BUSINESS

ANALYSIS
AND
STRATEGY Why is data often presented in
picture form rather than as
raw data?

Are there any disadvantages

to this?

List 5 examples of data

generated by a business.

DATA ANALYSIS
 DATA ANALYSIS

 In this topic you will learn about

 Present, interpret and analyse data, including pie
charts, histograms and index numbers
 PRESENT, INTERPRET AND ANALYSE
DATA

In year 1 you  Data is information i.e. facts and figures that have been
studied marketing
data i.e. market
collated in a way that allows them to be used to inform
share, size and decision making
growth.
 In business, data is presented on a day to day basis as well as at
How would you
present each of key points throughout the year, this includes:
these in
diagrammatic form?  Daily sales against targets
 Daily output and faults
 Machine hours
 Sales by region
 Profit levels
 Annual growth
 PRESENT, INTERPRET AND ANALYSE
DATA

 Data presented diagrammatically is easier to interpret and

analyse than raw data
 Two methods of presenting data are pie charts and
histograms
 Pie charts
 A circle is divided into sections or slices, each section being
proportional to the data that it represents
 If the population was 50% male and 50% female the pie chart
would show two equal halves
 If the population was 60% male and 40% female the pie chart
would show 60% of the circle as male and 40% as female
 However pie charts are not really useful when there are just
two pieces of data, they provide a more meaningful visual
when there are multiple pieces of data e.g. sales by 10 stores
as a proportion of total sales
 PIE CHARTS

Crisps sold by a leading What does this chart show? Identify 3

manufacturer in 2016. points of interest:
•
•
•
How could this information be used?

If the total sales of crisps in 2016 were

500 000 packets 40% of these were
cheese and onion.
144/360 x 100 = 40%
500 000 * 0.40 = 200 000 packets sold
were cheese and onion.

How many packets of ready salted, chicken, prawn cocktail and salt
and vinegar were sold?
 PIE CHART

 Producing a pie chart (understanding the process to assess whether it is

time consuming/complex)
 Step 1 add up all the data (Y)
 Step 2 write one piece of data (X) as a fraction of the whole (X/Y)
 Step 3 turn the fraction into a decimal (X/Y = 0.Z)
 Step 4 multiply the decimal (0.Z) by 360 to find the angle (0.Z x 360)

 Example –market research results showing the price 2000 customers are
willing to pay
770 out of 2000 customers were willing
to pay between £10.01 and £15.00.
770/2000 = 0.38.
0.38 x 360 = 139 degrees of the chart.
 HISTOGRAMS

Histograms are  Histograms use rectangles to show how frequently an

different to bar
charts. Bar charts outcome occurs when the data intervals are successive
are used when e.g. number of employees from 0 to 50
the outcomes
show categories
e.g. how many What does the histogram
cars were red,
blue or white. show?
100 employees earn more
then $88 000 a year.
550 employees earn between
$44 000 and $54 000 per
year. This is the most
frequent salary bracket.

Use the histogram to make 2 other points.

How could this data be used?
 INDEX NUMBERS

An index measures
changes in a  Business leaders and economists frequently use index
representative group
of data. numbers when making comparisons over time

Indices are commonly

 An index starts on a given number e.g. year, the base
used in business in number or base year, at an index number of 100
order to analyse raw
data.  This is called the base period
Common examples  In subsequent years, percentage increases may push the
are the CPI, the RPI index number above 100 and percentage decreases push
and the FTSE 100.
the figure below 100
 An index number of 102 means a 2% rise from the base
year, and an index number of 98 means a 2% fall from the
base year
 INDEX NUMBERS

 Index numbers help to understand the

significance of a change
 They are easier to interpret than large numbers
 Percentage change = change/original x 100
 We always compare with a base number or year
Year Population % change Index
of country x Number
1 (base year) 1 147 569 100
2 1 846 227 61 161
3 2 213 904 93 193
 INDEX NUMBERS

Year 2015 2016 2017

Price of a good £10.00 £17.00 £15.00
Price index 100

Question: Find the price index for 2016 relative to 2015

Answer:
Current price x 100 = Index number
Base year price
2016: £17.00/£10.00 x 100 = 170
Question: A firm spent £5400 on a good in 2015. How much would it have
to spend on the same good in 2016?
Answer: £5400 x 1.70 = £9180
To do:
Question: Find the price index for 2017 relative to 2015
Question: A firm spent £5400 on the good in 2015. How much would it
have to spend in 2017?
 REAL WORLD USE OF INDEX NUMBERS

The importance of
CPI. 1. By how much did CPI change
between 2005 and May
2015?

2. By how much did CPI change

between May 2014 and May
2015?

3. What happened to CPI

between December 2014 and
January 2015? Can you
provide any arguments as to
CPI weights
why this occurred?
2001-2015.

Source: ONS
 INDEX NUMBERS

Source: ONS
1. Using 2012 as a base year produce a table showing index numbers based on
the above population figures.

2. Construct a weighted index using the figures for England, Wales, Scotland
and Northern Ireland.

3. Identify two significant points of comparison between the changes shown

in your index of population changes.
 DATA ANALYSIS

 In this topic you have learnt about

 Present, interpret and analyse data, including pie
charts, histograms and index numbers