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01/02/2012 23:59

 

 

Three key factors to create a successful business strategy. Explanation of 3C’s Model of Ohmae

The 3C’s model of Kenichi Ohmae, a famous Japanese strategy guru, stresses that a strategist should focus on three key factors for success. In the construction of any business strategy, three main players must be taken into account:

  1. The corporation itself.
  2. The customer.
  3. The competition.

THE STRATEGIC TRIANGLE

Only by integrating the three C’s (CustomerCorporate, and Competitor) in a strategic triangle, a sustained competitive advantage can exist. Ohmae refers to these key factors as the three C’s or the strategic triangle.

1: CORPORATE-BASED STRATEGIES

These strategies aim to maximize the corporation’s strengths relative to the competition in the functional areas that are critical to achieve success in the industry:

  • Selectivity and sequencing. The corporation does not have to lead in every function to win. If it can gain a decisive edge in one key function, it will eventually be able to improve its other functions which are now mediocre.
  • A case of make or buy. In case of rapidly rising wage costs, it becomes a critical decision for a company to subcontract a major share of its assembly operations. If its competitors are unable to shift production so rapidly to subcontractors and vendors, the resulting difference in cost structure and/or in the company’s ability to cope with demand fluctuations may have significant strategic implications.
  • Improving cost-effectiveness. This can be done in three basic ways:
    1. Reducing basic costs much more effectively than the competition.
    2. Simply to exercise greater selectivity in terms of:
      • The orders that are accepted.
      • The products that are offered.
      • The functions that are performed.

This means cherry-picking operations with a high impact, so that when other operations are eliminated, functional costs will drop faster than sales revenues.

    1. To share a certain key function with the corporation’s other businesses or even with other companies. Experience indicates that there are many situations in which sharing resources in one or more basic sub-functions of marketing can be advantageous.

2: CUSTOMER-BASED STRATEGIES

Clients are the basis of any strategy according to Ohmae. There is no doubt that a corporation’s foremost concern ought to be the interests of its customers rather than that of its stockholders and other parties. In the long run, the corporation that is genuinely interested in its customers will be interesting for its investors.

Segmentation is advisable:

  • Segmenting by objectives. Here, the differentiation is done in terms of the different ways that different customers use the product. Take coffee, for example. Some people drink it for waking up or staying alert, while others view coffee as a way to relax or socialize (coffee breaks).
  • Segmenting by customer coverage. This type of strategic segmentation normally emerges from a trade-off study of marketing costs versus market coverage. There appears always to be a point of diminishing returns in the cost-versus-coverage relationship. The corporation’s task, therefore, is to optimize its range of market coverage. Be it geographical or channel. So that its cost of marketing will be advantageous relative to the competition.
  • Segmenting the market once more. In a fiercely competitive market, the corporation and its head-on competitors are likely to be dissecting the market in similar ways. Over an extended period of time, therefore the effectiveness of a given initial strategic segmentation will tend to decline. In such a situation it is useful to pick a small group of key customers and reexamine what it is that they are really looking for.

Changes in customer mix
Such a market segment change occurs where the market forces are altering the distribution of the user-mix over time by influencing demography, distribution channels, customer size, etc. This kind of change means that the allocation of corporate resources must be shifted and/or the absolute level of resources committed in the business must be changed.

3: COMPETITOR-BASED STRATEGIES

According to Kenichi Ohmae, these strategies can be constructed by looking at possible sources of differentiation in functions such as: purchasing, design, engineering, sales and servicing. Ways to do this:

  • The power of an image. Both Sony and Honda sell more than their competitors as they invested more heavily in public relations and advertising. And they managed these functions more carefully than did their competitors. When product performance and mode of distribution are very difficult to differentiate, image may be the only source of positive differentiation. But the case of the Swiss watch industry shows that a strategy built on image can be risky and must be monitored constantly.
  • Capitalizing on profit- and cost-structure differences. Firstly, the difference in source of profit might be exploited. For profit from new product sales, profit from services etcetera. Secondly, a difference in the ratio of fixed cost and variable cost might also be exploited strategically. Because a company with a lower fixed cost ratio can lower prices in a sluggish market. In this way it can win market share. This hurts the company with a higher fixed cost ratio. The market price is too low to justify its high fixed cost and low volume operation.
  • Tactics for flyweights. If such a company chooses to compete in mass-media advertising or massive R&D efforts, the additional fixed costs will absorb a large portion of its revenue. Its giant competitors will inevitably win. It could however calculate its incentives on a gradual percentage basis, rather than on absolute volume, thus making the incentives variable by guaranteeing the dealer a larger percentage of each extra unit sold. Of course, the big three market playerscannot afford to offer such high percentages across the board to their respective franchised shops; their profitability would soon be eroded.
  • Hito-Kane-Mono. A favorite phrase of Japanese business planners is hito-kane-mono, or people, money, and things (fixed assets). They believe that streamlined corporate management is achieved when these three critical resources are in balance without any surplus or waste. For example: cash over and beyond what competent people can intelligently expend is wasted. Too many managers without enough money will exhaust their energies and involve their colleagues in a time-wasting warfare over the allocation of the limited funds. Of the three critical resources, funds should be allocated last. The corporation should first allocate management talent, based on the available mono: plant, machinery, technology, process know-how, and functional strengths. Once these hito have developed creative and imaginative ideas to capture the business’s upward potential, the kane, or money, should be allocated to the specific ideas and programs generated by individual managers.

Description of 4 P’s of Persuasion. Explanation.

DEFINITION 4 P’S OF PERSUASION. DESCRIPTION.

4 P’s of Persuasion is a framework to formulate persuasive written messages.

clip_image002The 4 P’s of Persuasion consist of a framework designed for written communication typically used by journalists although also applied in marketingadvertising and corporatecommunication. It might be used also in oral communication such as video or audio messages. The 4 P’s of Persuasion are a persuasive technique that suggests to stress some critical points, the 4P’s, to generate convincing, forceful, powerful, seductive and strong messages. See also: Persuasion Theory and Persuasion Principles.

The 4P’s stand for Promise, Picture, Proof, and Push:

  • Promise: the first part or phase of a text has to grasp the attention of target receivers. The promise should be contained in the headline and then continued in the aperture of a message. The promise, and thus the headline of a written message, is the most important part because it is the first chance to bring a reader to read your message. The promise should contain the most important reasons why a reader should read your text.
  • Picture: in this stage the promise and its benefits are explained in more detail with a descriptive language that should stimulate visual memorization: a reader starts imagining pictures representing the content of the message. An effective way is to describe benefits and let the reader imagine them in his specific context; for example, if the text is promoting an armchair, the reader imagines himself sitting in a comfortable armchair. In the Picture phase a writer leverages images description to keep a reader emotionally interested in the content.
  • Proof: here the reasoning is supported with proof, using statistics, research, graphs, charts, testimonials or any other supporting tool. Preferably provided by third parties. Here it is fundamental to demonstrate that the benefits that were  promised will be truly delivered. In the reader’s mind the focus shifts from an emotional to a rational interest needed to achieve a full acceptance of the message . The acceptance could be the purchase of a product, the endorsement of an attitude or a behavior, etc… Many commercial messages fail at this stage because they lack credible proof that can support the first two phases of the message.
  • Push: this phase should deliver an exceptional offer, and then ask in a direct way for a purchase or action by the reader. The push is obviously a key part of any persuasive written message. In this final part of the message the reader should realize the business sense of your proposal as it has been meant by the writer. Any persuasive message must take the push-ending into consideration from the beginning. And when it is time to push, at the closing, it is needed to draw connection lines between your promise, its benefits, glowing pictures, strong supporting evidence and the concrete actions required to start enjoying the benefits. The push phase is aimed at explaining once again and, in a more explicit way, why the reader should do what your asking. The key of persuasion is understanding: so make sure your target has really understood what you are trying to tell. If a text is delivered to the right target and the arguments supporting the message are strong and understood, the acceptance is likely to follow. A common mistake of many sales and marketing people is to assume their prospect have understood.

Generating the optimal response in the market. Explanation of Marketing Mix of E. Jerome McCarthy.

WHAT IS THE MARKETING MIX? DESCRIPTION

The Marketing Mix model (also known as the 4 P’s) can be used by marketers as a tool to assist in defining the marketing strategy. Marketing managers use this method to attempt to generate the optimal response in the target market by blending 4 (or 5, or 7) variables in an optimal way. It is important to understand that the Marketing Mix principles are controllable variables. The Marketing Mix can be adjusted on a frequent basis to meet the changing needs of the target group and the other dynamics of the marketing environment.

