Description
A high-end market research firm has contacted your boss and is trying to sell some business to your organization. Upper management does not want to appear incompetent, so they have asked you to research and explain three major ways multivariate statistics are used in a business.
Small Group Discussion
Research the library, and provide at least 1 example of how a real company has used each of the following multivariate techniques: factor analysis, multidimensional scaling, and cluster analysis. Companies that provide statistics software Web sites and market research firm Web sites usually include case studies and customer testimonials.
Read the postings of all group members, and decide as a group which technique is preferred by the group and which example best illustrates the use of this technique.
Use the Small-Group Discussion Board for your comments.
Individual Portion
For the individual portion of this project, on your own, write a summary of 1,500–3,000 words explaining to upper management the chosen multivariate technique, how it is different from the other 2 techniques, how at least 1 other real-life company has used this technique to address a business problem, and how that technique might be used at your own organization.
Explanation & Answer
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Running head: UNDERSTANDING BUSINESS DRIVERS
Understanding Business Drivers and Improving Business
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UNDERSTANDING BUSINESS DRIVERS AND IMPROVING BUSINESS
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Introduction
Multivariate statistics is an area of statistics which encompasses observations of many
variables. The main reason for observing the variables is to establish how they are related to
one another. The multiple variables are observed through multivariate analysis techniques
which include factor analysis, multidimensional scaling, and cluster analysis. Multivariate
analysis is key because most business problems tend to be multidimensional because there
are various aspects of customers in terms of demographics and lifestyles. Consumers have
different perceptions, motives and view of business competition. Therefore, these techniques
assist in a simultaneous assessment of sets of important market variables. In market research,
one of the techniques which is preferred by most organisations is cluster analysis.
Chosen multivariate technique-Cluster analysis
Cluster analysis is a multivariate technique in which objects are classified into groups.
Under this technique, an exploration is done to establish whether previous undefined groups
may exist in the data. Objects are sorted into different categories based on their similarities.
In market research using this technique, customers can be classified into groups of: Those
who are likely to be against a certain product, those who are receptive to buying the product
and those who are likely to be open to the product. The approach is mostly applicable in
situations where sample units come from unknown number of distinct sub populations or
population but the exact number of the population cannot be defined (Cornish, 2007).
Under cluster analysis, data is grouped on basis of the characteristics they possess and
factors which make them similar. This approach does not differentiate between dependent
and independent variables. Therefore, the main focus is establishing and addressing
heterogeneity in the data and identifying groups within the data, analyse similar observations
UNDERSTANDING BUSINESS DRI...
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