Strategic Business Decisions For Blue Detergent In 2022 - Essay.

Market share of competitors (figure 1)

The report herein seeks to present an analysis of the year 2021 simulation report to deliberate on strategic business decisions for the year of 2022 via a data analytical approach and forecasting of Blue Detergent. Specific areas under consideration include the following; market share, pricing of Blue Detergent products, and product pricing among others.

Figure 1: Market share of competitors

The graph in figure 1 above illustrates the distribution of the market share of Blue Detergent’s competitor. In principle. The market share for Blue Detergent has a downward trajectory from 10. 8 in 2020 to percent to 9.4 percent in the year 2021. It is further projected that the company’s market share stands at 9.7 percent for the year 2022. This outcome illustrates the poor competitive power of the organization when contrasted against its competitors such as Turbo, Fresh, and Store. The efforts of the firm to boost its market share remain futile necessitating the radical implementation of unique competitive strategies.

Figure 2: Demand-Price and Elasticity Projection

Figure 3: Elasticity Analysis

The Figure 2 price point and the market demand show a declining elasticity line.  It can be found that the company with higher prices has higher level of demand.  According to the elastic analysis that has been carried out between the demand of $5 or less and $9 or higher, the price elasticity was found to be -1.11. The negative value of elasticity shows that demand declines with the increase in the price of detergent. It has been found that increasing the price by $1 can reduce the demand by 1.11%. Blue detergent should not increase the price to ensure adequate demand for their product.  

Figure 4: Forecasted Demand for different formulations in 2021

As per the data projection and estimated forecast, it has been found that the demand for the Pods is maximum, Liquid is Moderate and Powder is lower. The linear equation of the data projection shows that the coefficient of Liquid and Pods are high and therefore, the growth of demand is higher for these two formulations.  Therefore, Blue Detergent should continue with the Liquid detergent products. It has been further found that the company has to produce more than 168 million units of product to meet the potential market demand of 2022.

Figure 5: Demand for detergent as per Geographical Location

From the geographical distribution of demand for 2018, 2019, 2020, and 2021, it is evident that maximum demand is experienced in Washington, North Dakota, Missouri, Nevada, Louisiana, Mississippi, Indiana, Alabama, and South-Carolina.  Hence, Blue Detergent should focus on these locations for strengthening its supply chain.

Figure 6: Historical Forecast of Cost Allocation, Revenue, and Profit

To understand the impact of the business decision on the business outcome all types of cost are chosen as independent variables and revenue as well as the operating profit are chosen as the dependent variable. To understand the impact of cost on business outcomes the data for 2015 to 2021 has been fetched and presented in figure 6.

Demand-Price and Elasticity Projection (figure 2)

Figure 7: Correlation of Costs, Revenue, and Operating Profit

The Pearson’s correlation statistical analysis has been conducted to understand the association between the costing and profitability and revenue. It has been found that there is no correlation between fixed cost and profit. However, the association between the variable cost and profit is very high (0.87). Therefore, Blue Detergent has to increase its variable costs such as advertisements and marketing-related costs for increasing profit.

Figure 8: Trade channel demand projection

As per the result of figure 8, the demand for the Convenience stores and Clubs is maximum and it is increasing strongly. Hence, Blue Detergent focuses on Convenience stores and Clubs while strengthening the distribution channel with increasing sales.   

Figure 9: Media Channel consumption projection

As per the result of figure 9, the consumption of print media is maxim followed by the TV. Therefore, more investment on TV and Print-based promotion will be required to ensure customer acquisition.

Figure 10: Social Media Review and Sentiment Analysis for 2020

Figure 10 above illustrates that 40% of review of social media is positive and 18.9 percent is neutral. Approximately 40 percent of the social media reviews are negatively or fairly negative. This observation further implies that the social media reviews should be considered for market decisions in order to resist the negative marketing on social media. 

I utilized what I learned from last year’s project to guide my work on this current business analytics project. It allowed me to apply many of the skills I had already developed and build upon the hard lessons learned from last year. In the previous year of the business analytics assignment, I was able to conduct a simulation where I managed a company that produces and sells products with global demand. In this simulation, data is generated to help keep track of manufacturing costs and inventory levels, sales and costs information as well as get demand forecasts from buyers. It also helped me see how well my company is performing by comparing my company with other companies in the same industry. This helped inform decisions in our current round of assignment where competition increased and my company was able to forecast better its production volumes so as not to produce excess stock which may lead to increase in holding cost.

A number of crucial lessons were learned during the completion of this particular assignment. The primary purpose of analytics is to leverage data for business decision-making, such as determining its optimal price, products to be displayed in the ads, or notification timing. It is of pivotal importance that businesses make use of insights derived from data analytics rather than performing manual analysis relying on their gut feelings. As opposed to manual analysis which would take weeks or months, using business analytics tools can visualize the relationships between different attributes in minutes if not seconds which would assist the incumbent in understanding and effectively utilizing opportunities hidden within his/her data. In other words, analytics are critical for organizational success as they help set apart successful businesses.

Conversely, analytics allows for the exploration of internal data and provides insights to companies that may have stayed hidden otherwise. In addition, analytics allows organizations to create more efficient and helpful workflows that further help the success of the company. By using analytical methods, the business can make data-driven decisions to steer the course of their organization. Including analysis of the sales of their products, customer demographic, and marketing campaign effectiveness. The use of analytics can help business to increase their revenue while decreasing waste. Cost reduction is something that every company strives for and using properly analytics can help them achieve it.

Decisions can be empowered in a better way with the help of analytics. Decision making through analytics yields better results with lesser chance for risks and errors, provided it is implemented well with good information. A company or an organization works towards its dream through strategic decision making. In the process, variety of options are studied and considered for delivering value to the stakeholders. Analytical Process when used in strategic decision making, helps to take on a more organized approach. It can identify, evaluate and select the best course of action by considering the constraints, boundaries and available resources.

The last lesson learnt is premised on the fact that analytics informs and supports business decision-making. To analyse transactions and customer behavior, a business must first have data to analyse. In online businesses, much of the necessary data is automatically captured by the ecommerce platform. The analysis is often presented visually, to highlight patterns and trends that may not be apparent in a table of raw numbers. This visual analytics approach allows decisions to be made quickly and easily, based on what is happening now. When an analytics dashboard identifies a problem or opportunity, the business can respond quickly before it is too late.

It is crucial that the spending on digital advertising be increased to leverage more on the flexibility and gains offered by the approach. Digital ads are versatile and can be used for anything from branding to getting leads. With digital advertising, it is possible to target by demographics, location, and interests, but also by audience behavior (web browsing) to make sure that the intended message is spot on.

Conclusion

It can be concluded that Blue Detergent should improve strategy to increase their market share. The company should not change their price. The company should continue with the Liquid detergent while making 167 Million products to meet the demand of 2022. The company should strengthen their supply chain in North Dakota, Washington, Nevada, Missouri, Louisiana, Indiana, South-Carolina, Alabama and Mississippi through strengthening Convenience Store and Club based supply chain. The company should increase investment on variable costs to enhance profitability through investing more not only on print media and TV based advertisement but also digital ads.