Product

Historically, the thinking was: a good product will sell itself. However there are no bad products anymore in today’s highly competitive markets. Plus there are many laws giving customers the right to send back products that he perceives as bad. Therefore the question on product has become: does the organization create what its intended customers want? Define the characteristics of your product or service that meets the needs of your customers.

Functionality; Quality; Appearance; Packaging; Brand;Service; Support; Warranty.

Price

How much are the intended customers willing to pay? Here we decide on a pricing strategy – do not let it just happen! Even if you decide not to ask (enough) money for a product or service, you must realize that this is a conscious decision and forms part of the pricing strategy. Although competing on price is as old as mankind, the consumer is often still sensitive for price discounts and special offers. Price has also an irrational side: something that is expensive must be good. Permanently competing on price is for many companies not a very sensible approach.

List Price; Discounts; Financing; Leasing Options; Allowances.

Place

Available at the right place, at the right time, in the right quantities? Some of the recent major changes in business have come about by changing Place. Think of the Internet and mobile telephones.

Locations; Logistics; Channel members; Channel Motivation; Market Coverage; Service Levels; Internet; Mobile.

Promotion

(How) are the chosen target groups informed or educated about the organization and its products? This includes all the weapons in the marketing armory – advertising, selling, sales promotions, Direct Marketing, Public Relations, etc. While the other three P’s have lost much of their meanings in today’s markets, Promotion has become the most important P to focus on.

Advertising; Public Relations; Message; Direct Sales; Sales; Media; Budget.

The function of the Marketing Mix is to help develop a package (mix) that will not only satisfy the needs of the customers within the target markets, but simultaneously to maximize the performance of the organization. There have been many attempts to increase the number of P’s from 4 to 5P’s in the Marketing Mix model. The most frequently mentioned one being People or Personnel. Booms and Bitner have suggested a 7-Ps approach for services-oriented companies.

Book: Nirmalya Kumar – Marketing As Strategy: Understanding the CEO’s Agenda.. – clip_image003

Book: David A. Aaker – Strategic Marketing Management – clip_image003[1]

Measuring Brand Value. Explanation of Brand Asset Valuator of Young & Rubicam.

The Brand Asset Valuator of advertising agency Young & Rubicam measures brand value by applying four broad factors.

FOUR FACTORS FOR DETERMINING BRAND VALUE

  1. Differentiation. Differentiation is the ability for a brand to be distinguished from its competitors. A brand should be as unique as possible. Brand health is built, and maintained, clip_image005by offering a set of differentiating promises to consumers. And by delivering those promises to leverage value.
  2. Relevance. Relevance is the actual and perceived importance of the brand to a large consumer market segment. This gauges the personal appropriateness of a brand to consumers and is strongly tied to household penetration (the percentage of households that purchase the brand).
  3. Esteem. Esteem is the perceived quality and consumer perceptions about the growing or declining popularity of a brand. Does the brand keep its promises? The consumer’s response to a marketer’s brand-building activity is driven by his perception of two factors: quality and popularity. Both vary by country and culture.
  4. Knowledge. Knowledge is the extent of the consumer’s awareness of the brand and understanding of its identity.  The awareness levels about the brand, and what it means, shows the intimacy that consumers share with the brand. True knowledge of the brand comes through building of the brand.

Differentiation and Relevance taken together say a lot about its growth potential ("Brand Vitality"), while Esteem and Knowledge determine the current power of a brand ("Brand Stature").

BRAND ASSET VALUATOR SURVEY

A Survey, based on the Brand Asset Valuator, is conducted annually containing data about 20.000 brands. It is based on the opinion of over 230.000 respondents in 44 countries.

 
       
         

A supply chain practice where one or more logistic functions of a firm are outsourced. Explanation of 3rd Party Logistics (3PL). (’80)

Contributed by: Eric Goh See Khai

clip_image006WHAT IS 3RD PARTY LOGISTICS (3PL)? DESCRIPTION

3rd Party Logistics (3PL) is the supply chain practice where one or more logistics functions of a firm are outsourced to a 3PL provider. Typical outsourced logistics functions are: inbound freight, customs and freight consolidation, public warehousing, contract warehousing, order fulfillment, distribution, and management of outbound freight to the client’s customers.

On top of this, also Value Added Services can be provided, such as: repackaging, assembling and return logistics. The 3PL Provider manages and executes these particular logistics functions using its own assets and resources, on behalf of the client company.

The thoughts behind this are to keep the firm competitive by keeping it lean without owning much assets, allowing it to focus on niche areas and to reduce operational costs. Third Party Logistics is also referred to as Contract Logistics.

