The importance of data analysis for strategic planning in Ship agency business

 

        The importance of data analysis for 

                        strategic planning in

                        ship agency business 

Collection of data is playing a vital role for our strategical planning. For to achieve “operational excellence” following need to be covered

1.       Strategy development

2.       Performance management

3.       Process excellence

4.       High performance work teams

Under above segments there are many sectors covered.

In addition to all above its very important very important identify your customer base.

Specially

1.       Top ten customers volume wise

2.       Top ten customers income wise

3.       New customers secured within specific time frame (annually or by annually) 

4.       Lost customers within a specific time frame (annually or by annually) 

5.       If possible, the reason to said customers

6.       The reliability of our business segment within said top ten customers (percentage)

7.       Main competitors

8.       Disruptive competitors

                                    Disruptive innovation with demanding customers

We must be aware of and blind about above areas will drive you through a real uncertainty within the business. 

Mostly department management should be aware about those areas to plan and implement their strategies to maintain department performance. Rest of the staff can support them with their knowledge and intel whatever they have in hand. 

                                        Characteristics of Disruptive & Sustaining innovation

Sometimes certain managerial staffs are not aware about those fundamentals, and they are trying to secure new customers and businesses continuously from the market and not aware as they are losing some of their existing customer base due to lack of attention on them. They can lose their customer base due to some of the following such as 

a.       Noncompetitive pricing structure

b.       Poor customer service

c.       Unethical practices by competitors

d.       Customers went out from that market segment

 

We might lose some customers with a reasonable reason where we are unable to patch that gap within our company policies. E.g., If a competitor is using unethical practices to win their customer base and if any of our customers trapped on to that and shift towards that competitor, we are helpless in that regard. Because we are unable to follow the same path with our company procedures. In that case we must identify them properly with such reasons and should continuously maintain our relationship.

Sometimes we should contemplate such lost positively without demoralizing ourselves. Because occasionally competitors will not be able to extend the service standard where your company have given them in the past. Then the customer will experience difficulties to meet their requirements same as with you’ll. Then they will decide to return back to you’ll with burnt fingers and such customers will not move out easily from you’ll with their bad experience within that market.

But we must maintain our investigation tight about all those lost customers. Need to identify precisely  those who have left us due to service failures and pricing structure. This is very important.

Such areas should identify with immediate effect and bridge those gaps with proper corrective actions to mitigate any further loses.

To carry out all above we should have proper data in hand. Example, annual customer base and product wise. 

Based upon such data we can identify whom we have lost or won within that given period. Then you’ll can commence investigation to find out the reason for that win or lost through our intel.

If it is a win, we can identify what that customer has valued on us to use us for their operations and introduce such similar attractive elements to win many more from the market as well as to concert the existing customer base. 

When we identify the customers went out from our portfolio because of the pricing structure, we should evaluate our pricing structure in detail with the market trend.

We should have a proper quoting procedure based upon our operating cost. That operating cost should be studied as a breakdown of hourly, daily, weekly, and monthly to ease the cost calculation process.

In addition, we should include customer credit period, manhours, direct department other expenses (stationary, Vehicles, communication, etc.) also into consideration.    

Then we should come to a conclusion as what would be our minimum quote. Based upon that figure we should declare a minimum amount to quote to our principals. Otherwise, department and company will bleed without notice.

If we lost any of our customer due to competitors underquote, if so, we must check whether said quote is lower than our set limits, then we can ignore the rectification actions. Because such approach will create a negative impact on our bottom line with time.  In addition, if we try to meet that quote to compete with the competitor, it might affect badly to our existing loyal long-time customer base those who are paying us more than the said amount. Even competitors can use the same to create a conflict among us and our loyal customers. So, better we stand down and maintain our stance. We can do this if we are quoting our customers with a sense without over quoting at any given time.    

But if we lost the customer over and above our minimum quoting structure, that means we have some muscle to adjust ourselves, then we can try to secure them back again with some sensible adjustments. 

So, with all above its obvious market information will play a vital role when we do this type of pricing strategy.

Sametime, sometimes we are much depending upon few of our main customers.  Since the income is steady and fulfilling our budgeting targets, we are happy with our approach. But sometimes management is not aware as our whole income is depending on few main principal hands. If any of those principal goes out from our customer portfolio, whole income, KPI’s, budget, etc. are in jeopardy.

So, we should control this dependence and we should move forward with a clear idea about our customer base. To come out of any such danger we should diversify our customer portfolio from those main principals by reducing the dependability on them.  

To achieve that we should first identify our top customers (volume wise as well as income wise). In addition, we should calculate our dependability percentage with our main top ten customers. Based upon the results we should place our strategies to mitigate the risk. If not, we lose the whole grip of department performance if we lose any of those main customers (top ten) from our portfolio.

 

 

 THANK YOU

01^st August 2021

Prepared by:

Ashan Silva

AFNI(UK), CMILT (UK), ACIM (UK)

Ex. MSc (Strategic Marketing), Ex. MBA, MBA, Reading for DBA