forecasting

The iPad Mini: Bigger Problems for a Smaller Consumer?

Posted on by f1222jgruszka

 

It comes as no surprise that Apple has done extremely well over the past year.  They have released a new iPad, the iPhone 5, and are now apparently gearing up to release the all new iPad Mini.

There have been many rumors circulating around the release of the new Apple product.  However, none of them can be stamped with a guarantee.  Apple has been very quiet when it comes to questions about the new iPad Mini.  There are many speculators out there though.  Some of these speculations are as follows:

  1. The Screen:  The screen of the iPad Mini will be smaller than the previous iPad models.  It is said to be roughly 7.85 inches (diagonally).  This does not seem to be a shocker though, it is called the “mini.”
  2. No Retina Display:  The iPad Mini will not have the same screen resolution as the previous iPad models.  The newest Apple products are highly valued for the excellent screen quality.
  3. The Lightning Port:  This is a new feature that is also part of the iPhone 5.  The Lightning Port is where the iPad Mini will connect to supplementary technology, as well as chargers.
  4. Storage:  The iPad Mini will most likely fall in line with other Apple products.  The model(s) will most likely be available with 16, 32, or 64 GB storage components.

The iPad Mini seems to be a great idea to the naked eye.  People say it will be more convenient than the original iPad and easier to use.  There are also many rumors circulating that say the iPad Mini was designed so that it can be marketed to children and people who might have a lower income.  The iPad will be cheaper given the size of the product.  This could allow for lower income consumers to purchase and use the Apple product.  It is also said that the iPad Mini is going to be marketed to lower level educational institutions.  The smaller size of the iPad Mini allows for it to be more functional with children and young teenagers.  The interaction between child and technology allows for more efficient teaching inside and outside of these educational institutions.

Although this product sounds amazing, there are many questions that come along with it. There are a number of skeptics who are saying the iPad Mini is just simply a scam.  It is nothing but a shrunken version of the iPad.  It also seems to be very convenient for Apple to be releasing this product, which is going to be heavily marketed towards children, right around the holiday season.  The consumers will not only have to purchase the iPad, but they will also have to purchase the new adaptors for the new Lightning Port.  This being one more thing the consumer has to spend money on.

Apple is well aware of what they are doing.  They know that people have millions of accessories for their Apple products.  The release of new products that require adaptors is a whole new revenue stream for Apple.  Old products are going to be replaced by new products that are able to function with the new Lightning Port.  Some of these adaptors already cost upwards of $3o.00.  This is interesting too because Apple has to now forecast a whole new sector of business.  The Lightning Port provides Apple with a whole new realm of consumer purchases.  Adaptors will need to be produced and consumers will purchase them.  The iPad Mini also requires a new level of forecasting.  If they are in fact going to market to a younger generation, they will have to compensate for many younger age groups, schools, and other institutions.

Apple is the only one who can support or disprove these speculations.  However, one could still ask – what do you think?  Is Apple just trying to pull a fast one?

Source:  http://www.informationweek.com/hardware/handheld/ipad-mini-what-we-know/240008988

 

Should we look back to the past or walk forward?

Posted on by f1224cwong

On our third and fourth week of classes, I found learning about the precedence diagram, business strategy, and forecasting extremely interesting and helpful. In one of my school organizations, I work with a team to plan several cultural events per semester; and a problem we had last year was that we had to cram many tasks a week before the big event. Also, we planned for 400 people when only about 250 actually attended. I believe learning about these operational components will help me better plan for events this year.

 As the precedence diagram, business strategy, and forecasting relate to the general idea of having a business plan, I found an article on ‘Forbes.com’ that seems to disagree with having a business plan at all. The article, “Bob Dorf: Throw Out The Business Plan”, talks about a “serial entrepreneur” who gives a speech about business plans being all fiction. He believes that time and money should not be spent on forecasting the number of customers a new start-up business will have because these forecasts are never right. Instead, businesses should spend their time and money on gathering “aggressive feedback” to truly understand whether a product would or would not sell. A start-up team should have members falling into one of the three categories: the hackers, hustlers, and artists. The hackers are for coding, hustlers for gathering feedback, and artists for designing graphics.