3PL is evolving from predominately transactional-based to more strategic in nature. At the same time 3PL is gradually evolving into 4PL. A Fourth Party Logistics provider is a supply chain services provider that searches the best logistical solutions for its client, typically without using own assets and resources. Relatively new is the term 5PL or even 7PL, indicating Total Supply Chain Management Outsourcing.

ORIGIN OF 3RD PARTY LOGISTICS (3PL). HISTORY

In the 80s, there was increased globalization and an increased use of IT. These trends resulted in increased demands on firms and possibilities for companies to operate more competitive and lean. Some successful 3PL companies emerged, such as DHL/Exel, Kuehne + Nagel, Schenker , UPS, Panalpina, C.H. Robinson, TNT Logistics, Schneider, and NYK Logistics.

USAGE OF 3RD PARTY LOGISTICS (3PL). APPLICATIONS

  • Firms with a wide and/or complex distribution network. Example: IBM.
  • Firms that do not focus on logistics as one of their core competencies. Example: Chevron Corp or British Petroleum.
  • In strategic discussions on Core Competence.
  • In the case of the creation of a new product group.
  • When a company is integrating activities of a takeover. Compare Acquisition Integration Approaches

clip_image007STEPS IN 3RD PARTY LOGISTICS (3PL). PROCESS

The application of 3PL is normally done in a number of phases:

  1. Awareness. Investigate possibilities, inform employees, SWOT Analysis.
  2. Market Research. Investigate market trends, in particular service demands. See: SERVQUALCustomer Satisfaction Model, and Quality Function Deployment.
  3. Strategy. Develop and compare logistics concepts.
  4. Make or Buy. Build own competence or outsource. Outsource completely or partly.
  5. Business Plan. Costs, benefits. Phasing. Timing. Risks. Communication and motivation.
  6. Selection. Selecting partner based on market coverage, competency, integrity, vision, etc.
  7. Agreement. Agreeing on mutual expectations using a set of performance metrics.
  8. Evaluation and Renewal. Sustain partnership via mutual financial costs and benefits, joined planning, multi-level contacts, open information exchange.

STRENGTHS OF 3RD PARTY LOGISTICS (3PL). BENEFITS

3PL allows a firm to gain competitive advantage via:

  • Allowing firms to focus on developing their Core Competences.
  • Cost competitiveness.
  • Freeing up resources (money).
  • Benefit from the logistics know-how and international distribution networks of specialized 3PL Logistics providers, allowing for superior customer service levels.

LIMITATIONS OF 3RD PARTY LOGISTICS (3PL). DISADVANTAGES AND RISKS

To implement 3PL successfully, one may need to bear in mind some possible pitfalls:

  • Loss of control over the logistics function (especially for critical parts).
  • More distance from clients. Loss of human touch.
  • Discontinuity of services of 3PL provider.
  • Differences of opinion or perception of the service level of the third party provider.

ASSUMPTIONS OF 3RD PARTY LOGISTICS (3PL). CONDITIONS

It can be inferred that the firm engaging this practice is likely:

  1. A firm that does not focus on logistics as one of its core competencies.
  2. At least a mid-sized corporation such that the logistics cost is substantial enough to justify the engagement of the outsourcing services.

Book: Edward A Silver – Inventory Management and Production Planning and Scheduling  – clip_image003[2]

Book: David Simchi-Levi – Designing and Managing the Supply Chain  – clip_image003[3]

 

Understanding Michael Porter: The Essential Guide to Competition and Strategy

15/01/2012 23:31

 

Understanding Michael Porter: The Essential Guide to Competition and Strategy

 
Competitive advantage. The value chain. Five forces. Industry structure. Differentiation. Relative cost. If you want to understand how companies achieve and sustain competitive success, Michael Porter's frameworks are the foundation. But while everyone in business may know Porter's name, many managers misunderstand and misuse his concepts. "Understanding Michael Porter" sets the record straight, providing the first concise, accessible summary of Porter's revolutionary thinking. Written with Porter's full cooperation by Joan Magretta, his former editor at Harvard Business Review, this new book delivers fresh, clear examples to illustrate and update Porter's ideas. Magretta uses her wide business experience to translate Porter's powerful insights into practice and to correct the most common misconceptions about them-for instance, that competition is about being unique, not being the best; that it is a contest over profits, not a battle between rivals; that strategy is about choosing to make some customers unhappy, not being all things to all customers. An added feature is an original Q&A with Porter himself, which includes answers to managers' FAQs. Eminently readable, this book will enable every manager in your organization to grasp Porter's ideas-and swiftly deploy them to drive your company's success.
 
