forecasting

Are you Willing to Play “FarmVille”? How About “FarmVille 2”?

Posted on by f1231mburton

In 2009 Zynga Inc created the extremely popular online game “FarmVille” that is exclusively played through Facebook.  It launched in about five week with only a 10-person team.  At its peak “FarmVille” had roughly 32 million users per day but has dropped all the way to 2.8 million users per day.  For the last two years Zynga has been pushing to reinvent themselves and regain the market of gamers they once had.  In September 2012 they came out with “FarmVille 2.”  To make sure that “FarmVille 2” was a complete success Zynga hired 50 works, including an executive from videogame maker Electronic Arts Inc, which help to create their new 3-D graphics.

Zynga has a lot riding on the success of “FarmVille 2” and has already warned investors that there will be losses next quarter’s financial outlook.  Along with delays of production on upcoming game launches.  They are trying hard to recapture their initial buzz by spending $171 million on researcher and development of their product.  By investing more money, they hope that users will be more enticed to buy more virtual goods.   Since their “FarmVille 2” launch in late September 2012 they only had 8.2 million users per days, which is far from what they had expected.

Zynga competes on a differentiation approach, by making their games free they have to make users want to play their game.  For instance Zynga create a unique soundtrack to their game “CastleVille” and also revamping the image to “FarmVille” gave Zynga their competitive edge.  Zynga also witnessed a quick product life cycle with “FarmVille”, which lasted about two years.  When  “FarmVille” reached it’s maturity in 2010 it had over 32 million users and had less focus on changes of the game.  During its decline many other games distracted gamers with new ways to win prizes and to get ahead in the game.  With the new “FarmVille 2” it is still in its introduction but Zynga had planned a forecast that showed more potential daily players than it currently has.

Zynga is fighting an uphill battle trying to regain is popularity.  But it might take more than changing the image and making incentives for users to continue playing and to get old users back.

 

http://online.wsj.com/article/SB10000872396390444657804578053171742809466.html?mod=WSJ_business_LeftSecondHighlights

 

2012 Could Be The Best Holiday Shopping Season In Years

Posted on by f1221sahmed

Investors are looking for early Christmas presents.  By that I mean we need insights into whether this Christmas season will be a good one or bad one. The National Retail Federation expects holiday sales to increase by 4.1 percent, which promoted FedEx and UPS to do their own forecasting.

FedEx is forecasting a 13% increase during the holiday season this year. An increase in Internet shopping is promoting FedEx to forecast an increase of holiday shipments in 2012. According to FedEx, the forecast for the holiday is 280 million shipments that would be a record number. FedEx is also preparing to hire around 20,000 seasonal workers. This hiring would be in addition to the 300,000 permanent workers company employs worldwide.

United Parcel Service known as UPS said it expects to be up between 5 and 7 percent from last year. The CFO said it expects to ship more than 500 million packages from Thanksgiving to Christmas. Kuehn said 40% of the packages are shipping directly to the consumers, which will be the largest increase ever.

Many of the analysts believe this could be the best holiday season in years for everyone. According to the article, “three-fourths of retailers expect a boost in holiday sales this year, which in turn means they’ll need more help from job seekers”. It’s a crucial time for all retailers, many of them are hiring early.

Do you think we will have a strong holiday season or the forecasts are just to manipulate the market?

Article

 

 

Knowing the Future, for the Stability of Present

Posted on by f1222sghatila

Knowing the Future, for the Stability of Present

Everything in our daily lives requires a form of forecasting for us to be able to predict what to wear, consume, and safety. Hurricane Sandy, which is forecasted to hit the East Coast, helps people with their safety and precautions we  have to take to secure their lives, family, and home. Many people are planning to evacuate because of the information given about the hurricane in advance. We depend on these types of information for our health and safety. Depending on whether the weather channel says if it will rain or snow, we all dress according to that. Due to the current weather situation, many fliers have to consider their delay and canceling of flights. This delays a lot of business process and other situations and airlines have to consider this when rescheduling flights for the process to run again. Forecasting is a major aspect of our life and the information is depended upon for the present to be as smooth as possible.

Most retailers have already forecasted for the sales of fourth quarter, holiday season. They want to produce as much as the demand is suggested for, their revenue depends upon it. Forecasting is a major  aspect of any job. It tells you how many to hire to produce a certain amount, how much of the product will be sold, and this information is critical because competitors thrive on an advantage to do better than you do. Halloween season creates a high demand for candy, which if forecasting did not occur either we would not have enough candy or surplus or either situations have negative consequences on the revenue and growth of the company.

