analytics they can compare and contrast each
company and choose the most appropriate partner
Key Activities
–
Analytics can be used to identify the time taken to complete each of Seacláid Ltd. core
activities per unit produce and establish where this time can be reduced to improve
output e.g. Packaging and Baking
How Analytics Affects the Business Model
•
Revenue Streams
–
•
Customer Relationship Management
–
•
Analytics can be used by Seacláid Ltd. to identify the demand for each chocolate bars
flavour and size to insure the customers are receiving what they are looking for and
Seacláid Ltd. resources are handled effectively
Channels
–
•
Seacláid Ltd. wish to establish the percentage revenue they receive from each chocolate
bar according to size and flavour, analytics can be used to identify this
Seacláid Ltd. Wishes to utilise the cheapest and most cost effective method of delivering
the product to the consumer this can be solved through analytics by comparing all
available distribution methods.
Customer Segmentation
–
Using customer information gathered Seacláid Ltd. can identify the target audience and
implement an appropriate advertising campaign for the chosen market
Business Model - Re-cap
Cost Structure - Expenses when producing a product or providing a service.
•
•
•
Key Resources - The resources needed to provide value to the customer
Key Partners - Separate business which an alliance has been formed.
Key activities - the crucial process involved in delivering the finished product.
Revenue Streams - A revenue stream is a form of income into a company.
•
•
•
Channels - Consist of the methods of product distribution.
Customer Segmentation - The breakdown of the market into
specific segments.
Customer Relationship - involves building and keeping an
active consumer base.
Value proposition – The marketing statement that summarizes
why a consumer should buy a product or use a service.
Business Model Exercise
•
Try and organise the following attributes of Seacláid Ltd. with their
corresponding business model category:
•
Remember the categories are:
Key Resources
Key Activities
Customer Segmentation
Key Partners
Customer Relations
Value Proposition
Channels
Delivery Van
Seamus & Laoise
Chocolate Recipe
Raffle
Channels
Key Partners
Key Resources
Customer Relations
Advertising
High Quality Homemade
Goods
Customer
Segmentation
Chocolate
Manufacture
Value Proposition
Key Activities
Next Week: Using Analytics
•
Understanding Data
•
Applying Analytics