MICHAEL Porter is the thought leader in the field of business strategy.
He has single-handedly shaped the way in which the world’s top business leaders think about competitive strategy and success. And his concepts like “competitive advantage”, “value chain” and “five forces” form the bedrock for management thinking about complex business issues.
Unfortunately, his frameworks are often bastardised, misused and misunderstood.
The good news is that there now appears to be a solution to this problem.  Understanding Michael Porter.
The book is said to be the first concise, accessible summary of Porter’s revolutionary thinking.  To quote the Harvard Business Review:
Magretta uses her wide business experience to translate Porter’s powerful insights into practice and to correct the most common misconceptions … that competition is about being unique, not being the best; that it is a contest over profits, not a battle between rivals; that strategy is about choosing to make some customers unhappy, not being all things to all customers.


How and why organizations can achieve and then sustain competitive advantage, especially in turbulent and uncertain times


Although this book offers – in my opinion — the single best introduction to the major insights of Michael Porter, other than an extended period of one-on-one time with him during which he explains them, Joan Magretta also offers other invaluable business information, insights, and wisdom within a much larger context.  Those who have read her earlier business classic, What Management Is: How It Works and Why It’s Everyone’s Business, already know that she possesses highly-developed perspectives on both the scope and depth of business, and, the specific details (and relevance thereof) of what management is and does as well as how its core competencies can be developed and then applied to achieve sustainable high-impact and superior performance.


Her brilliant analysis of Porter and his major contributions includes:


o How to develop the right mind-set for competition
o “The Five Competitive Forces That Shape Strategy”
o How and why a value chain can be a decisive competitive advantage
o What the “core” is and how it can help to create value
o How and why trade-offs are strategy’s “linchpin”
o How and why the value or cost of one activity is affected by how other activities are performed
o How and why continuity enables development of competitive advantage


The coverage of Porter material includes an Epilogue that consists of “A Short List of Implications, followed by Magretta’s interview of Porter and a “A Porter Glossary: Key Concepts.”


All this would be more than sufficient to establish Magretta’s book as a “business classic” but there is more, so much more that she offers. After providing a vigorous and comprehensive discussion of Porter’s major insights, she then calls upon her expertise as a business historian and her skills as an educator to help her reader to select and then apply whatever would be most relevant – and most appropriate — to the reader’s own specific needs, interests, strategic objectives, and resources. This is the “context” for understanding to which I referred earlier.


Here is a partial list of the mini-commentaries that Magretta’s inserts throughout her lively and eloquent narrative:


“One-Upmanship Is Not Strategy” (Page 25)
“The Fundamental Equation: Profit = Price – Cost” (40-41)
“The Five Forces: Competing for Profits” (61)
“Do You Really Have a Competitive Advantage? First You Quantify, and Then You Disaggregate” (82-83)
“Discovering New Positions: Where to Begin” (118-119)
“Keep the Core, Outsource the Rest? Not So Fast” (153)
“Ten Practical Implications” of mastering Porter’s major concepts (184-185)


end...

 

SPSS Tuotorial for students

26/09/2011 19:25

 

 

 

 
Spss tutorial guide for students
THIS GUIDE PRESENTS A FULL WALK-TROUGH TUTORIALS ON HOW TO LOAD YOUR SURVEY DATA INTO SPSS, PREPARING THE DATA, VALIDITY AND RELIABILITY TESTING AND FINALLY THEORY TESTING WITH CORRELATION AND REGRESSION ANALYSIS. THE GUIDE IS A COLLECTION OF SPSS  INSTRUCTIONS FROM THE RESEARCH SEMINAR COURSE THE VU UNIVERSITY. GOODLUCK PREPARING FOR YOUR QUANTITATIVE THESIS OR RESEARCH!
How to open Excel data file into SPSS
1.       Open SPSS > File > Open Data, set “Type of files” to “Microsoft Excel (*.xls)”  and select your Excel file
2.      A dialogue screen will appear. Make sure that “Read variable names from the first row of data” is selected (which it is by default) and click ‘OK’.  SPSS should now have opened your file, which can later save a proper SPSS file (.sav file). For practical purposes, you may want to shorten the labels/names of the variables. You can do this by going to the ‘Variable View’ sheet.
SPSS Analyses of Survey Data tutorial
Introduction
 