Apple is on top of the technology world right now. Their products are sold and back ordered for months because their demand is incredible. Currently IPad mini in white are completely sold out and even though black ones are still available, their inventory does not have enough for those who demand it. They are losing on business for those that could have been sold if availability was an option. Having a demand forecasted accurately would help the business grow and keep consumers happy. Loyal customers will always stay as long as possible but those who are indecisive about a brand will potentially lose a customer if forecasting is not done accurately.

In what other ways do we use forecasting for our daily lives?

http://www.chicagotribune.com/business/breaking/chi-airlines-ask-fliers-to-reschedule-due-to-big-storm-20121026,0,3996884.story

http://www.chicagotribune.com/business/breaking/la-fi-tn-apple-white-ipad-mini-20121026,0,4979541.story

Are Smartphones Too Smart For Our Own Good?

Posted on by f1222jgruszka

Although the term is commonly know, identity theft is when someone pretends to be someone else by assuming that person’s identity.  This is usually to obtain some sort of financial information or some other benefit.

In years past, it was common for someone to have their wallet stolen and their accounts drained.  However, today there is a spike in a new form of identity theft.  Certain banking branches are releasing applications that allow users to access their financial information via their smartphone.  For example, Chase’s smartphone application allows for the user to check their financial balance, transfer funds, and even deposit checks.   This initially seems to be very convenient for smartphone users.  However, this has become a very serious issue today.

Recently there has been a number of seminars taking place.  These seminars began in 2008 courtesy of the National Foundation for Credit Counseling.  The seminars have shifted gears.  They are now strongly urging the protection of financial information as it is used through smartphones.  “Although smartphones brought great convenience into people’s lives, they also brought with them another opportunity for thieves to access personal data and use it to their advantage,” foundation Vice President Gail Cunnigham said.

After this statement, the article explains that this form of identity theft is taking place due to weak security by the smartphones.  “A study by Javelin Strategy & Research found that smartphone users are 33 percent more likely than non-users to become victims of ID theft.”  I don’t know about you, but I don’t want to fall into that 33 percent.

The article expresses a number of ways to help protect yourself from this form of identity theft; one example, “protect your smartphone with strong passwords.”  This seems to be somewhat of a give-in; however, what part do the smartphone manufacturers, designers, and producers play in all of this?

Do you think it would be an ethical undertaking for companies such as Apple to make it a requirement that you use a password?  Would it look good on Apple’s behalf if you had to set up a password when you turn your new iPhone on the for the first time?  I know that certain varieties of Motorola phones have a fingerprint option for a lock.  Do you think this type of need or feature only appeals to people who might have “more to lose,” or would it appeal to the average college student as well?

If these companies were to implement a new security strategy, do you think it would be beneficial for them to zero in on, or forecast based on specific demographics who would see more value in the added security measures?

Here is an interesting video about this topic:  http://www.youtube.com/watch?v=g5_H9dxUO_g

Link:  http://bit.ly/RnqhFc

A Storm’s A Brewin

Posted on by f1231ivboneva

storm

With hurricane Sandy quickly approaching the East coast, it is hard not to wonder why these storms are coming in stronger and later than ever. The Chicago Tribune published an article today examining the factors contributing to these “super storms” and all facts point to global warming.

Amanda Staudt, a climate scientist for the National Wildlife Federation, explains that climate change is not the sole cause of catastrophic weather events, but instead intensifies their damage and severity. She believes that since the Earth has become increasingly warmer, the length of hurricane season has increased, and the numbers support her conclusions. As industrial societies began burning fossil fuels “in great quantities in the late 19th century… the average global temperature has risen between 1.5 and 2 degrees Fahrenheit.” In addition, the water temperate in the Mid-Atlantic is 5 degrees higher than the average. Because of these warmer climates, out atmosphere retains 4% more moisture than it once did 40 years ago. Scientist predicts that by the end of the 21st century “hurricanes could dump 20% more rain than it does now.”

This article relates directly to the ethical and social responsibilities companies have in an effort to preserve the environment. Along with providing ethical working conditions and accurate financial statements, companies should use environmentally friendly resources and dispose of their products in a safe way. It is the manager’s duty to ensure their business is not harming people or the environment in any way.

Alternatively, city officials of New York, New Jersey, and other large cities on the East coast are taking every precautionary measure to ensure people stay safe during hurricane Sandy. Officials have closed down the entire subway system in New York, hired additional electricians from all around the US, and canceled hundreds of flights and trains to and from LaGuardia.

I find this forecasting to be a great sign of successful management by the city officials, but what do you think? Do you feel that they are over-hyping this storm, like many believe happened last year with hurricane Irene? Will the increase of this ‘Super Storms’ encourage companies to become greener?

http://www.chicagotribune.com/news/nationworld/la-na-nn-hurricane-sandy-heads-to-northeast-20121027,0,177959.story

Forecast Schmore-cast: Is Forecasting pointless in today’s economy?

