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1、Structured Problem Solving but both can work,The “theres a pony in here somewhere” approach,The structured analytic approach,Potential for rich powerful solutions,Scurry around analyzing tons of data to see if you can find something useful,Get the data,Potential for good (and mixed) solutions,Define
2、 problem and hypotheses,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 6,Defining the issue is the first step in the journey to final recommendations,Develop Conclusions and Make Recommendations to Implement,Find Insights,Analyse Data
3、,Gather Data,Form Hypotheses,So what? aha, new thought,What you should do and how,Define the Issues,What are the questions keeping you awake at night,Factual information gathered to prove or disprove hypotheses,Analyse what the data tells us,Statements that provide direction and structure for the an
4、alysis,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 7,Hypothesis formation ensures that our analysis is focused on our clients problem,Form Hypotheses,Define the Issues,Gather Data,Analyse Data,Find Insights,Develop Conclusions and
5、Make Recommendations to Implement,So what? aha, new thought,What you should do and how,What are the questions keeping you awake at night,Factual information gathered to prove or disprove hypotheses,Analyse what the data tells us,Statements that provide direction and structure for the analysis,2004 C
6、apgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 8,Hypotheses are developed in three steps,What are the real strategic issues? What is the impact on the organisation? What are the priorities,We think . . . It looks like . . . The right answer
7、 may be . . . The options could be . .,We believe this to be true . . . A series of statements, not yet backed by data Based on initial data search or expert opinions,A number of assertions need to be true for a hypothesis to be valid,Is there a market for white label insurance products,Direct chann
8、els are growing Retailers have a strong channel and brand There are existing products,Chubb Insurance can access new business by using the brand strength of Tesco resulting Is low cost of acquisition and profitable business,Define the question,Review and Describe Multiple Assertions,Form the hypothe
9、sis,1,2,3,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 9,A hypothesis should identify not only the issue but also the cause and the impact,Think through these three stages as you create a hypothesis to help you plan out how you will
10、 test it: What is the issue? What is the underlying opportunity? Where is the advantage? What do you think causes the issue? What are the key drivers of the process? What is the impact of the issue? How can we tell there is an opportunity? Why do we care,x is an opportunity .,due to.,resulting in.,2
11、004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 10,The Structured Problem Solving Process covers the life cycle of a consulting engagement,Define the Problem Structure the Problem Develop a Hypothesis Execute the Analysis Develop a Reco
12、mmendation Create the Communication Deliver Communication Follow Up with Client,Covered in current module,Covered later in the week,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 11,The Basics - Problem Solving Approach,2004 Capgemini
13、 - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 12,DEFINE THE PROBLEM,STRUCTURE THE ANALYSIS,FIND THE SOLUTION,Our problem solving approach produces results through answering a simple series of questions,Is there a problem or opportunity? If so wher
14、e does it lie? Why does it exist? What could we do about it? What should we do about it,Fine, but IWIK H2 do this,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 13,Source: Barbara Minto, “The Pyramid Principle,Always ask: “Are they Mu
15、tually Exclusive and Comprehensively Exhaustive (MECE),Logical pyramids are basic tools for this approach, helping you to define, structure and solve the clients problem,1.Ideas at any level in the pyramid must always be summaries of the ideas grouped below them 2.Ideas in each grouping must always
16、be the same kind of idea, and they must answer the same question implied by their summary 3.Ideas in each grouping must always be in a logical order,Main Assertion,Key Line,Deductively or inductively Trace course or time order Divide or structural order (e.g., Sales, Marketing, Manufacturing, etc.)
