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Archive for January, 2011

How to determine best practices by analyzing the market leaders

January 29, 2011 Leave a comment

Last summer a team of interns from a leading B-School in India – Indian Institute of Management Calcutta (IIM-C), developed a Competitive Landscape Analysis methodology at ZENeSYS.

Using this methodology, best practices and opportunity areas can be identified in any industry segment. Once these are known,  businesses can formulate a strategy to enhance their performance.  The methodology works by analyzing the market leaders in any given segment of the industry. Take for example ACME a manufacturer of 100W wind turbines as a case study.

The first step was to determine the market leaders in the 100W wind turbine market segment. The market leaders at the time of the study were as shown in Fig 1.

Fig1. Market Leaders

The next step in this methodology was to determine buyer preferences and vendor goals of this particular wind turbine market segment. These preferences and goals were determined by secondary research through product literature, white papers, industry reports, product reviews, blogs, news articles, and other indirect indicators such as sales figures, customer profiles and customer feedback.

Fig 2. Customer Preferences P1 to P6

The customer preferences P1 to P6 are listed in Fig 2. The goals of 100W turbine vendors are listed as G1 to G6 in Fig 3.

Fig 3. Vendor Goals G1 - G6

In the third step, we create a matrix by cross referencing the Vendor Goals and Customer Preferences as shown in the Synthesis Matrix in Fig 4. This matrix becomes a framework for analyzing each market leader (the vendors listed in Fig 1)

In the fourth and final step, research was done to see which market leaders were  able to address the customer preferences while realizing their goals. Which ever vendor is fulfilling this, their name was put into that particular cell as shown in the completed matrix Fig 4.

Fig 4. CLA Synthesis Martrix for 100W Wind Turbines

Now the interpretation of the populated matrix is quite simple. The cells in a column that show a lot of vendor names are the best practices and the ones that are relatively empty are the opportunity areas.

If we were advising ACME, here are two examples recommendations – one for best practice and one for opportunity area.

  1. Best Practice: Invest in R&D as this is being done by almost all the market leaders (look down in column G1 – almost every market leader is investing).
  2. Opportunity Area: Grab export market share (look down column G3).

ZENeSYS have delivered several engagements using this methodology with great results. No reason why you can try this analysis for your own industry segment. Of course our consultants will be delighted to do it for you.

For a full presentation of our CLA methodology, see our slidesshare posting here.

Competitive Landscape Analysis Consulting Case Competition @ ZENeSYS

January 29, 2011 Leave a comment

The following case competition starts today which is open to more than 590 members on the ZENeSYS consultant network at www.zenesys.org.

The objective of the completion is to demonstrate potential in researching and analytical thinking capability. Participants have been tasked with learning and applying ZENeSYS Competitive Landscape Methodology. This methodology was developed last summer by a team of IIM-C interns at ZENeSYS to identify best practices and opportunity areas by analyzing market leaders in any given segment.

The CASE: You have been hired by Sunrise Fashion Garments India Pvt. Ltd to help them with growing to the next level. Sunrise specializes in manufacturing designer clothing for women. Sunrise gets orders from designers, sources the material and manufacture the garments to specifications. Right now their sales is about 8 Cr in annual turnover by supplying to small fashion designers and small brand name retailers. They want a 3 year plan to grow three times in size. They need help with raising capital, build a new manufacturing facility and launch an aggressive sales and marketing campaign to accomplish their growth target. You work for ZENeSYS and plan to use their Competitive Landscape Analysis to determine the Best practices and Opportunities for reaching their growth target.

We will publish the winning entry here in 3 weeks time.

Custom secondary research is affordable and better than primary research

January 26, 2011 Leave a comment

According to Wikipedia, as of March 2009, the indexable web contains at least 25.21 billion pages. Google claims there are one trillion unique URLs.

Can you imagine the amount of information nuggets in web pages, blog posts, news articles, documents, discussions and social network chatter out there? Secondary research can tap into all that gold mine of information and make businesses rethink that “reliable market research only comes from primary research”.

Here are the drawbacks of Primary Research

  1. Sample size is never big enough
  2. Cannot guarantee that respondents are giving an honest answer
  3. Respondents may not be qualified or have the right exposure to provide answers

For the same drawbacks here are the benefits of Secondary Research on the net

  1. Sample size is practically limitless
  2. Answers can be cross verified e.g. homes with two car garages in a suburban area is a more accurate indicator of mean income than asking 100 respondents from that area about their household income
  3. When Apple wanted to determine the market size for iPhone I don’t suppose they asked the phone users if they would buy one.