Posted on by f1222nhassan

 

World leader and the largest in the advertising and marketing corporation, WPP, has decided to cut its full year growth outlook forecast after the discovery that clients have cut on spending for advertising due to the economic crisis. http://online.wsj.com/article/SB10001424052970203897404578077941669547434.html?KEYWORDS=marketing

WPP has has looked into expanding into more international markets. Currently making more than two third sales in Latin America the Middle East, Central and Eastern Europe and Asia Pacific, WPP’s goal is to increase sales by forecasting for the next three and four years. However, their forecasting hasn’t been 100% accurate recently after showing that the markets in Brazil have slowed by 1.9% in their third quarter from 3.6%, sales in North America have dropped .4% and a 2.1% decline in Europe (Bender). In August, WPP ended up changing their forecasts of high expectations to lower growth expectations that advertising needs from clients would decrease, which ended up decrease particularly in the health care, call center and public affairs market. Even in their most popular time of client expectancy was at an all time low in September.

I believe that there have been many challenges for many companies to forecast the growth rates in the market with the current economic crisis which has set many companies back. Large companies such as Fannie Mae, GMC, Bank of America and many more major corporations primarily in the financial sector have had the greatest impact.

The question is, if forecasting isn’t providing a beneficial outlook for the future of a business, what else can businesses do to try to predict their future outlook within the market place? With the economies aggregate behavior of employment, output, and prices shifting since 2008, is cutting off the full year growth outlook such as WPP has decided to do, the best option?

Ford’s European Struggles

Posted on by f1231aadamiec

A new article in the Wall Street Journal explains that Ford Motor Company has come up with a drastic plan to reduce operating losses in Europe due to its large decline in European sales.  The company plans to close three assembly and parts factories, cut 13% of their workforce, and reduce its new-car production capacity by 18%.  The cause for this big change is because of the continuous poor sales in Europe and forecasts that say sales are not expected to get any better in the near future.  These projected losses are one and a half billion dollars for this year and next.  The new plan will hopefully decrease operating costs for Ford by $500 million in the next two years.

The plan would decrease their production of vehicles produced in its Europe plants by 206,000, and also decrease the workforce by 6200 people.  According to the article, “Ford’s plans are the most drastic by European auto makers as they cope with the industry’s chronic overcapacity.”  So this plan is Ford’s way of matching capacity to demand, and two of the ways that a company can match its capacity to demand after overproducing are by making staff changes, in this case laying off workers, and by closing facilities, which Ford will do for three of its plants.

This restructuring plan is similar to a plan implored by CEO Alan Mulally in the U.S. in which Ford cut 30% of its workforce and reduced its plant capacity by 25% and has showed some success.  Ford hopes to duplicate similar success in Europe with this strategy.  The profits from the U.S. and North American sales have, so far, been able to offset the losses in Europe.

One of the plants in Genk, Belgium that Ford plans on closing was already operating at the lowest level of any plant in Europe.  The design capacity of the plan allowed it to create way more vehicles than they were, so the design and effective capacity were way higher than the actual production of the plant giving it poor efficiency.  The plants in Europe were not producing at the optimum operating level.  The tricky part for Ford is knowing the optimum capacity because with sales not expecting to increase anytime soon, it is hard to determine the level of output they need.

One question I had was even though a similar strategy worked for Ford in the U.S. is it possible to have the same success in Europe?  I think it would be difficult to repeat the success because the U.S. is just one country while in Europe it would be across multiple countries with different regulations and unions.  Will this ultimately decrease the losses in Europe?

http://online.wsj.com/article/SB10001424052970203897404578078360301276102.html?mod=ITP_marketplace_1

Netflix “Forecasting Error” Aftermath

Posted on by f1221tbarbiaux

 

Netflix has been on a bumpy road due to managerial decisions that led some customers very unhappy. Around a year ago, Netflix decided to split up into two companies that separated it’s DVD rentals and instant online viewing of movies and television shows. The rebranding, along with pricing changes and some pretty bad PR, had many customers drop their Netflix subscription. There was definitely a need for change, so the company would not go under and could return to profits. This is where the importance of forecasting comes into play.

 

Netflix made some changes and recently released their third quarter earnings to the public. After the second quarter, Netflix returned to profitability and again in the third quarter. There was one issue that CEO Reed Hastings addressed in his third quarter investor call. He stated that the growth was “within the range of guidance from a year ago, although not from Q1.” He made it clear that it was a forecasting error instead of a stunt in overall growth. Netflix had to lower its own forecast by two million subscribers, even though it grew by five million subscribers this year.

 

I feel that two million is a big number to miss by an incorrect forecast. Why do you think that they missed this by this big of a number? Do you think Hastings is just trying to make light of the situation by saying that the forecast error has not really affected them? Is he doing this to just reassure his company is moving forward and continuing to grow? Will the forecast error affect the company in the future?