This document contains a short description of the analyses that have to be performed on the data collected with the survey that is part of the BRM course. The aim of these analyses is to test your hypotheses by for instance getting insight into (1) the differences between groups within the organization or between different variables and (2) the relationships between different variables.
In this process, three main steps are distinguished:
Prepare data
Test operationalizations
Test theory (hypotheses)
Prepare data
 
First, we have to make sure the data are ready for further analyses. This concerns the following steps:
CHECK FOR ERRORS
-          WHAT?
Make sure that there are no errors in the dataset, such as impossible values or other mistakes that would affect your analysis.
-          HOW?
- Look through the data set for strange things
- Get the descriptives for all items
-          WHERE?
- Analyze > Descriptives > Frequencies
- Analyze > Descriptives > Descriptives
RECODE VARIABLES
-          WHAT?
Make sure that all items (= questions in the dataset) “point the same way”. Sometimes, the same concept is measured by items that are both positive and negative in terms of that concept. For instance, measuring attitude towards a product with items saying both “I like…” and “I dislike…”.
-          HOW?
Reverse the codes for items that “point the wrong way”. Recode into new variables, and change values from 5>1, 4>2, 3>3, 2>4 and 1>5.
-          WHERE?
Transform > Recode > into different variables
MAKE NEW VARIABLES FOR OPEN QUESTIONS (IF NECESSARY)
-          WHAT?
Some questions may be open questions, e.g. “What’s your function?”. If that is the case, you don’t have a variable you can use to compare groups (for instance). In that case, you have to make a new variables with categories (e.g., management, sales, engineering, etc.).
-          HOW?
Insert a new variable in the dataset, and manually assign categories to the different functions. Go through the dataset case per case.
-          WHERE?
Edit > Insert variables
Test operationalizations
 