17、Classify or degree order (e.g., most important, 2nd most important, etc.,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 14,Logical pyramids increase the effectiveness of problem solving, results delivery and communication,Vertical str
18、ucture Horizontal structure Key line / narrative,but help ensure thorough analysis,while decreasing complexity,and increasing the power of presentations,Logical pyramids have simple rules,The effectiveness of our work depends heavily on how compellingly we can argue that the solution we put forward
19、serves the client best,The reasoning we have to apply to come to our solution is complex and difficult to summarize for brief client interactions,To build succinct and compelling presentations of our work, we use logical pyramids as the preferred communication style: Pyramids make information more m
20、emorable and meaningful They lead to a clearer definition of the problems we solve They structure our solutions to these problems and make them more compelling,Source: Barbara Minto, “The Pyramid Principle,which will make your work/life much easier to handle,2004 Capgemini - All rights reserved Xxx/
21、yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 15,Define and Structure the Problem,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 16,If you dont know where you are going, any road will take you there.” -Anonym
22、ous,Why problem definition matters,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 17,In structuring a problem, break it into smaller, easier-to-handle components AND start with the right definitions,US Car Market,Light Trucks,Passenge
23、r Cars,Big 3,Mini Vans,Sport Utility Vehicles,Ford,GM,Chrysler,But be careful why does this not work,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 18,Mutually Exclusive and Comprehensively Exhaustive,The most important rule for any s
24、tructure you impose,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 19,Divide,Clarify,DiagnosticFramework,Cause EffectFramework,StructuralFramework,Problem Structure,To help you solve a problem, your structure must: Disaggregate the pr
25、oblem into smaller and easier to solve components Be a “MECE” description of the problem and its possible solutions,Trace Cause,There are three ways to structure a business problem,Source: Barbara Minto, “The Pyramid Principle,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solv
26、ing and Hypothesis Generation, Author / 20,Head Hurts,Physical,Mental,External,Internal,Stress, Tension,Hypochondria,Bumped, Bruised Head,Allergies,Bad Weather, Sinus Headache, Flu, Cold,Brain Tumor,Water on the Brain,Example 1 disaggregate the problem into a diagnostic solution tree,SCooP,Source: B
27、arbara Minto, “The Pyramid Principle,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 21,Store is within shopping radius,do not know about the store,know about the store,never visit the store,enter the store,do not buy,make a purchase,d
28、o not come back,make repeat purchases,Location,Advertising,Signage, CI,Conversion,Customer Value,Root Cause,Example 2 (trace cause) disaggregate the problem into a cause-effect framework,How can TESCO improve its sales productivity (sales/sq.ft.),2004 Capgemini - All rights reserved Xxx/yymmdd - Str
29、uctured Problem Solving and Hypothesis Generation, Author / 22,Account type,Pack size,REPURCHASE Target market persuaded to repurchase,DISTRIBUTION Brand made available,TRIAL Target market induced to try,AWARENESS Target market aware,Product rejection,Price/value rejection,Frequency of use,Occasion
30、of use,Consumer profile,Pack,Display,Promotion type,Promotion tuning,Sell-in effectiveness,Feedback,If all lines of inquiry fail to reveal a problem source, go back to consider whether target market and consumer benefit have been accurately defined,Attribute awareness,Advertising recall,Advertising
31、spending rate,Media mix,Regional weight,Advertising communication,Target market,Consumer benefit,Region,Sales force coverage,Sales force direction,Trade terms,Example 3 disaggregate the problem into an intrinsic structure,Why does Wimpys not show the anticipated financial performance,Channel,Source:
32、 Barbara Minto, “The Pyramid Principle,Product spec,Selling price,Brand name,Packaging,POSITIONING Brand properly positioned for themarket,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 23,Exercise 1 Kmart vs. Wal*Mart: define and str
33、ucture Kmarts business problem,Situation Kmart and Wal*Mart operate similar chains of Full line Discount stores Different pricing strategies: Kmart follows a promotional pricing strategy of weekly sales, offering discounts on selected items, Wal*Mart follows an EDLP strategy (EDLP = Every Day Low Pr
