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Analytical Competition?

Analytical Competition?. What is analytical competition? Competing on the basis of data, math, and statistical analysis Trend favoring analytics Need for new sources of competitive advantage ERP and other software created ways to collect, store, and access large volumes of data

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Analytical Competition?

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  1. Analytical Competition? • What is analytical competition? • Competing on the basis of data, math, and statistical analysis • Trend favoring analytics • Need for new sources of competitive advantage • ERP and other software created ways to collect, store, and access large volumes of data • Analytical software has come of age • New generation of technically-literate executives at the helm

  2. Netflix and Analytics • Use of analytics • Movie-recommendation engine • Throttling • Pricing for DVD distribution rights • Analytical tools used by Netflix • Primary survey • Website user testing • Data mining • Channel analysis • Marketing mix optimization

  3. Other Examples of Analytical Companies • Harrah Entertainment • http://www.sas.com/success/harrahs.html • CRM + SAS Analytics • Total Rewards Cards – Credits for visits and play • Predict customers to target • Accurate estimation of customer potential value • Oakland As • Google • Procter & Gamble • Amazon.com

  4. Analytics for Competitive Advantage • Identifying profitable and loyal customers (credit card companies) • Optimize supply chain processes (CEMEX) • Hire and retain talented individuals (sports) • Better decision-making (Location analysis, investment decisions)

  5. Analytics in Sports • Baseball • Oakland A’s story • Traditional attributes of a great player did not reveal how he would perform in the field • Focus on actual player performance as revealed in statistics than on the potential to be great • Invented new metrics • On-base percentage • On-base plus slugging percentage

  6. Analytics in Sports • Baseball – Boston Red Sox Experience • Business need of having to win • New leadership (one of the owners was a hedge fund manager) • Hired an analytical consultant who practiced baseball statistics • Challenge of making everyone in the organization understand analytics

  7. Analytics in Sports • Professional football • New England Patriots • Analytics for team selection and stay below salary cap • Rates potential draft choices on non-traditional factors such as intelligence and willingness for team play • Analytics for on-the-field decisions • Whether to challenge a referee’s ruling • Analytics for improving fan experience at games

  8. Analytics in Sports • Professional Basketball • NBA and Analytics article • Houston Rockets selected quantitative oriented GM • Players value to the tam on and off the court • Examples abroad

  9. Web Analytics • Google Analytics • Yahoo Analytics • SAS Business Analytics

  10. Analytics and Sports Performance • Houston rockets (NBA) • 2007-2008: 55-27 (made playoffs) • 2006-2007: 52-30 (made playoffs) • 2005-2006: 34-48 • 2004-2005: 51-31 (made playoffs) • 2003-2004: 45-37 (made playoffs) • Patriots (NFL) • Super Bowl in 2004 & 2005, lost in 2008 • AFC championship game 2003-2008 (won 3)

  11. Analytics and Sports Performance • San Antonio Spurs • NBA championship 2003, 2005, 2007 • 2003-2008 finished first in their division four times • Ranked between 9th and 25th in team salaries in this period

  12. Limitations and Challenges • Need data (typically more data needed for better analytics results) • Top management should support • Analytical culture should spread to all important decision makers • Need to when to supplement analytics with intuition/experience

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