Discuss about the Revenue Sharing in Dairy Industry.
There has been a remarkable evolution in the entertainment industry with the introduction of Video Champ, a movie rental company in Australia. The company is known for offering services that are customer friendly that customers can avail by paying a reasonable fee and at their own disposal. The company believed in sensitive pricing and right customers target for capturing a substantial market share. Video Champ started in early 2000 for acquiring a sizeable portion of the competitive entertainment industry. Through offering made by the company, customers can enjoy and entertain themselves by getting access to a wide range of movies. The company maintains a low operation while satisfying the market demand.
The company came into being for meeting the expectations and values of the customers who were not interested in the technological changes taking place overtime but wanted to enhance their movie experience. Therefore, the company made the option of low cost movie viable and convenient for the target customers. At the same time, the company also ensured that they receive positive outcomes.
The report here discusses about the importance of business intelligence for Video Champ and the use of sensitivity and pivot tables that ensures effective decision-making. There is however an extensive analysis of role of pivot table in assisting effective decision making in the report. The report also discusses about Blockbuster case study and its failure in the context of supply chain management. Further, there is also elaboration on the benefits of supply chain management for Video Champ.
Business Intelligence is defined by a process that is technology driven and is used for data analysis that enables business managers, corporate executives and other end users to have actionable information so that they are able to make informed business related decisions (Chen, Chiang and Storey 2012). Therefore, to carry out business intelligence activities there are variety of tools, methodologies and applications that enables an organization with collecting data from external sources and internal systems, prepare the data for analysis, run and develop queries against the data, creation of dashboards, data visualizations and reports that helps the operational workers and corporate in easy decision making.
Video Champ should undertake business intelligence for its potential benefits. These benefits include accelerated and improved decision-making, optimization of internal business processes and increment of operational efficiency (Tamer et. al 2013). Introducing business intelligence might also drive in more revenues and enable the company to have a competitive advantage against any existing business rivals. Further, business intelligence will also help Video Champ identify trends in the market and identify the problems related to the business that be addressed accordingly.
There is a common trend that the assumptions and values of the parameter of any particular model undergoes changes overtime and can have errors. Thus, the analysis done for the investigation of these errors and changes and their impacts on the conclusion drawn referred to as Sensitivity Analysis (Tian 2013). This analysis is not only easy to perform but also easy to communicate and understand. This technique commonly used to support effective decision-making. This technique applies to parameters that are mostly uncertain like technology, productivity, cost and price. In this context, sensitivity analysis applied more effectively for making recommendations and decisions. Thus, in case of uncertain parameter sensitivity analysis used for deriving information on:
- The level of robustness of the optimal solution in comparison to the different values of the parameter
- The circumstances responsible for the change of optimal solution
- The level of bad decision-making provided decision makers ignore the changed circumstances and stuck to the previous optimal strategy.
The pivot table on the other hand is a tool used for summarization of data found in many applications of data visualization that mainly uses data from database or worksheet/spreadsheet. The tools used in Pivot mainly counts, sorts, totals and averages the data that is stored in a spreadsheet or table. The result displayed through a representation known as Pivot Table that presents the summarized data (Dierenfeld and Merceron 2012). There are three key reasons for using the Pivot table:
- The data is summarized in a understandable and compact format
- Ensures finding a relationship in data
- The data is organized in a format and is easy to chart
Role of Pivot Table for Assisting Effective Decision Making
Analysis tools have become an essential part of the any company’s software as they enable in effective decision-making. Today, most companies operate on big data and therefore it becomes increasingly difficult for management, analysis and use for extract, transform and load (ETL) cycle. However, proper decision making on the data retrieval procedures can increase the company’s overall performance (Saaty and Peniwati 2013).
Thus, there is a huge rush of big data in most of the companies through tracking activities like social marketing, sales, customer care, sales and web traffic. However, this data needs analysis through efficient and quick tools, as they become the driving force in running the company’s business and ensure effective decision-making. In this respect, the Pivot Table is the most commonly used technique for effective data analysis compared to data grids and excel sheet tables. This is because pivot table is not only compact but presents data in a more readable format (Manya et.al 2012). With this particular table, the companies can not only see relationships, trends, and opportunities but also proceed in the right way for effective decision-making. The table also provides a completely fresh approach towards navigation of data thereby helping the user for slicing data in a faster and efficient manner as compared to traditional methods of complicated manipulation. The use of pivot table thereby ensures managers to have a bird’s eye view of the daily proceedings of the company. This might be the case that this technique might not solve every problem but can certainly empower the company with effective decision-making based on data and thereby increase its overall visibility.
Video Champ has used this pivot table technique to analyze its sales in the four quarters of 2015 and 2016. Thus, through the table one can find that first quarter (Q1) of sales amounting to $ 97,300 was greater than the sales of the first quarter of 2016 that amounted to $95,110. Then, in the second quarter (Q2) the sales of 2015 that is $ 92185 was greater than 2016 that was $89307.50. The third quarter (Q3) sales of 2015 were also greater than 2016. However, one can see a gradual shift in the fourth quarter (Q4) that counted for greater sales in 2016 compared to 2015. The sales volume of 2016 was $109,880.00 and that of 2015 remained $107,500.00. Therefore, company took some effective decisions based on the sales volume of the various quarters of 2015 that led to an increase in sales in the fourth quarter of 2016.
