Strategic Value of Data

How to think strategically

Lecture by Vic Matta, PhD

College of Business, Ohio University
http://cob.ohio.edu/Matta
Based on Visual Business Intelligence by Stephen Few

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 Agenda
• Common questions
– Course questions
– Content questions
• Module 1 content
– HW1A scenario
– HW1B scenario
• Sample assignments
– Discuss

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 Course Questions
• Deliverable formats:
– HW1A: 1 PPTX slide
– HW1B: 2 PPTX slides
• Analysis
– Extent needed, outcomes are based on Visual exam
– Differences, Regression, ANOVA, Clustering
• How to do well in class
• VOH
– Not mandatory
– Participation lowest first
• Quiz questions
– Best, most questions

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 Content Module 1 overview
Questions
• Strategy
– Tactical (as operational),
– (identifying
direction, justifying why)
• EDA - play
– versus Statistical tests
– Why run, relationships
– Visualize
• Application
– Multivariate/Bivariate
– Which clustering?

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 HW1A Scenario
Your boss: Here's a link to a data set, give me a one slide
strategic proposition for our board meeting.
You: can use any resources given to you, one or more data files,
descriptors, etc. to make a proposition. Constraint: 1 slide, non-
redundant, strategic, subtitle, evidence that supports, summary
that explains and concludes without redundancy.

Evidence (EDA) = visualization, stats work earns NO extra credit

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 HW1B Scenario
Your boss: Demonstrate that you can develop a complex strategic
argument for any data set of your choice.
You: Same conditions as before for slide #1. Include slide #2 to
provide a link to your dataset and discuss the process.

Evidence (EDA) = visualization, stats work earns NO extra credit

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MAXIMIZE RENTAL REVENUE WITH
MAINTENANCE EFFICIENCY

FOCUS BIKE MAINTENANCE DURING WINTER MONTHS AND EARLY

MORNING HOURS TO ENSURE SUPPLY IS AVAILABLE WHEN DEMAND IS HIGH

MAXIMIZE MAINTENANCE TEAM STAFFING DURING THE WINTER MONTHS

AND EARLY MORNING HOURS TO ENSURE BIKES ARE ROAD READY FOR
PEAK DEMAND SEASONS AND TIMES.
 Effective Demand Generation Year Round
Description – This graph shows the percent of total Description – This graph shows the % of total riders per
number of riders per season for 2011 and 2012. hour in the Spring months in 2011 and 2012.

# of Riders per Season Spring % of Riders by Hour

40% 12%
35%
10%
30%
8%
25%
% of Total

20% 6%
15%
4%
10%
2%
5%
0% 0%
Spring Summer Fall Winter 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Casual Registered Casual Registered

Insight - Only 10% of casual riders and 15% of registered Insight – The number of registered riders peaks at 8am
riders rode our bikes in the spring seasons. We can whereas the number of casual riders starts to tick upwards
identify spring as the worst season for demand around 10am. 1 hour before these times will be
generation when compared to all other seasons. considered as optimal times to send notifications to riders.

Conclusion – In order to entice customers to ride more in the spring (our worst performing season), we should send
targeted notifications to riders to save 10% of their total rider fee. In order to maximize the effectiveness of the
notification, we should send casual riders a notification at 9am and registered riders at 7am.
 Seasonal Bike-Sharing for 2012
The bike-sharing rental process can depend on the seasons and average "feel" of the outside temperature. The graph on the left shows the
relationship between the number of riders per season for Registered and Causal riders compared to the average Normalized Outside Temperature.
The graph on the right looks at the average hours rode per season for each group while looking at the average Normalized Outside Temperate.

Graph Explanation: The number of riders, both Registered and Casual, is Graph Explanation: The number of season hours rode for both Registered and
directly related to the season. Furthermore, the Normalized Outside Casual, is directly related to the season and average Normalized Outside
Temperature is also related to the number of bike riders each season. Temperature. The daily hours rode are the highest in the Fall and lowest in the Spring.

Results
There is a correlation between the seasons and the number of riders, and the average hours rode per season. By knowing that more bikes are
ridden in the Summer, Fall, and Winter seasons, we can better predict the demand needed for those seasons. Also, now it is clear that bikes
can be serviced during the Spring season as the demand is almost half that of the Summer, Fall, and Winter seasons.
 GROWING THE CORE, EXPANDING THE EDGE

Identifying the core business is essential in creating a strategic proposition.

Registered bike users account for over 80% of total rides from the given
dataset.
Registered Riders Casual Riders
Grow the core. Expand the edge.
Are there patterns in ride times of registered bike users? A graph of registered bike users by hour by weather Are there peak seasons for casual riders? A graph of casual bike
situation (excluding hazardous weather) is examined to identify potential areas of opportunity in growing the riders by hour by season is presented in order to identify patterns in
core business. casual use.

Season
Weather Situation

Edge Evidence: Casual riders have a gradual incline in use throughout

Core Evidence: Registered riders peak during typical travel times to work; however, the lunch hour in both agreeable
the day, increasing through 1PM and declining after 5PM with
weather situations only sees a slight increase.
seasonality having a strong influence on bike rentals.

Insights and Next Steps: Possible opportunities for growth in the core business are identified as the lunch hour, 11AM-2PM. Increased casual ridership in
spring and summer months suggests opportunities for seasonal marketing campaigns to target the casual rider segment.