 

Hastings is optimistic about the future of Netflix due to strong growth abroad with recent expansions to Europe and South America. Also, Netflix is trying to compete with Amazon, Hulu, and HBO by the high value of exclusive content deals that Netflix has already and is still acquiring. Hastings has made it clear that “the outlook (for the company) has not changed” even after the disaster of splitting up the company.

 

http://techcrunch.com/2012/10/23/netflix-ceo-reed-hastings-subscription-growth-miss-was-a-forcasting-error-long-term-outlook-still-positive/

Beats for the boss, Beats or Bose?

Posted on by f1224arodriguez

With the ever expanding market for newly released electronics and the countless accessories released for the past, current and future versions of these products on the market, many companies are looking to develop the next new electronic out there for each company’s respective target market.  However, recently Beats headphones have expanded the current market to include business professionals and executives, stating that they, “…want something that goes a little better with [their] Brooks Brothers suit.”

At the price of almost $300, an executive comfortably sitting on a long flight, for example, now has a device that is “good for sound quality, noise canceling, and sturdiness.” However, the price for just the logo, a new design and an endorsement from Dr. Dre does not justify the high product cost. In fact, competition such as the makers of Bose headphones produce the same item, with very similar features that include noise cancellation, better sound quality, and sturdiness, amongst other feature around the same price. What’s the difference? Well, Bose products for one have been on the market a whole longer than the Beats counter part. Bose has also not specified their target market but generally targets the most avid music listeners and not just young urban music listeners. Ironically, what Bose did before Beats was to acquire more market share and sell their product to a larger target market rather than the narrow range of music listeners aquatinted to Dr. Dre’s music and subsequently the products of his business. Bose did this by having an entire audio line of high quality music accessories.

Evidently, it was in the best interest of Monster, the Beats headphone manufacturer, to have possibly taken the sales numbers of their competition, upon the release of their products, to generate forecasts. This could provide an idea to determine how the Beats headphone would fair in a market where the next new accessory with newer features, a sleek and stylish model and quality sounds would sell. If anything, Monster would have at least some data to predict sales trend lines and production forecasts to be as profitable and cost effective as possible.

What could have Beats audio done differently provided that they could access competitor statistics to generate their forecasts? Since both brands are in the audio industry and make very similar products, does the price reflect a mass manufacturing approach to their productivity for greater profits?

Wong, Vanessa. “Beats’ New Headphones Are for the Corner Office” 2012.  Bloomberg L.P. 18 Oct. 2012 <http://www.businessweek.com/articles/2012-10-16/beats-new-headphones-are-for-the-corner-office#r=hpf-st>

Inventory equals cash?

Posted on by f1234fshamoun

Just few weeks ago I didn’t know the importance of forecasting until recently I learned how important it is to forecast in any business. I never thought of inventory as being cash I just thought of it as a bunch of stuff, and materials. I found this article in Forbes magazine that talks about how inventory is your cash. It discuses how you are supposed to treat your inventory, and how you are supposed to track all your inventory so that you can gain more cash then losing cash and better business that will make your consumers happy.

Having a business is not just about buying and selling you have to pay attention to what’s coming in and what’s going out and in order to do that you have to track everything. My family has a business and when they are doing their orders they do forecast everything. First time I saw them I didn’t know what they were doing until recently when I learned about it more. It’s not about having a lot of inventory in your business you have to see how much was sold, how much you have in hands, and how much you think will sell that’s what you bring in. By tracking and forecasting your inventory it will save you a lot of money because you don’t extra inventory sitting in stock that will not sell. The bigger the business you have the harder it gets to keep track of your inventory so that’s why everything has to be monitored so save you money.

As a business owner you might think you are keeping costs down, but without using the right steps it will get very difficult so you must track the entire inventory to make the business grow. For example, if you own a business that sells fresh products you want to make sure that you get new products in everyday you don’t want to order to much and it will stay there consumers won’t be interested in shopping there anymore because they don’t see fresh products. By forecasting and mentoring everything that’s coming in and going out will help you get fresh products everyday and will help your sells grow and be a successful business. This will also help you with product life cycle if a product was selling a lot and then it slows down you don’t want to keep ordering it for your inventory and it won’t sell. There are many systems to help a businessperson to track and forecast their products. There are special computers that will help just putting the information into the system and it will automatically tell you everything that you have and need in your inventory.

What do you think about inventory equaling cash?  Do you think forecasting will help in having better successful business?

 

Source: http://www.forbes.com/sites/davidkwilliams/2012/10/13/your-inventory-is-your-cash-handle-with-care/

your-inventory-is-your-cash-handle-with-care