data gathering and analysis training 23 september 2005 26 september 2005

Data Gathering and Analysis Training

23 September 2005

26 September 2005

2

Data gathering vs. analysis

20%Analysis

80%Data gathering

50%Analysis

50%Data

gathering Value to clients

Historic emphasis New focus

High

Low

3

Simple rules

Always ask yourself “so what?”

Do not wait to analyze until data collection is complete

Keep it simple and structured

Make the output of the analysis obvious

Consider analysis techniques beyond the standard tools

4

Simple rules

Always ask yourself “so what?”

Do not wait to analyze until data collection is complete

Keep it simple and structured

Make the output of the analysis obvious

Consider analysis techniques beyond the standard tools

5

The question

Should the client build a nursing home in upstate, New York?

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Nursing Home Ownership within Market Region

Total Number of Nursing Homes: 47 Registered For Profit Homes: 23 Homes

– Represents 48.9% of total Non for Profit Homes: 24 Homes

– Represents 51.1% of total Highest Number of Registered Homes

– For Profit Corporation: 17 Homes

– Non For Profit Corporation: 14 Homes

– Government Ownership by County: 5 Homes

– For Profit Partnership: 4 Homes

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Nursing Home Statistical Information for Market Region

Statistical Averages:– Average Number of Beds: 150 beds

– Average Number of Occupied Beds: 140 beds

– Average Percent of Occupied Beds: 93.4%

– Average Number of Staff Hours per Resident: 3.45 hours All Nursing Homes within area are Medicare and Medicaid

Certified

Source: www.medicare.gov

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All Surrounding Counties Senior Income Data

Alld Surrounding All Ages 55 to 64 65 to 74 75 & over % of Senior PopulationCumulative % Senior

Population

Less than $10,000 24362 3635 3753 5351 10.4% 10.4%

$10,000~$14,999 18002 1946 3376 5025 8.4% 18.9%

$15,000~$19,999 17818 2020 3247 4107 7.7% 26.5%

$20,000~$24,999 17947 2497 3189 3246 7.3% 33.8%

$25,000~$29,999 19443 2859 3072 2689 7.0% 40.8%

$30,000~$34,999 18919 2550 2916 2308 6.3% 47.2%

$35,000~$39,999 18014 2679 2583 1753 5.7% 52.9%

$40,000~$44,999 17402 2439 2329 1350 5.0% 57.9%

$45,000~$49,999 16383 2536 1965 1008 4.5% 62.4%

$50,000~$59,999 32060 4726 3296 1600 7.9% 70.3%

$60,000~$74,999 39382 5743 3206 1536 8.6% 78.8%

$75,000~$99,999 44116 7025 2695 1135 8.9% 87.7%

$100,000~$124,999 24364 4177 1242 626 4.9% 92.6%

$125,000~$149,999 12132 2347 681 278 2.7% 95.3%

$150,000~$199,999 9948 2229 550 266 2.5% 97.8%

$200,000 and more 7032 1751 611 323 2.2% 100.0%

Total Households 337324 51154 38711 32601 100.0%

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So what?

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Can we answer the question now?

Definition of target market Total demand and trends of target market Total current supply Anticipated supply (new construction) Barriers to enter market

What do we need What do we have

What data gaps exist

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What do we have?

Alld Surrounding All Ages 55 to 64 65 to 74 75 & over % of Senior PopulationCumulative % Senior

Population

$50,000~$59,999 32060 4726 3296 1600 7.9% 70.3%

$60,000~$74,999 39382 5743 3206 1536 8.6% 78.8%

$75,000~$99,999 44116 7025 2695 1135 8.9% 87.7%

$100,000~$124,999 24364 4177 1242 626 4.9% 92.6%

$125,000~$149,999 12132 2347 681 278 2.7% 95.3%

$150,000~$199,999 9948 2229 550 266 2.5% 97.8%

$200,000 and more 7032 1751 611 323 2.2% 100.0%

Total Households 337324 51154 38711 32601 100.0%

• 47 nursing home X 150 beds = 7,050 total beds• 93% occupancy rate• 18 % growth in 65 to 74 versus 75 & over• 57% growth in 55 to 64 versus 75 & over

Target market

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Can we answer the question now?

Definition of target market Total demand and trends of target market Total current supply Anticipated supply (new construction) Barriers to enter market

What do we need What do we have

What data gaps exist

13

Can we answer the question now?