Blockbuster Case Study and its Failure in the context of Supply Chain Management
Supply chain management (SCM) deals with the supervision of the information, materials and finances as the company moves in process from supplier to manufacturer to wholesaler, retailer and to the consumer. The process involves coordination and integration of these flows within and amongst companies (Qian et.al 2013). However, the ultimate focus of an effective supply chain management is to ensure reduction of inventory.
Previously, after the release of a movie it would initially play in theatre and then be released on a videotape to be available in rental outlets or stores. Due to the high rental prices, initially most of the tapes would experience a drive towards the rental market. Eventually when the price dropped, the distributors would put the movie up for sale. This gave birth to Blockbuster Inc, a rental outfit.
However, with the emergence of availability on movies on DVD things took a drastic change. In the present scenario, the DVDs for the retail as well as rental have a simultaneous release. This implies that Blockbuster must compete with the present market scenario to get a substantial hold. Moreover, the supply chain for the retail side is simple as DVDs goes through quality packing, picking and ship processes before they reach the shelves. Compared to this, there are additional steps involved in rentals that include printing an insert that is store specific, then placing the insert in the outer sleeve in a lockable case produced separately and then transferring the DVD from its original packing to the new case (Lo and Naraharisetti 2013). The entire process done under tight schedules so that they reach the store in a time that coincides with the release dates of the movies. Sometimes, Blockbuster faced difficulties in following the innumerable steps to keep up in the supply chain and maintain pace with its competitors.
Moreover, the volatility of demand gave blockbuster additional challenges in terms of labor supply. Although the company tried to solve the problem with temporary workers but it eventually its cost increased as they had to provide training on a short notice.
The company however responded to the challenges with a new approach that involved repackaging their DVDs. The initial rental boxes were replaces by lockable cases. Moreover, the company also resorted to technology for cutting down its costs (Gershon 2013). The company installed five high-speed machines at the sole distribution centers for automating the process of opening the case, inserting disks and thereby applying and printing store labels. In spite of all the changes made, the company could not compete with the emerging challenges of the 21st century and had to undertake a constant struggle with its competitors.
However, the company’s decline attributed to the increased competition that it faced from the media entertainment industry. Then there were technological advances that changed the scenario of the industry in addition to the changing preferences of the consumers. The Company also could not keep pace with the rapid growth of the new competitors and economic environment that persisted generally (Davis and Higgins 2013). In addition to this, the company’s progress hindered by the increased level of debt incurred during times when the company had lower competition and higher performance.
Importance of SCM for Video Champ
The supply chain management (SCM) is important as it plays a key role in dealing with the complexity of growth in present day’s global supply chain. The supply chain management has undergone a evolution from manual and mechanized optimization to an automated, digital and modern coordination and integration of elements of the supply chain. The process not only optimizes but also facilitates flow of information, products and finances. This in a way is enabling companies in the creation of relationship values that increases business efficiency on an overall basis (Monczka et. al 2015). Therefore, it is necessary for Video Champ to follow an effective supply chain management to ensure efficiency in business. Further, the impact of the supply chain management enhanced if the company goes through the following steps:
Bullwhip effect refers to the fluctuations of smaller size on the demand side occurring at the downstream end of supply chain that causes huge variations to upstream suppliers. This leads to ineffective and bloated supply chain that causes accumulation of inventory (Jaipuria and Mahapatra 2014). Thus, in order to ensure supply chain efficiency there is a need to reduce the bullwhip effect. This strategies that help in reducing the effect are as follows:
- Ensuring Effective Collaboration with Suppliers and Customers: Better collaboration with the customers and suppliers ensures efficiency in supply chain.
- Improvement of Forecast Accuracy: Even if a company focuses on being more demand driven it is still important to have accuracy in forecasting a plan regarding the in house promotions, products and new customers.
- Enabling Quicker Decisions with Better Visibility and Insight: An effective supply chain management enables a company to get better insight and visibility.
- Adoption of Supply Chain Management Approach that is Demand Driven: Company must follow a demand driven supply chain management since it is the most efficient in reducing the effect.
Supply Chain Planning refers to a component in the supply chain management that helps in the prediction of requirements for future in order to balance demand and supply. Thus, a company must ensure an effective supply chain planning for better efficiency.
Improves Supply Chain Visibility
Visibility refers to the information about the stock of inventory at present. This information allows one to take actionable steps along the supply chain. The accuracy of information about the visibility not only improves the process but also helps in removing any redundancies. The steps that helps in improving the visibility of the supply chain:
- Opening the lines of communication between all the parties involved
- Trusting the partners
- Investing in technology
- Setting the key performance indicators
- Knowing the customers well
- Identifying the improvements in business process and cost savings.
The Supply chain execution system refers to the means of managing items of the supply chain and thereby ensuring where they need categorizing. In the present scenario, with the emergence of technology, many enterprises makes use of software that have components of supply chain execution system that helps in better handling of supply chains. Thus, this system is important for companies to ensure effective management of supply chain.
The report here concludes with the importance of introducing supply chain management for Video Champ. A vivid elaboration describes why supply chain management is important for enhancing business efficiency. The report also gives a description about the failure of Blockbuster in the context of supply chain management. There is also discussion about the importance of business intelligence for the given company and the necessity to use pivot table and sensitivity analysis for data. Further, there is vivid description about the role of the pivot table in effective decision-making. In the report, there is also discussion about the company background and its purpose.
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