Businesses should NOT ignore business schools

January 26, 2011 Leave a comment

An article in the Financial Times today reported that The Academy of Management claims research done by business schools is irrelevant. The three reasons quoted were that management is not a professional qualification second, its not a science and third, it tends to engage in the kind of research that universities expect them to. While the first claim may be true I don’t think the three reasons given are the reason why business schools are getting ignored.

In my opinion, business school faculty and students are a massive bank of mind power that is woefully untapped by businesses. Perhaps its the fault of the business schools that they are not marketing themselves properly to make the businesses community realize how much they can contribute.

Here are three good reasons why businesses should (and I speak more for the business school students since we work with them all the time) should be tapped for their research capabilities.

  1. Commitment: B-School students are hard working eager minds who have made a conscious commitment of time and money to learn business. In creative professions recognition is far more valuable than money. If artists were to enter profession for the money, there would be no art in this world.
  2. Environment: They have the time and perfect environment to think and be creative. Creativity has a certain spontaneity to it. If a management thinker can can hatch one idea in a week, we cannot take 5 and expect them to create one in a day – and most students we work with, work seven days a week!
  3. Resources: They have the resources and collective power of teams. Their access to online and offline information, academic mentoring and the community of friends to work in a team makes it ideal for researching and analyzing any issue under the sun that businesses are facing today.

Economizing Data Analytics – Private Equity Portfolio Optimization Case Study

January 24, 2011 2 comments

This was sent out in a recent ZENeSYS newsletter…

Up until now sophisticated analysis of data was the privilege of large institutional fund managers. Now technology and the Internet has leveled the playing field. Here is a case study on how this is taking place.

ZENeSYS has teamed up with AARMCORP to develop a platform that investors in Private Equity funds can use. Our first solution will be an implementation of Mean Variance Optimization algorithm on a PE fund  portfolio.

Balancing Act

This algorithm will allow investors to test their portfolios for maximizing returns. By making a peer group comparison of each new potential investment, the algorithm will make a call on whether to go ahead with that investment or not.

The determination will be made on whether the new fund is in the top percentile of its peers in terms of historical returns and whether it diversifies the risk in the target portfolio or not.

Fund managers will realize that this is nothing but an implementation of Markowitz’s theory of portfolio optimization. However, to be able to find all peer groups, make a comparison and test the diversity is not a trivial task even after assuming that all the comparison data were available to start with!

So how can it be done in an affordable manner? The answer lies in a shared platform that can be accessed over the Internet to run this algorithm using AARMCORP’s exhaustive database of PE fund performance data.

The sheer scalability of this solution reduces the cost of running each test for the price of a standard analyst report.

Image credits to Pete Ellis

Lack of early insights in startups impairs profitability

January 24, 2011 Leave a comment

Here is a Startup conundrum. “If startups knew today what they will find out five years later, they would reach profitability sooner”. If we plot a curve for two key indicators – operational cost factor (OCF) and clarity of vision (COV), it would look like this.

Improving efficiency with clairty of vision

At inception, the operational cost factor is high. Startups could be spending money on wrong things as the clarity of vision is poor. As clarity of vision improves slowly – mostly by trial and error, they become more efficient and cost of operations start to go down.

What can be done to improve this? The answer is simple. Study the market, take an objective view and make the necessary changes. This rarely happens because founders have a hard time justifying the money for market researchers and strategic advisers.

Are there are any recent founders out there listening, let us know what we need to do to convince you!

Sponor a Consulting Skills Competition to get your answer

January 20, 2011 Leave a comment

Do you have a market research question that you need answered?

Sponsor a consulting skills contest on our network of 600+ eager consulting fans from leading B-Schools and young professionals. The competition objective is to test the ability to use the tools and methods that is being taught at ZENeSYS. Expect around 20 to 25 contestants enter the competition. We will shortlist the 3 best entries and send it to the sponsor.

You the sponsor, decide the winner and enjoy the insights!

How to sponsor the competition

  1. In one sentence tell us what you are trying to accomplish.
  2. It needs to be a well defined goal or objective e.g.  you are a manufacturing firm looking to setup a new unit in a different country.
  3. Name 3 to 5 competitors in your industry
  4. Send an email to info@zenesys.org or see our website to see who we are

What to expect in the report

  1. A 25 to 30 page powerpoint report
  2. A set of best practice ideas for accomplishing the goal
  3. A set of opportunities and risks involved

How the Competition is Administered

  1. The assignment will be thrown open to more than 600 eager and motivated candidates.
  2. Approximately 20 to 30 candidates take up the challenge and work on the assignment.
  3. Out of the submissions, ZENeSYS will shortlist the three best submissions and send it to the sponsor
  4. Declare the winner (the best amongst the three)
  5. Sponsors keep all three reports

Cost of Sponsoring

  1. $ 500

Time to complete competition

  1. 4 weeks

Confidentiality

  1. Sponsoring organizations can choose to remain anonymous