Having gotten our data up to date, we can check for the quality of our operationalizations – in other words, the quality of the way we have measured our variables. Before continuing with the data analysis, we have to make sure that the measures we are basing our analyses on, are OK.
RELIABILITY ANALYSIS
-          WHAT?
Test whether the different items that we assume to measure one variable, can indeed be taken together into one scale (e.g., kshare1 up to kshare8).
-          HOW?
Perform a reliability analysis. Pay attention to the following criteria:
o   Cronbach’s alpha (is this higher than .65?)
o   Corrected item-total correlation (higher than .30?)
o   Alpha if item deleted (can we relevantly improve reliability by deleting items?).
Based on these criteria, decide whether to continue with the scale, to delete some items or do away with the scale altogether.
-          WHERE?
- Analyze > Scale > Reliability Analysis
- You can click “Statistics” here and ask for Descriptives for scale, items and scale if item deleted.
CREATE SCALES
-          WHAT?
Create the scales that you have just determined to be sound measurements of the variables you are measuring.
-          HOW?
By adding the different items you have decided do belong together, or (preferably)computing the means of these sets of items. The advantage of using the means is that the scale will have scores between 1 to 5, and that you are able to compare the scores on different scales. Otherwise, you couldn’t compare the mean score on a scale consisting of 6 items (with scores ranging from 6 to 30) with the mean score on a scale with 8 items (with a range from 8 to 40).
-          WHERE?
Transform > Compute
o   The “target variable” is the scale you are creating (for instance, “kshare”).
o   The “numeric expression” would be the formula to create this scale, e.g.
§  Mean (kshare1, kshare2, kshare3,…, kshare8)
Test theory
The previous steps have left you with a dataset in which all the key concepts are represented by scales that are valid measurements of these concepts. You now have a scale for each relevant concept, and of course the first few questions in the survey that provide you information on functions, departments, length of employment etc. You can now use these scales and other variables to test assumptions about differences and relationships.
TEST FOR DIFFERENCES
-          WHAT?
It is interesting to see whether (for instance) people fulfilling different positions in the organization score differently on relevant variables. Do high level experts share more knowledge than administrative personnel? Do managers have a more positive view of the organization than non-managers? Does IT have a more positive perception of IT performance than the business side?
-          HOW?
For differences between two groups: Perform a t-test. If you’re comparing two groups, choose the independent samples t-test. The grouping variable is the variable based on which you make groups – for instance, function, where group 1 is managers and group 2 is non-managers. The test variables are the variables for which you want to test whether the groups score differently (for instance, knowledge sharing). Pay attention to the following criteria in the output:
o   F-value and significance of F-value (undere “Levene’s test for Equality of Variances”). This value tells you nothing about the actual differences found, it basically tells you inwhich row of the output you should look for results. What’s tested here, is whether thevariances of the scores of both groups on the test variable are equal or not. If they’re not, SPSS is extra cautious with a number of things. If the significance of this F-value is lower than .05, this means that the variances differ significantly – and that you can not assume that there are equal variances, in other words, you should look in the bottom row of the output. That’s where you look for the following statistics.
o   T-value: gives an indication of the strength of the difference.
o   Degrees of freedom.
o   Significance of t-value: this is the decisive statistic. If the t-value is significant, this means that there is a significant difference between the groups – in other words, that (for instance) high level experts share more knowledge than administrative personnel.
-          For differences between more than two groups: Perform an analysis of variance (ANOVA). The “Factor” is the variable determining your groups (for instance, “department”), the “Dependent List” contains the variables for which you want to test whether there are differences between these groups (for instance, knowledge sharing). Pay attention to the following criteria in the output:
o   F-value and significance of F-value. For this test, this is the decisive statistic: If the F-value is significant, this means that you have found a significant difference between the groups on this variable. Look at the descriptives (you can click that in the menu for the ANOVA) to get more insight into the actual nature of these differences.
o   The F-value and descriptives don’t provide a definitive insight into which of the groups you distinguish differ from each other. In order to be able to determine exactly which departments (for instance) score higher or lower than the other ones, click Post Hoc. Then, you can choose from a number of post hoc tests that do tell you which groups differ from each other. Common post hoc tests are LSD, Bonferroni and Tukey. LSD is relatively simple, as it performs a number of t-tests between each of the groups. If the F-value is not significant, doing a Post Hoc test does not make much sense. Then, the conclusion is that there are no differences.
-          WHERE?
o   T-test: Analyze > Compare Means > Independent Samples T-test
o   ANOVA: Analyze > Compare Means > One-way ANOVA
§  Don’t forget Post Hoc
TEST FOR RELATIONSHIPS BETWEEN VARIABLES
-          WHAT?
Both theoretically and practically, you can have a lot of assumptions about relationships between variables. For instance, is a knowledge friendly organizational culture positively related to the level of relational social capital? Do the different dimensions of social capital explain the level of knowledge sharing in the organization?
-          HOW?
Correlations: If you’re only interested in the way variables are related, but not in the distinction between dependent and independent variables, you can compute correlations between these variables. Compute the Pearson correlation coefficient and see if the variables are positively related, negatively related, or not related at all. Pay attention to the following criteria in the output:
o   Pearson’s r: this tells you the strength and direction of the relationship. If this statistic is 1, there is perfectly positive correlation, if it is -1, there is a perfectly negative correlation, and if it is 0, there is no correlation. In practice, of course, it will lie somewhere in between these extremes. There are a number of different views concerning what constitutes a strong or weak correlation, but the leading criterion is:
o   The significance of this coefficient. If the level of significance is below .05 (p<.05), the correlation is significant and we can conclude that the two variables are related.
Regression analysis: Most of the time, you will be interested in the distinction between dependent and independent variables, and in the extent to which dependent variables areexplained (or influenced) by these independent variables. Then, you will perform a regression analysis, which enables you to test a model like the following:
Typically , Y will be what you enter in the “dependent” box, and X1, X2 and X3 will be entered in the “independents” box. In a regression analysis, pay attention to the following criteria in the output:
o   (Adjusted) R-square. This tells you how much variance in the dependent variable is explained by the independents in your model. For instance, an R-square of .48 means that 48% of the variance in the dependent is explained by your model. There is some discussion whether you should look at the R-square itself or the Adjusted R-square, but since the latter is a more conservative estimate it is preferable to choose the Adjusted R-square.
o   F-value and significance of F-value. Here, the F-value tells you whether the proportion of variance explained by your model is significant. In other words, whether the (Adj) R-square is significant, if the model has enough explanatory power to be valuable. If the F-value is not significant, that means it makes no sense to continue your analysis and you have to design a different model.
o   Betas and significance of Betas. The Beta can be compared to the correlation coefficient, and tells you how strong the relationship between your independent and dependent variable are, and what direction it has (positive or negative). Typically, Beta values will lie between -1 and 1, and the most important thing here is whether the Beta value is significant (p<.05).
-          WHERE?
o   Analyze > Correlations > Bivariate
o   Analyze > Regression > Linear
Moderation & Mediation Analysis in SPSS
Here follow the steps on how to do a moderation or mediation analysis in SPSS. For both analyses, use linear regression analyses.
Moderation
 