Definition of target market Total demand and trends of target market Total current supply Anticipated supply (new construction) Barriers to enter market

What do we need What do we have

What data gaps exist Percent of people who end up in nursing home by age New nursing home starts Number of nursing home permits filed Regulatory/ licensing requirements

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Market feasibility in 2 years

7,050 beds7,050 beds

6,557 beds6,557 beds

8,100 beds 8,100 beds

12,997 beds12,997 beds

5,255 old +7,742 new

7 known new buildings planned @ 150 beds each

• 20% of target market will need nursing home care over age 75

• 10% of current nursing home tenants will be removed each year

Key assumptions

Current In 2 years

4,897 beds 4,897 beds

Supply

Demand

Opportunity

• Significant market opportunity exists even with the potential additional building starts

• Company should enter if licensing can be approved

Conclusion

15

Simple rules

Always ask yourself “so what?”

Do not wait to analyze until data collection is complete

Keep it simple and structured

Make the output of the analysis obvious

Consider analysis techniques beyond the standard tools

16

Market Segmentation Scenarios

1. Segment via Income– Farms with income $100,000+– In FL, GA, NC, SC– High end vegetables

2. Segment via Farmers Education Level– Farmers with some or 4 years

of college– In FL, GA, NC, SC– High end vegetables

3. Segment via Income with Increased Target States

– Farms with income $100,000+– In FL, GA, NC, SC plus

additional states– High end vegetables

4. Segment via Income with Increased Product Portfolio

– Farms with income $100,000+– In FL, GA, NC, SC– Increased portfolio of high end

vegetables

How much potential revenue can be generated from our software to better manage high end vegetable yields?

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1. Segment via Income

FL, GA, NC, SC

Farms $100,000+

High-end vegetables

The target market: Farms with operating income of $100,000+ per year, in FL, GA, NC, SC, who grow one or more of the 15 stated high end vegetables.

Calculation of total target market (acres). Total market was segmented as using farming economical class, location and output produce from farm. Target farm size by economical class was then calculated as a percentage of the total market. The same percentage was applied to the total target produce farm land. The calculation was performed for the nation as a whole and for the four target states.

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1. Target Market Revenue Potential

• Total acres used to produce high end vegetables

• Assuming 54% of farms producing high-end vegetables also …have income over $100,000

• Total farms over $100,000+

For the FL, GA, NC, SC.

35,100,000 Acres

$100K+: 18,954,000 Acres

High-end vegetables: 117,000 Acres

• Total Market – the total farmed acres in FL, GA, NC, SC.

Target Market

Potential Revenue: $3,525,000

Source:http:// www.usdf.gov/nassAssumption of $30 revenue per acre

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Simple rules

Always ask yourself “so what?”

Do not wait to analyze until data collection is complete

Keep it simple and structured

Make the output of the analysis obvious

Consider analysis techniques beyond the standard tools

20

Five Force Analysis

Rivalry Among Competitors (S)

Strong rivalry among competitors Competitive price Slow market growth Intensive direct marketing Full consulting service package Active customer satisfaction improvement

Potential New Entrants (S)S: Strong

M: Moderate

W: Weak

Substitute Products (M)

Suppliers (M)

Moderate access to substitutes

Moderate suppliers bargaining power Sufficient engineers

Buyers (S) Strong bargaining power Easy access to other competitors Low cost to switch to other competitors Large numbers of alternatives available

Low entrance barrier High potential of new entrance

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So what?

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Opportunities• Growing market and purchase

power

• Relatively stable demand – Mexican consumer segment

• Demand for authentic Mexican food – non-Hispanic segment

• Trends towards healthy food

• Business opportunities with existing customers

Business Implications

Threats• Mass markets are dominated by

established brands• Niche markets are dominated

numerous small brands and private brands

Strengths• Reputation in the industry

• Flexible operation and responsive to the market

• Strong collaboration among R&D, marketing and sales teams

• Tailored products: customization

• Capability in food innovation

Weaknesses• Lack of brand equity• Late Mexican food market entry in

U.S.

• Customize products to overcome lack of brand equity

• Leverage strong R&D capabilities to enter growing market in R&D

• Leverage relationship with existing customers

SWOT analysis example

23

Simple rules

Always ask yourself “so what?”

Do not wait to analyze until data collection is complete

Keep it simple and structured

Make the output of the analysis obvious

Consider analysis techniques beyond the standard tools

24

Differentiate yourself

SWOT and Five Forces are overused and NOT typically used by “real” consulting firms

Let’s look at some examples….