 In my opinion, I do agree that sometimes forecasts can be extremely off; however, I also believe that there is no harm to having predictions. Forecasting allows you to set prices, deadlines, and goals to reach. With this, I do not disagree with his advice. Aggressive feedback should be taken and I like the three categories he’s created. In another post that I have commented on, I learned the importance of product design and how it suades the decision of a consumer.

 Should a company have a business plan? Should a business look at past data to forecast or possible future data through feedback?

Sources: http://www.forbes.com/sites/nyuentrepreneurschallenge/2012/09/30/throw-out-the-business-plan-bob-dorf/

Images: http://www.bestlegalmarketing.com/internet-marketing/evaluating-current-state-of-practice/

Move over Nike… FILA’s making a comeback

Posted on by f1234csaucedo
Paris Hilton for FILA

When considering our class discussion of product placement and the product life cycle, I wondered how that would apply to a company that was already established and looking to ‘revamp’ their image.  A newer company has the advantage of a clean slate and a fresh approach to whatever service or good they are looking to provide; yet a company that already has a reputation that they want to break free from must have a well thought out strategy to help them accomplish this.

I came across this article in the Economic Times that was a live example of what I was curious about.  How FILA’s Gene Yoon plans to build a strong brand presence in India The article’s focus was Gene S. Yoon, Fila’s global chairman, and his strategy to break away from FILA’s image as a non-aggressive brand and become successful in India’s marketplace.  This article was an interesting supplement to several of our class topics, but especially on product life cycles and product decision.

The Indian marketplace has become the focus of FILA’s strategic efforts at competitive advantage.  Bata was the original company that dominated the marketplace; however Nike and Adidas have found success in this marketplace and FILA is hoping they will as well.  While Nike is known for “Just Do It” and Adidas says “Impossible Is Nothing”, Fila’s first priority is to decide on a tagline that will effectively differentiate them from their competitors.

Fila’s main strategy for competitive advantage appears to be rapid response.  FILA is one of the only brands that allows each retailer to devise regional marketing plans.  Aside from the logo, FILA gives retailers creative freedom in regards to color, fabric choice and design allows them to tailor each product to local preferences.  This strategy will assist in the growth of the brand throughout numerous markets.  FILA is also focusing on differentiation and their general ‘cool factor’ by signing on celebrities, such as Paris Hilton, which aided in their success in outgrowing other markets in Korea.

FILA is currently present in 40 exclusive stores in India, and Yoon forecast’s the number to increase to 100 stores by 2014.  I believe in Fila’s strategy to succeed in the Indian marketplace, however I do think they need to have a more focused strategy.  I understand the idea behind regional marketing plans, I just think that they would be more successful if they have a definitive tagline and ensure that each product that is developed embodies what they are trying to represent.  FILA expresses their interest in being a lifestyle brand, and in order for them to prevail, focus is needed in all areas of product development.

Do you believe that FILA’s strategic plan will be successful? Or do you think that regardless of their attempts, they will not be able to break away from their reputation of being non-aggressive and not very “cool”?

Schools out, do you know where your kids are?

Posted on by f1221mcaruvana

There are plenty of days off during the school year for elementary schools and junior highs. Whether it be for Martin Luther King Jr Day, Columbus day, Election Day, Pulaski Day, or even those teacher institute days– kids are off school. The question though is, what to do on a day off from school? Since working at an indoor trampoline park, I’ve found the answer to that question and that is come to where I work and jump around with friends. However, that’s hard to do if my job doesn’t open until 2pm during the week and a lot of our staff are in high school and still have school on those days. This is where forecasting comes into context. Since being open for a year now, the managers now have a better idea of sales and turnout for special holidays. With that information they can forecast the number of customers on days where the surrounding school districts have days off.

