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Business Analysis

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Business Analysis

Copyright 2006 Biz/ed

http://www.bized.co.uk

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
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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

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Data

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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

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Trends
Looking for patterns in data collections Frequency and reliability of trends Impact of external factors, e.g. seasonal variation, random events, cyclical trends

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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

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Averages
Mean = Sum of items in the series/number of items
X = x x Median = middle number in a data series 0.5 (n+1) Mode = the most frequently occurring value in a data series
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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
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The Standard Deviation

S=

(xi x )2 n

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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
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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

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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

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Forecasting

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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

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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
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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

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