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Company Positioning of Salsas (perceptual maps)

Frito Lays

Campbell

Authentic

“Gringo”

Niche Market Mass marketHormel

Goya

Pillsbury

Griffith Laboratories

Private labels

Nestle

Source: OSBI Analysis

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Company Positioning of Salsas (perceptual maps)

Frito Lays

Campbell

Authentic

“Gringo”

Niche Market Mass marketHormel

Goya

Pillsbury

Griffith Laboratories

Private labels

Nestle

Source: OSBI Analysis

Recommended Positioning

27

Market attractiveness example

Market

Characteristics

Mexican Salad Dressings

Existing Competition None

Potential Competition Low-moderate

Size of Market Small

Profit Potential High

Recommendation: Enter market

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Market Share & % Gross Margin

Sales in Million Dollars Gross Margin in Million Dollars

1% Market Share

30% Gross Margin

0.8 0.24

1% Market Share

20% Gross Margin

0.8 0.16

5% Market Share

30% Gross Margin

3.9 1.2

5% Market Share

20% Gross Margin

3.9 0.8

Sensitivity analysis example: Salad Dressings Scenario Analysis

Market is small yet attractive and growing

Note: 1% is conservative, 5% is aggressive

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Required Current WWQ&A functions Primus

Cyracle ServiceWare eGain

Adjacent word search

“Me too” tagging facility

Notification process Scheduled reports User satisfaction survey and related reports

Automated notification process for revalidation

Database Maintenance/Authorizations

Maintenance/nomination/promotion

Search within one iteration

Boolean search facility

Editor functions

Auto assignment of questions

Large SME text area

Search of Q&A technical databases

Comparison of the Tools

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Company Cyracle Primus ServiceWare eGain

Microsoft

Dell

Apple

Compaq

Sun

HP

Clients using the Tools

In-house

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Option 2: Primus

Option 1: Cyracle

Option 3: ServiceWare

Option 4: eGain

Reports

Library/FAQ

Database Maintenance/Authorizations

Responding

Authoring

Searching

Fully SupportsNo Support

Inquiry about the costs of implementation for Primus and ServiceWare

Comparison of the Tools (Harvey Balls!)

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SWOT Analysis

Strengths Strong reputation in heavy equipment

market Low cost advantage (hire students) Excellent technical reputation leverage

from alliance with UIUC Good expertise in unique segments such

as casting and prototyping Strong expertise to add on to existing

software Easy access to large variety of software

Weaknesses Newcomer in simulation analysis industry,

does not have customer base Low name recognition for design service

industry Low awareness in simulation analysis

industry Few business opportunities, only one

location in Champaign Limited capacity for external service

Opportunities Opportunity to increase revenue due to

the sustainable and expanding market demand

Opportunity to tap into unique market segments

Opportunity to get alliance offers Opportunity to hire skilled students from

UIUC

Threats Strong competition from small local

companies Strong global competition Low entrance barriers Several alternatives exist

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Summary: Competitive Positioning

Strengths outweigh weaknesses

Opportunities outweigh threats

Positioning in unique segments such as prototyping and casting can find a niche for ABC in the industry

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Comparison of Customer’s Needs and ABC’s Position

Customer's Needs ABC's Position

S - Excellent reputation in generalS - Strong relationship with existing suppliersW - Newcomer in design and simulation industry S - Experience in heavy equipment and casting technology W - Limited knowledge in some other industries

Low price S - Cost advantage leverage from UIUC studentsW - High margin desired by ABC

Testing needs S - Experience in heavy equipment and casting technology W - Unfilled opportunity

Time saving W - Limited capacity S - Strong leadership teamW - Located in small townW - Limited human resource to offer public relationship

Familiarity and trust

Related experience

Ongoing and reliable communication

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Comparison of Market Environment and ABC’s Position

Market EnvironmentS - Experience in heavy equipment and casting

technology S - Excellent reputation in generalS - Good market penetration ideasS - Huge capital for R&D investment

(differentiation potential)W - New comer in design and simulation

industry W - Limited capacity

Low entrance barrier

Excellent technical skills leveraged from UIUC

Software innovation and improvement

ABC's Position

S -

Market demand is still growing

Limited casting services

Increasing market demand in casting industry

Global competition

ABC can leverage its strengths and overcome its weaknesses

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Overview: Strategy Implementation

Strategies to place ABC in a better position in market environment

and fulfill customer’s needs in the simulation industry

Differentiate your service by Offering prototyping Emphasizing stronger disciplines like casting simulation

Focus your energies by Using selective pricing Targeting local customers Aligning organizational support

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So what…now?

38

Simple rules- summary

Always ask yourself “so what?”

Do not wait to analyze until data collection is complete

Keep it simple and structured

Make the output of the analysis obvious

Consider analysis techniques beyond the standard tools