Business decision making - Essay Example

BUSINESS DECISION MAKING al Affiliation: BUSINESS DECSION MAKING Modes In the results obtained from the research, there were instances when certain figures appeared more frequently. A good example is the fact that some of the questions asked depicted distinctive patterns I the market as most were answers scored over 5. This showed that the market is strongly opinionated as customers are highly responsive to quality and affordability. Range According to the study conducted, the range of the particular responses is essential in determining how widely dispersed the responses from one another.

This is important in determining whether the market is strongly opinionated or indifferent to a given aspect of the company, its products and its competitors. When it comes to the question of the preferred sports band, the range is 6-1 = 5. This is a much larger range showing the market is strongly opinionated when it comes to their preferred sports brand. However, when it comes on the question of the most ideal expenditure on sports equipment, the range was 3-2 = 1. Meaning the market’s opinion on this issue is affected by other numerous variables.

Dispersion: Standard Deviation Obtaining the standard deviation on the results on the most ideal expenditure on sports equipment; Sample; 3, 2, 2, 0 Mean: 7/3 = 2.33 The square of the differences between each data point and the mean: 3 - 2.33 = (0.67)2 = 0.4489 2 – 2.33 = (-0.33)2 = 0.1089 2 – 2.33 = (-0.33)2 = 0.1089 Square root of the mean of the values obtained above: Population Standard deviation is 0.03334 Quartiles A quarterly is one of the three points that split a data set into four equivalent sections.

Namely; (1) The first/lower quartile, (2) The Median and (3) the third/upper quartile. Quartiles are essential in the design and manufacturing of the products specific to customer and market data and information. This is because the company’s products are manufactured founded on a data driven process. This is essential in improving the production process. Quartiles are essential in the analysis of variability which can be used in benchmarking certain aspects of the company’s production processes.

This can be used to identify and consider any differences in processing times for given production sections. This is essential in instituting best practices that ensure maximum utility from the resources available for the production process. This can be achieved through the use of the Interquartile Range (IQR). As mentioned above, quartiles will be used in minimizing the amount of time that is consumed in the production process to ensure a faster and leaner production process. This will be achieved by taking the Interquartile ranges of the different production stages.

The company has identified 20 distinct production areas, from fabric sourcing to pressing, tagging and packing product. The interquartile range will be used to determine which production areas consume the most amount of time, making such areas leaner. Correlation Analysis Correlation analysis is the measurement of the extent to which two distinct items, or in this case, production or economic items, are related to each other. Correlation analysis is essential in identifying and determining the extent to which certain factors or variables affect the production process and/or the company’s profitability.

One can determine the strength or the extent to which certain variables are related. This is the ‘coefficient of correlation’. This helps the company predict how certain changes in certain variable will affect other variables. This is essential in maintaining a low cost of production but ensure efficient production and maximized profits. By forecasting or predicting changes, the company can adequately position itself, in terms of resources, to adopt to those changes while still realize considerable profits.

The company can also find correlation analysis to be crucial to understanding consumer behavior. This will be essential in helping the company develop products that the consumer can easily relate to, increasing marketability. Correlation can also be used to manage a company’s profitability by developing policies to mitigate and manage certain costs of production and other variables that have a negative correlation with profits. A good example is conducting a correlation analysis between the different factors of production and determine how each factor affects the other.

A good example is level of education of staff and the quality of the final product. This is essential in determining the extent to which the company will hire skilled labor. Tis determines the cost of labor, an essential variable of production. Correlation Coefficients This is the number that signifies the strength of the relationship between two variables. This is the extent to which two variables can change each other at the same time. This is essential in determining the variables that are most likely to either increase profits, through a positive correlation, or reduce profits, through a negative correlation.

The correlation coefficients A good example would be to find the correlation coefficient between quality of material and rejected finished goods. This will help determine whether the quality of the material used affects the amount of material and/or products that go to waste at the end of the production process. This is essential in minimizing wastage and increasing quality in the finished product. Q6 LO3 3.1 Number out of sample %age Sex Male 6 85.72% Female 1 14.28% Age Group 14-22 6 85.

72% 22-38 0 0 38-46 0 0 Over 46 1 14.28% Plays Sport Significantly 3 42.86% No 1 14.28% Sometime 3 42.86% Rarely 0 0 Sport Played Badminton Football Squash Rugby None Purchase athletic equipment Yes 5 71.43% No 2 28.57% Both 0 0 Sport equipment expenditure Under 10 3 42.86% 10-30 2 28.57% 30-5- 2 28.57% Over 50 0 0 Frequency of purchase of sport equipment Once a month 1 14.28% Twice a month 0 0 Once a year 0 0 Depends on need 6 85.72% Preferred Sports Brand Nike 6 85.72% Adidas 0 0 Puma 0 0 Other: 1 14.