Being the main office assistant, I was asked a couple of months ago to create a spreadsheet of all the surrounding school districts’ days off from school. The task involved me having to look up all the school districts in the area 2012-2013 school calendar and from there create an easy-to-read spread sheet of every non-attendance school day. The project itself took me about a week to do but with the final product the managers were able to use the list as a tool to forecast the following: sales, turnout, number of staff needed, and the cost benefit of opening up the store early. The list isn’t the only thing that the managers look at to forecast for the days off. They also look at the previous year’s (for that specific day off) sales and turnout as well as what day of the week the holiday/day off lands on and how many inquiries we’ve received about birthday parties/group reservations for that day (at an earlier time than we open).

Taking into consideration all those factors, I’ve notice the importance of forecasting and how it can really effect a company’s sales if not done the right way or even at all. I have seen the problems that can occur when forecasting is not done such as under staffing, not opening up earlier when we could/should of, and unhappy customers.

Cash Strap? Need a Job this Holiday Season?

Posted on by f1224hpham

With the holiday season approaching fast, many major retailers are opening up more jobs in preparation for the high demand of the holidays. Experts estimated about 700,000 new, temporary jobs for this year, which is a slight increase from last year. As the economy is slowly moving out of the recession, many American families are paying back their debts, which give them the extra cash to spend this year. Hence, there is a great outlook for this holiday season for those of you who are looking for a little more income or just taking advantage of the employee discount that most of these retailers offer for their employees.

Looking at previous years numbers, most of these retailers are retaining their seasonal workers well over the holiday season. These temporary, seasonal jobs are turned into full-time positions, which for most workers are a good thing if they are looking for a permanent job. I have started seeing a lot of companies doing this nowadays. Rather than hiring full-time workers right from the start, companies would look into their pool of temporary workers first before hiring outside workers for any new positions. I’ve had a taste of this through the internships I have had done in the past. Most of the firms that I want to work for usually hire from their pools of interns and offer little to no position to those who have not worked an internship at their firm.

We’ve talked about forecasting in class, and this article ties in with this topic. With the increase in demand for goods and services this holiday season, major retailers are hiring more workers to meet this demand. Some even go as far as to open temporary stores, i.e. Toys “R” Us, in anticipation for the busy holiday rush. I think that this is a good boost for the economy as it may opens more, new jobs in the future for some people. Also, for companies, this is a smart move because they do not have to deal with making enough revenue to cover for the fix costs that come with permanent stores throughout the year. They can just rent a store for three to four months just in time for the holiday demand.

Questions to consider: Are you looking for a job? Would you be interested in becoming a seasonal worker? How are these companies handling their forecasts? What are the pro and cons of the increase in jobs during the holiday season?

 

http://www.forbes.com/sites/meghancasserly/2012/10/02/700000-new-retail-jobs-for-holiday-2012-heres-whos-hiring/

Shop Like Your Life Depends On It

Posted on by f1233amarjanovic

With the holiday season quickly approaching us, most people are already beginning to think about who they have to buy gifts for, if not already starting their online shopping. One aspect of the holiday season that escapes most shoppers, though, is their overall contribution to retailers and the economy overall. The holiday season is known to be the most important time of year for retailers everywhere; contributing to 40% of their annual sales in a period of about two months. Thankfully every year around this time, forecasters begin looking at last year’s holiday sales in order to predict as best as they can the holiday sales for this year.

At least ten entities are in charge of making this prediction and this year their predictions range from a 3 to 4.1 percent increase in holiday sales over last year. Each forecaster’s predictions are different because of the varying methods that they use. Most importantly, though, is the fact that all of this year’s predictions are lower than the actual gain in sales of last year, which was 5.8 percent.

Each forecaster takes into account different variables when predicting holiday sales each year. The National Retail Federation, for example, looks at sales from the previous month, the housing market, consumer confidence, weather, and employment levels. A mere increase in holiday temperatures could drastically decrease purchases of common winter items like jackets, scarves, and gloves.

Interestingly enough, these predictions only slightly affect retailers. By the time these forecasts come out, retailers have already ordered their merchandise for the holiday season. Unless there was evidence that consumers would spend much more than anticipated, retailers probably wouldn’t increase any of their orders. Other retailers who are afraid of being left with too much excess inventory this year may be inclined to offer better discounts, or begin discounting even sooner than last year.