34、ices); Kmarts regular prices are higher than Wal*Marts, its sales prices are lower Wal*Mart has a better price perception than Kmart Kmart has a higher GM than Wal*Mart (23% vs. 21%) Kmart has significantly higher SG&A as percent of sales, which eliminate Kmarts Gross Margin advantage over Wal*Mart
35、Wal*Marts scale advantage is not driven by the number of stores, but by its sales per store (better sales per square foot) Kmart has significantly lower sales per square foot sales than Wal*Mart ($170 vs $250). With Wal*Marts sales productivity, Kmart would be about as profitable as Wal*Mart Complic
36、ation Kmart is operating at break-even, and Wal*Marts aggressive expansion puts more and more of Kmarts stores into direct competition with Wal*Mart, decreasing their store contribution and Kmarts overall profitability Question ,Structure Kmarts problem to help its management devise a solution, incl
37、uding identifying the key question that our study must answer,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 24,Exercise 1 define and structure Kmarts problem: first step is to logically organize the facts,Company,Competitor,Customer,
38、Higher GM than WalMart (,Higher SG&A expenses than WalMart (,Aging stores,Hi / Lo pricing strategy,Lower net income than WalMart,Eroding same-store sales vs. WalMart,Sales / sq. ft. higher than Kmart,Aggressive expansion into Kmart territories,EDLP pricing strategy,Customers perceive WalMart prices
39、better than Kmart,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 25,Exercise 1 define and structure Kmarts problem: second step is to iterate to drive insight creation,Although Kmarts Hi/Lo pricing strategy leads to high GM, high SG&A
40、 has led to eroding sales productivity,Higher GM than WalMart (,Higher SG&A expenses than WalMart (,Aging stores,Hi / Lo pricing strategy,Lower net income than WalMart,Eroding same-store sales vs. WalMart,Sales / sq. ft. higher than Kmart,Aggressive expansion into Kmart territories,EDLP pricing stra
41、tegy,Customers perceive WalMart prices better than Kmart,WalMart is aggressively expanding, with highly productive stores and a different pricing strategy than KMart,Customers perceive WalMart delivers higher value in some areas,How can Kmart improve its sales productivity (sales / sq. ft.),2004 Cap
42、gemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 26,Exercise 4 summary performance data for a credit card issuer whats the problem,Note: All figures in 1000s. Assume no price inflation and that interest rates have remained constant,The 80/20 Ru
43、le 80% of the answer is in 20% of the data Often we miss the goldmine because we are busy trying to value the shack built on top of it This data, taken from a real client (but rebased,) tells the whole sorry story of their strategic problem in one picture,2004 Capgemini - All rights reserved Xxx/yym
44、mdd - Structured Problem Solving and Hypothesis Generation, Author / 27,Exercise 5 using a “quick and dirty” approach can produce surprisingly accurate results,30 million? 300 million? 3 billion? 30 billion? 300 billion,How Many (Retail) Litres of Petrol Are Sold in France Per Year,Data: French Popu
45、lation 60 million. 1 Gallon = 3.8 Litres,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 28,Develop a Hypothesis,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 29,Explic
46、itly ties your analysis to your problem definition,Why hypotheses matter,They keep your effort,Helps define the level of accuracy that matters,Ensures you analyze no more than is needed to disprove hypotheses within a reasonable doubt,Allows quick check before massive data collection and crunching:
47、“If we confirm our belief in the hypothesis, will we be able to act on it,Keeps you efficient,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 30,Source: Barbara Minto, “The Pyramid Principle,Rule Case Result,If we put the price too hig
48、h, sales will go down We have put prices too high Therefore, sales will go down,Case Result Rule,We have put prices up Sales have gone down Sales have gone down because the price is too high,Sales have gone down Sales go down when prices are too high Probably we have put prices too high,Hypothesis,R
49、esult Rule Case,Abduction is a variation on deductive and inductive reasoning and a powerful tool to develop hypotheses,2004 Capgemini - All rights reserved Xxx/yymmdd - Structured Problem Solving and Hypothesis Generation, Author / 31,DEVELOP A HYPOTHESIS,What differentiates a good hypothesis from a bad one,On target: Answers the core question on the clients mind Accurate: Embraces the entire range of competitive or profit drivers Minimal: “Occams razor” Actionable: Can be quantified and tested On time,
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