28% Brand sport equipment vs. cheap sport equipment Brand 3 42.86% Cheap 1 14.28% Both are ok for me 3 42.86% Convenience of our brand sport equipment Very convenient 1 14.28% Moderately convenient 4 57.15% Slightly convenient 2 28.57% Not at all convenient 0 0 Quality of our brand sport equipment Somewhat better 1 14.28% Slightly better 2 28.57% About the same 4 57.15% Slightly worse 0 0 Preference of shop in close proximity to area of residence Yes 6 85.72% No 1 14.28% Allowable distance to store 15 minutes 2 28.

57% 30 minutes 3 42.86% 60 minutes 1 14.28% Owns a smartphone Yes 7 100% No 0 0 Purchases sport equipment using phone app Yes 0 0 No 7 100% Gender According to research using the given sample, it was found that most of the potential clients (86%) are men. This means that there is a very little or small market for women’s sportswear. As a result, this means that the company can potentially venture into the development of a female line of sportswear that will be complemented by an aggressive marketing strategy.

The aggressive marketing strategy will specifically target young women who are predominantly conscious about their physical appearance. Age Group Most of the company’s potential clients (86%) belong to the 14-22 yrs. age group. The company will therefore have to tailor their product to suit and appeal to this age group. This also means that the company’s pricing strategy will have to be tailored to fit this age group. This can be shown by the fact that most of the prospective clients are willing to spend below £10 on sport equipment.

This means that the company will predominantly focus of production of mainly affordable products. The company’s marketing strategy will also be geared towards attracting a physically active and energetic market segment. This will also be supplemented by the fact that most of the prospective clients either play sports significantly or occasionally as shown in the graph below. Play Sport Sport Equipment Expenditure Preferred sport equipment brand Most of the prospective clients either explicitly prefer branded sport equipment or can use wither branded sport equipment or cheap sport equipment.

This is largely due to the age group being 14-22 years. This age group also prefers Nike sports equipment to all other equipment in the market, posing Nike as the company’s chief competitor. Preferred Sport Equipment Convenience of Company Company’s Sport Equipment Quality Most of the company’s prospective clients rate the company as moderately convenient. This means that the company still has room to improve its services to the potential customers. The clients also rated the company’s quality as about the same as the existing sportswear products in the market.

Tis also shows room for improvement on quality where needed. Use of Smartphones Most of the company’s prospective clients have smartphones but do not purchase any of their sport equipment using an application (app). This highlights a potential opportunity for the company by developing a smartphone application that allows their clients to access a database of all the available sports equipment within the company’s retail shops, their prices and the procedure for ordering and receiving delivery of their desired products.

Future Market Trends The sportswear retail industry has slowly been experiencing some changes in the past few years that are expected to continue in the foreseeable future. According to the CDC, courtesy of the National Health Interview Survey, there is a considerable increase in the active participation in sports and sporting activities. One interesting fact is the increase in sport participation in the over-55 age group. This has led to the change in lifestyles around the United Kingdom. This is depicted in the graph below as the number of elderly individuals receiving advice about exercising from physicians.

(Barnes & Schoenborn, 2012) There is a considerable increase in the participation of women in sports. These include aerobics, and other outdoor sports such as jogging and hiking. This will potentially increase the market base to be considered in the development and sale of its sportswear products. The industry has also experienced the positive effect of the introduction of technology and its use on the development, marketing and sales of sportswear within the country. The company will therefore have to invest in the modern technology and employ qualified professionals to design and market their products.

References Barnes, P. M. & Schoenborn, C. A., 2012. Trends in Adults Receiving a Recommendation for Exercise or Other Physical Activity From a Physician or Other Health Professional, Hyattsville: National Health Interview Survey. Bryman, A. & Bell, E., 2011. Business Research Methods. 3rd ed. Oxofrd: Oxford University Press. Datamonitor, 2013. Textiles Industry Profile: United Kingdom. London: Datamonitor. Ghauri, P. & Grønhaug, K., 2005. Research Methods in Business Studies: A Practical Guide.

Harlow: Prebtice Hall. The Textile Institute, 1995. Specials Interest Groups - Sportswear and Leisurewear: Understanding the Present and Forecasting the Future. [Online] Available at: http://www.texi.org/SIGS_Sportswear.asp [Accessed 2 June 2014].