With all the different methods of forecasting going on, it may come as no surprise that these forecasts are usually wrong, if only by a few percentage points. Some years the forecasts are very optimistic while in others shoppers spend much more than anticipated.

What do you think are some better if not more accurate methods of predicting holiday sales from year to year? If retailers have already ordered inventory months in advance, why are these forecasts so important? What do you think are the factors that determine high holiday sales one year and lower sales in another year?

http://www.indystar.com/viewart/20121004/BUSINESS/121004002/Shopping-Downpour-holiday-forecasts-vary-widely

 

What a store might know about YOU…

Posted on by f1233rpfeil

Many companies are using technological tools that change the way inventory management is conducted. In our fast paced, global market, companies cannot have idle assets and goods piling up. Inventory carrying costs can significantly impact the bottom line and congest cash flow operations. Accurately forecasting sales and demand is important in order to approximate the appropriate production volume to avoid these costs. How does a business deal with being too optimistic with its forecast and produce too much? It must find the most efficient ways to sell these extra units in the shortest amount of time. What type of technology is there that can solve the dilemma?

 

The Washington Post had an article covering one of the possible solutions. A law school graduate and entrepreneur, Fuentes, explored ideas on how to improve processes and sales within the retail store he worked for. He collaborated with his supervisor and executives regarding the problems he saw and how he can help them move products faster out of inventory.

 

Fuentes began experimenting with his new ideas with customers and said that he could possibly discount a particular item in two to three weeks and contact them if they were interested. He then tracked who wanted to be contacted and what item they were interested in buying at the discounted price. Before a product goes on clearance, it can be sold to some who is already interested. This system inspired Fuentes to create Lemur IMS. He describes it as, “An inventory management system for big-box retailers that connects local customers with local, slow-moving inventory.” He found this to be especially helpful to smaller stores that needed an edge to compete with larger stores in the community.

 

The Lemur IMS is effective because it increases revenue and more importantly, delivers personal attention and offers customers the products they want at a better price. This is fantastic because it decreases the amount of customers that turn to alternative competitors for lower prices or easier accessibility for the specific product they are interested in. If they like a product but do not want to pay that price, the store can offer to contact the person if the product is available at a lower price later.

 

A relevant trend and (obvious) concept that is providing customers with greater value is customization.  Lemur can be used on a tablet app, which is customized for each specific retailer. It can even go to the extent of tracking, “who is interesting in what product, at what time of the year and at what price.” Fuentes mentions that his tool for managing inventory is unique because, “It looks at all aspects of inventory information, not just velocity, cost, and revenue.” This deeper approach seems to be very effective. What other systems are available? What competitive advantages do they offer companies’ operations and inventory management?

http://www.washingtonpost.com/business/capitalbusiness/business-rx-inventory-management-system-company-needs-to-know-what-to-focus-on/2012/02/15/gIQARWt1NR_story.html?wpisrc=emailtoafriend

Can America keep up with its competitive Manufacturers?

Posted on by f1233pmazurek

 

China this week has made a huge statement especially in their workforce and the growing unrest of the working conditions in many of their factories. Due to poor wages and conditions over 2000 employees at Foxxconn’s plant got into a fight last week with management, and of course this occurred right before Apple’s debut of the Iphone 5. After a decade of peaceful interactions with management the employees have appeared to have had enough.

Some of the U.S.’s largest companies, such as Apple and Caterpillar, use Foxxconn in the creation of many of their products. If the Foxxconn plant were to revolt and shut down due to the lack of workers, what would this mean for companies like Apple or Caterpillar?

Analysts are saying that the cost of production has increased 15-20% every year for the past 10 years. Even though the cost is still relatively cheap, if these suppliers fail to meet the demand for our companies, could we see production move closer to home? The statistic that was determined is that China will still be cheaper by 7% in 2015. If these employees in the factories push for better wages and conditions, the cost will obviously need to be factored into all of the orders put in by U.S. companies. If the cost gets increasingly closer to what it would cost for these manufacturers to produce these products on American soil, do you think the U.S. companies would consider it?

