Analysis Report Four - Trend Analysis and Value Creation

Executive Summary

Everyone knows that technology has been and will continue to increase each year. Today, organizations build value based on digital technologies, and decision-making motivated by data to not only stay consistent when talking about competition but to also improve customer experience. The articles we had to read explain that effective digital businesses create value through models like marketplaces, subscriptions, and advertising while using specific data to help and support long-term growth. Also, the research shows that maintaining value is more difficult than trying to accomplish faster growth because organizations must focus on fitting the right needs for customer satisfaction and expectations and adjust to competition. This report shows and explains how trends can help point out patterns in customer demand and sales performance throughout time. After using the North wind database, it shows how the SQL queries and visualizations identifies changes in revenue across different time periods and order activity. This analysis shows how organizations can use historical data to introduce seasonal patterns, analyze business performance, and how to make overall better decisions for the organizations. The findings show that organizations that still consistently look after business trends are in much better shape to build value by being able to respond faster to changes in customer behavior and distribute resources more effectively.

Introduction

The fast growth of digital technologies have really changed how organizations build value and compete in today’s business world. Instead of relying totally on on regular products and services, most organizations use digital business models and customer data to not only create revenue but to improve customer experience. The readings we had to read highlight that effective organizations build value by really focusing on customer needs and wants, using technology, and constantly changing their models as the technology improves over time. The Harvard Business Review Article kind of strengthens the argument of these topics by explaining why some digital technology platforms have great success with generating revenue and while others struggle with it. The authors explain that creating value depends on more than just fast growth. Businesses need to consistently build relationships with their customers, manage network effects, and find a way to not let your customers leave for a competitor. The Wall Street Journal Article explains these concerns by talking about Apple. Apple combined software, hardware, and subscription services and this created huge customer satisfaction and loyalty and generated revenue, but increasing difficulty with over competition showed that organizations need to somehow balance revenue with innovation. For a company or organization to remain successful with these digital technologies, their focus needs to be on building that customer loyalty and trust. “The 7 Most Successful Business Models Of The Digital Era” talks about how organizations selected certain business models such as advertising-supported, e-commerce, freemium, marketplace/platform, subscription, aggregator sites, and crowdfunding. The models let organizations reach larger customer bases, build revenue, and use technology to their advantage. Today, digital technologies continue to increase every day, organizations that successfully combine each of these business models have a higher chance of adapting quicker to the changing of customer expectations than organizations that do not.

Outside Research

The topics talked about in the readings are very important, especially today, because organizations continue to invest in digital technologies. To fully understand customer behavior and come up with competitive advantages, organizations rely on trend analysis. Digital technologies have become very valuable because it lets organizations collect data, improve customer relationship, and improve products and services. Amazon shows how various digital business models can somehow work together to build value. Amazon combines subscription services and e-commerce through Amazon Prime. When customers buy items through Amazon, it goes right to their data file, so it improves Amazon’s ability to recommend products, improve inventory, while also improving customer trust and loyalty. Also, there is another example on how to build value efficiently through Apple. What has been a huge factor in making money for Apple is the revenue created through subscriptions and the App Store because selling physical items has gone down. Even though Apple created strong customer trust and loyalty through high costs, it also led to higher risk of increased attention from the government. These difficulties show that organizations needs to balance money with customer value to remain successful and competitive in the future. The Harvard Business Review Article explains how digital technologies need to increase network effects while trying to decrease risks like multi-homing. Amazon did a good job at growing into complementary services, while other organizations have really struggled with making money. These examples show off that building value long-term depends on creating strong networks rather than just relying on how many users.

Data Visualizations Question 1- How has total order revenue changed by year?

SELECT  
       strftime("%Y", OrderDate) as year,
       SUM ("Order Details".UnitPrice * Quantity) AS total_revenue
FROM Orders 
INNER JOIN "Order Details"
ON Orders.OrderID = "Order Details".OrderID
WHERE year != "NA"
GROUP BY year
ORDER BY year

ggplot(data = myquery1,
       aes (x = year,
            y = total_revenue,
            group = 1)) +
  geom_line ()

Question 2- How did monthly revenue change during the highest revenue year?

SELECT  
       strftime("%m", OrderDate) as month,
       SUM ("Order Details".UnitPrice * Quantity) AS total_revenue
FROM Orders 
INNER JOIN "Order Details"
ON Orders.OrderID = "Order Details".OrderID
WHERE strftime("%Y", OrderDate) = "2023"
GROUP BY month
ORDER BY month

ggplot(data = myquery2,
       aes (x = month,
            y = total_revenue,
            group = 1)) +
  geom_line ()

Recommendations for Industry

Organizations should invest in trend analysis and decision-making based on data. Also, businesses should look into building and improving their digital ecosystems. This can be done using customer data. It helps improve the products and services while building and maintaining customer trust. The articles mention two big organizations in business, Amazon and Apple. They mention the successful strategies these companies use to build value and maintain long-lasting relationships. They focus on digital services and personal experiences. The importance of looking at performance at multiple levels was obvious in this report. It is extremely important to consistently look at yearly revenue and understand what it means for the business. This will give executives a good overall understanding of fast business growth. Monthly trends are crucial to understanding customer patterns and when products are flying off the shelf. Likewise, seasonal patterns show exactly what should be sold at certain times.Also, making sure that areas requiring more attention are looked into is very important. Organizations that look beyond overall revenue and check areas that may be overlooked can create a positive impact down the road. It is a great way to find key growth areas and respond quickly to seasonal and monthly changes. The last thing talked about was the importance of a culture of continuous improvement. This can be done by combining business strategy with data analytics. Historical trends should be reviewed consistently to support future forecasting. Along with this, improving operational efficiency is key to encouraging constant improvement. Historical trends will guide strategic planning to help build a future based on evidence. Organizations should consistently use their data to evaluate performance. It will increase and create value, while also building big competitive advantages. Using data sets companies up for long-term success in an economy that continues to become more and more digital.

References

Zhu, F., & Iansiti, M. (2019). Why some platforms thrive and others don’t. In Harvard Business Review. https://hbr.org/2019/01/why-some-platforms-thrive-and-others-dont

Mims, C. (2024, January 26). The main driver of apple’s success has become its biggest liability. WSJ. https://www.wsj.com/tech/personal-tech/apple-vision-pro-walled-garden-mac-iphone-app-store-c4838278

Marr, B. (2023). The 7 most successful business models of the digital era. In Forbes. https://www.forbes.com/sites/bernardmarr/2023/03/14/the-7-most-successful-business-models-of-the-digital-era/