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Operations Management: Time Series & Org. Strategy

The document provides information on time series components and an operational strategy for a soap manufacturing company. It discusses the key components of a time series: trend, cyclic, seasonal, and irregular patterns. It then outlines an operational strategy for a soap company, including a customer focus on unique products, targeting domestic and commercial customers, competitive pricing, advertising and sales strategies, personnel hiring, and securing financing. The strategy aims to establish the soap as the standard for hand washing and expand into new regional and national markets.

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Arun Acharya
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29 views5 pages

Operations Management: Time Series & Org. Strategy

The document provides information on time series components and an operational strategy for a soap manufacturing company. It discusses the key components of a time series: trend, cyclic, seasonal, and irregular patterns. It then outlines an operational strategy for a soap company, including a customer focus on unique products, targeting domestic and commercial customers, competitive pricing, advertising and sales strategies, personnel hiring, and securing financing. The strategy aims to establish the soap as the standard for hand washing and expand into new regional and national markets.

Uploaded by

Arun Acharya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Batch 2018-20 Semester III

Core Marketing (CM1)

OPERATIONS
MANAGEMENT

Assignment No. 1

TIME SERIES & ORG. STRATEGY

Submitted By,
Arun A
18MBAR0337
 ORGANIZATION CHART FOR PHARMACEUTICAL INDUSTRY

Sales
Department

 TIME SERIES COMPONENTS


A time series is a collection of observations of well-defined data items obtained through repeated
measurements over time. For example, measuring the value of retail sales each month of the year would
comprise a time series. This is because sales revenue is well defined, and consistently measured at equally
spaced intervals. Data collected irregularly or only once are not time series.

The Components of time series data are given below -

 Trend
 Cyclical
 Seasonal
 Irregular

TREND: It is a long pattern present in the time series. It produces irregular effects and can be positive,
negative, linear or nonlinear. It represents the variations of low frequency and the high and medium
frequency of data is filtered out from the time series.

If the time series does not contain any increasing or decreasing pattern, then time series is taken as
stationary in the mean.

There are two types of the trend -


 Deterministic - In this case, the effects of the shocks present in the time series are eliminated
i.e. revert to the trend in long run.
 Stochastic - It is the process in which the effects of shocks are never eliminated as they have
permanently changed the level of the time series.
CYCLIC: The pattern exhibit up and down movements around a specified trend is known as cyclic
pattern. It is a kind of oscillations present in the time series. The duration of cyclic pattern depends
upon the industries and business problems to be analysed. This is because the oscillations are
dependable upon the business cycle.

They are larger variations that are repeated in a systematic way over time. The period of time is not
fixed and usually composed of at least 2 months in duration. The cyclic pattern is represented by a
well-shaped curve and shows contraction and expansion of data.

SEASONAL: It is a pattern that reflects regular fluctuations. These short-term movements occur due to
the seasonal factors and custom factors of people. In this case, the data faces regular and predictable
changes that occurred at regular intervals of calendar. It always consist of fixed and known period.

The main sources of seasonality are given below -


 Climate
 Institutions
 Social habits and practices
 Calendar

How is the seasonal component estimated?


If the deterministic analysis is performed, then the seasonality will remain same for similar
interval of time. Therefore, it can easily be modelled by dummy variables. On the other hand, this
concept is not fulfilled by stochastic analysis. So, dummy variables are not appropriate because the
seasonal component changes throughout the time series.

Different models to create a seasonal component in time series are given below -

 Additive Model - It is the model in which the seasonal component is added with the trend
component.
 Multiplicative Model - In this model seasonal component is multiplied with the intercept if
trend component is not present in the time series. But, if time series have trend component, sum
of intercept and trend is multiplied with the seasonal component.

IRREGULAR: It is an unpredictable component of time series. This component cannot be explained


by any other component of time series because these variational fluctuations are known as random
component. When the trend cycle and seasonal component is removed, it becomes residual time series.
These are short term fluctuations that are not systematic in nature and have unclear patterns.

 OPERATIONAL STRATEGY FOR “SOAP”


Strategy and Implementation Summary
The key element in Soap manufacturing initial strategy is to sell the soap in the targeted market.
The executive team will build loyalty for their products with decision-level managers of the
organizations in the target markets, and create awareness and support of the benefits of the innovative
attributes of the soap.

Strategy Pyramid
The ultimate strategy is to build the products into the standard for home and workplace hand
washing safety and cleanliness, first regionally and eventually nationally. The main intension is to
increase compliance through the use of their product include continual and progressive expansion into
new markets and a strong branding campaign.
Customer Focus
Having an in-depth understanding of customer needs and local soap making trends is the key to
targeting the appropriate customer segment. After examining and identifying local emerging
opportunities, the soap company intends to reach out to customers who’re looking for revolutionary and
unique products.

Business Target
Soap manufacturing company should plan to offer 100% proven, efficient, safe and reliable products to
a wide range of customers. The soap making business intends to target both domestic and commercial
customers to boost its market revenue share.

Market Strategy
There is tremendous potential for a product that provides supervisors and parents with the
control to monitor and encourage hand washing. Considering the large scope of our potential markets,
the business should feel it’s imperative to focus on limited resources on a particular geographic region
where they can establish demand for their product. After successful market penetration, they can begin
implementation into the restaurant and hospital markets.

Competition and Buying Patterns


Commercial customers select soap based on the necessary minimum safety regulations for the
intended user; restaurant and hospital regulations require anti-bacterial/microbial. Customers will
typically select a product based on price, distributor availability, and convenience. Distributors will
deliver a complete order of cleaning and maintenance products to customers. Major competitors sell to
a variety of customers, including distributors like Sysco, who receive generic soap from bulk
producers, then repackage and deliver it along with other products it sells, utilizing the same
distribution systems.

Industry Participants
The soap industry is highly fragmented. There are more than forty different Institutional soap products
that compete in the market.

Product Pricing
In order for a new Soap product to penetrate the market, the business has to carry out a pricing
survey and plan to have competitive product prices based on the market averages. This business plan
soap making outline also recommends offering discounted prices on products especially when the
business has just began operating.

Sales Strategy
For a Soap to effectively advertise its natural soap business idea to the target market, the following
strategies will be used to market the business.
 Management to effectively market products and let the public know about the benefits of using
soap products. This will be achieved by obtaining major corporate endorsements
 Advertise the soap making business using local media channels such as radio, television and
newspapers
 Offer clients free product samples to allow them appreciate the benefits of using the company’s
soap products.
 Direct mailing to households in targeted areas and corporate customers. Pamphlets will be
dispatched to target customer locations.
 Emphasize on staff training to enable staff fully understand the benefits of natural soap products
since they are the first point of contact for the business
 Advertise the business on digital media platforms such Facebook, Twitter and Instagram
Sales Forecast
If the company is able to distribute their product through existing distributors, it will provide
them a significant financial advantage, as well as the ability to meet the quick increase in demand for
their product.

Personnel Plan
While preparations are being made for the business to open its doors to public, the following
staff will be hired in the soap making business.

5 Owner/Manager
4 Plant Manager
3 Soap Making Machine Operators
2 Marketing Associates
2 Distribution Truck Drivers
1 Security Guard

Successful applicants will undergo extensive training in order to know soap making business activities
and how to manage the facility on a day-to-day basis.

Financial Plan
Soap manufacturing company should formulate a comprehensive financial plan that will
determine how the business will run and what shall be invested when starting a soap business. It is
important to clearly define all the financial parameters in order to adequately plan business finances.
How to start your own soap business comes with numerous expenses and therefore, a bank loan will be
secure to finance budget deficiencies.

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