“If there’s going to be social unrest, either related to the conditions in factories, or if the government can’t enunciate clear policies and the domestic political uncertainty plays out in anti-Japanese unrest, businesses are going to be reluctant to make long-term commitments in China,”

As of right now the chinese factories seem to be back in operation, but if costs continue to increase we could see the production move closer to home. Continue reading “Can America keep up with its competitive Manufacturers?” →

Free “Gas” for life? WHAATTT?!

Posted on by f1232mgluc

Elon Musk is a name you should be very familiar with as in my opinion he is the most influential entrepreneur/inventor today. He is best known for creating SpaceX, a private rocket and spaceship successor for NASA, cofounding Tesla Motors which takes aim to revolutionize the auto industry and Paypal the worlds largest internet payment system. Talk about accomplishments!

On September 24th, Elon Musk had unveiled the Tesla Superchargers, a revolutionary charging method for its line of high-end luxury electric sedans- the Model S ($77,400 – $105,400). The Tesla Superchargers will use solar energy to charge the Model S with 100 kilowatts of energy that will be good for about 3 hours of driving at 60 MPH in an impressive 30 minutes. The amazing feature of these Superchargers is that all Model S owners will be able to charge their vehicles for free, FOR LIFE. Musk claims that the energy captured by the solar panels will be more than what the vehicles will require. This allows Tesla to actually make money by pumping the excess energy back into the grid.

 

Musk had also revealed that this network of superchargers is a reality. At the time of the unveiling there are six locations in California ready for use. Within two years he plans to cover the United States with these stations in all “high traffic corridors across the US.” Long term (2 – 4 years) Musk plans to cover the entire US and southern Canada as well expanding into Europe and Asia.

First thing that came into my mind after seeing the map above is that this is a very aggressive forecasting model. They are targeting to cover the continental US in a very short period of time. On top of that they have future plans to expand into Europe and Asia. With absolutely no data on how many Tesla drivers will actually attempt long distance drives the Tesla team is taking a huge risk in investing so much capital in building this network of superchargers. The second issue they face is either under-use or over-use of the stations.

Lets face it; today these are very expensive cars for most Americans. With the base model starting at $77,400 I don’t see it having much mass appeal and that is needed to make such a huge network be feasible.
On the other hand, as the years go by the technology will surely become less expensive and there could be a Tesla in everyone’s drive way. With an explosion in these vehicles they may not keep up with demand.

As Tesla goes through its product life cycle they can better define their forecasts. From the looks of it they are very optimistic. What are your opinions?

Chime in and check out the press release in the link below:

Tesla Motors Supercharger Event

http://www.engadget.com/2012/09/24/tesla-supercharger/

Forecast: Apple up, Android down

Posted on by spr1333jroe

Forecasting is a very important process for any business. It is the process of predicting future events for the company. Forecasting is the underlying basis for all business decisions. Information gathered from it will not only help a company decide what is best for production and inventory, but also personnel and facilities. The use of it can significantly help a company in the long run.

 

I read an article recently that discussed the IDC’s forecast prediction for the tablet in 2012. As we all know, the popularity of tablets is quickly expanding. Due to this, there are many versions of the tablet, coming from companies such as Apple, Android and BlackBerry. It will be virtually impossible, however, for every company to succeed in the production of tablets. IDC has the BlackBerry tablet virtually nonexistent in the market. Their share in the tablet market was already significantly small in 2011, and it is only predicted to decline for 2012.

 

The two main competitors in the tablet market are Apple and Android.  While many people may believe that both companies will see growth in the market, IDC does not predict this to happen. IDC expects Apple to maintain growth, moving from 58.2 percent in 2011 to 62.5 in 2012, however they do not see the same for Android. Apple’s growth in the tablet market will come at Android’s expense. They are expected to fall from 38.7 down to 36.5 percent.

 

IDC’s forecast for Apple is no surprise, especially due to their popularity. Apple is known for its innovation, and is a trusted name in the technology field. Android seems to be having some trouble competing. What do you think Android should do in order to gain back share in the tablet market?

Resources:

http://news.cnet.com/8301-1001_3-57453525-92/idc-forecast-ipad-up-android-down-blackberry-irrelevant/