a.     analyze>descriptives>save as standardized values (select the independent and moderating variable)
b.     transform>compute (calculate the product of the 2 standardized variables)
c.      analyze > regression > linear (select your dependent variable, insert the independent and moderating variable in step 1, click next, and add the product in step 2)
d.     Is the best of the product significant? Then there is moderation.
Mediation
 
a.     Is there an association of the independent variable with the mediator? (analyze >regression > linear; independent variable is inserted as independent variable and mediator is added as dependent variable)
b.     Is there an association of the mediator with the dependent variable? (analyze > regression > linear; mediator is inserted as independent variable and the dependent variable is added as dependent variable)
c.      Is there an association of the independent variable with the dependent variable? (analyze > regression > linear; independent variable is inserted as independent variable and dependent variable is added as dependent variable)
d.     Does the association of independent and dependent variable reduce significantly (partial mediation) or disappear (full mediation) in case the mediator is added? (analyze à regression à linear; independent variable is inserted as independent variable and dependent variable is added as dependent variable in step 1; click next, and add the mediator in step 2)
More video tutorials on SPSS
For more information and video tutorials on SPSS go to SPSS student movies and view the following flash movies (these videos run more smoothly when you download them first onto your hard drive):
o  Entering Data
o  The Syntax Window
o  Transforming Data
o  Regression
o  One-Way Independent ANOVA

 

Changing Kiranawala

07/03/2011 19:41

 


80 Lakh Kirana outlets have been a number constantly quoted in various studies as the first consumer choice for shopping across India. They have distinct advantages that are obvious now; convenience, extension of credit, home delivery & leveraging personal relationships. But threats from outside & inside have ensured that they have evolved rapidly over the last 5 to 10 years.
 
Outside-threats are of course, the imminent opening up of the retail sector by the Government, with the introduction of 100% FDI in this sector. Opposition or not, perception is that the sheer size of the wastage our supply chain faces currently, will reduce once foreign players are in full-on.
Now, coming to the changing face of traditional retail, there are two aspects to it. One is the adaptation of the Kirana stores in light of organized competition & changing consumer preferences, and the other is the importance with which companies have started treating this traditional channel.
 
The first aspect is a no-brainer; new Independent self-service formats within Kiranas, computerized billing, stocking niche & imported products, the health angle, a cold storage unit are few of the areas where they have evolved. But the next step is ‘Collective bargaining’ – i.e. when groups of big Retail outlets start creating a semblance of an ad-hoc DC (Distribution center) & start procuring centrally from every big company. They’ll ask for better margins, differentiated service, more visibility solutions; the list will become endless. I’ve seen instances of this concept being tried in a few key metros across India.
 
Now, lets us examine how companies are approaching this channel. Every FMCG company has realized that if Modern Retail is growing at a phenomenal growth rate, so is traditional trade. The projected numbers from various 3rdparty agencies are quite mind-boggling. Hence focus towards garnering a higher share from within this channel is soon becoming one of the biggest challenges faced by the top marketing minds in this country. 
HUL had already started treating its key Kirana outlets with the same service pack that they are offering Modern Trade. This is one big step towards acknowledging the importance of the oldest channel in this country. Other companies have also started offering differentiated service packs & levels to the top contributing outlets within each market.
 
Studying visibility as a separate section throws a lot of light on the importance of this channel. Decisions are made at Point-of-Sale; & companies are letting no stone unturned in capturing premium real-estate within these outlets. Shelf level Displays have become an essential part of any company’s strategy, whether they are for a launch, a re-launch, a new communication message, a new variant etc. This fight for this space has automatically made the retailer smarter, whose bargaining power has thus increased significantly. 
 
But, I still agree that such an important medium for communication is still under-leveraged at this current juncture.

 
To ‘end’ this small anecdote on the Kiranawala, it is very obvious that he/she is a constantly evolving & adapting entity & will continue to co-exist with other formats in many a years to come. The differentiation across outlets within this channel will soon become starker over the coming years, with different clusters of outlets getting formed basis the speed of evolution that each outlet undertakes.

source- http://fmcg-marketing.blogspot.com/2011/09/changing-kiranawala.html