Competing on Analytics

Competing on Analytics

Foundation for Business Intelligence

Name: Prachi Kulkarni

                                                                                                                             Student Id: 10666643

         Date: 09/14/2016

Introduction

        Organizations today face a lot of competition in the market and they try every day to find new ways to stay ahead in the race. To achieve what these organizations desire, they require data and some efficient analytical applications to analyse this data. Analysing the data and making certain decisions towards the growth of the organization, to remain ahead of the growing competition, forms the crux of competing on analytics.

Most companies today make use of such analytical applications to make decisions that are best suited for them. Flipkart is one such company. Flipkart an e-commerce website was founded in 2007 by Sachin Bansal (Chairman) and Binny Bansal (CEO) – both graduates from Indian Institute of Technology, Delhi. They previously worked for Amazon.com, and left to launch their own e-commerce company named Flipkart Online Services Pvt. Ltd. in October 2007. Flipkart uses E-kart and PayZippy, its own logistics arm and payment gateway respectively. In 2012 Flipkart launched its own brand called ‘DigiFlip’ which include products like tablets, laptop bags, USBs, etc.

Ability to Compete on Analytics

An e-commerce company such as Flipkart requires a lot of tools for analytics especially when it has to compete with companies like Amazon, EBay, Snapdeal, etc. Flipkart runs on the principle “Whichever tool solves our problem best” to select right tool for its operations. It makes use of a wide range of tools to perform analytics like Adobe analytics, Apache Hadoop, Apache Hive, Adobe Marketing Cloud, HP Vertica, etc. Flipkart strength lies with its large customer base, talent, brand recall and a strong balance sheet and supply chain. It has successfully managed to narrow the gap between Amazon and itself over the past few years, which hints at its effective analytical capabilities.

Pillars of Analytical Competition

There are four pillar of analytical competition – Distinctive capability, Enterprise-wide analytics, senior management commitment and large scale ambition. Of all these, senior management commitment is probably the most important pillar because it form the base for all the others to stand on. Flipkart does have a distinctive capability to compete on analytics. It has made tie-ups with small and medium enterprises (SMEs) promotion bodies to escalate entrepreneurship in the country. With the help of data analytics it helped boost these businesses. This decision by Flipkart has not only helped build these small businesses but also helped Flipkart expand its own brand vale and customer base.        This move by Flipkart also hints at its enterprise-wide analytical approach. Flipkart recently saw a change in its management with the goal to make it more profitable. This decision by has created a positive impact in the e-commerce business for Flipkart. After a certain stagnancy in the business Flipkart is again back in the game with new ideas and innovations to implement. Flipkart aim is to provide world class performance, customer satisfaction and to launch new and innovative technologies.

Stages of Analytical Competition

Five stages of analytical competition exists, from stage 1 through stage 5, where stage 5 deals with those who have full mastery over analytics. The organization that reach stage 5 are high-end competitors, who know exactly what, when, where and why some things will work for their organization and how they should go on about implementing their strategies. With its analytical capabilities, Flipkart fall into this category along with many other big sharks like Yahoo, Walmart, Amazon.com, etc.

Stage 4 includes analytical companies. These are those companies or organizations that know how to use analysis to get to the next level but are not sure about certain things which lead to problems in their progress. For example, an organization may have the ability and resources as well to get ahead in the game but they might lack confidence. With a little push these organizations may achieve great success and could become analytical competitors. Flipkart once was in this stage of analytical competition, where it had to find its way to the top of the pyramid and get rid of all its shortcomings.

The next is the stage 3 type of organizations, which includes those who know and understand the value of analytical competition but are lagging behind far too much to overcome their short comings in a short time frame. Initially when a company launches itself into a business it doesn’t become a top player in that business overnight. It has to build its name from the scratch and move up in the hierarchy to achieve the kind of success it envisioned. The same was with Flipkart, it slowly and gradually made its way up in the business world. Flipkart started using analytics as a way to build its brand and get ahead in the race and eventually it did.

Stage 2 organizations are the once which use analysis but not to that extent so as to compete with others. Their analysis is limited to reporting and getting data about their own firm and taking decisions to solve problems within, rather than thinking of the competition that exists out there. These companies lack the ability to think what more they can do with the kind of analysis they perform.

Stage 1 organizations are the ones who are analytically impaired, meaning these organizations lack the knowledge, skill as well as the confidence to become analytical competitors even when they want to. They face a lot of problems and difficulties to become analytical competitors. These difficulties might be technical or non-technical. It might be the case that these organizations lack the required resources and experience too. These organizations are not yet on their way to become analytical competitors.  

Competitive Advantage with Analytics

Analytics today forms the underlining characteristic on which any organization relies on for its smooth working and to compete with other organizations. The goal is to gain an edge over other companies and prove to be more efficient and reliable. To achieve this goal Flipkart uses many techniques in terms of analytics. For example in 2012, Flipkart implemented a framework in its system, which does two things: (a) It measures the performance of the website using some metrics and (b) It uses a framework called A/B framework which is used to test the web marketing campaigns of Flipkart and also it allows Flipkart to launch multiple versions of the site to be up and running at the same time. This framework also helps boost the time frame which is required to implement new ideas while not compromising the load on the servers of Flipkart. For example, if Flipkart wants to make some changes in its website, the A/B framework simply transfers some of its traffic to the newly designed webpage so that the team can analyse the new design for the impact it may create on various aspects of sales and make changes if needed. Analysis became easy after implementation of this framework since now Flipkart could review its performance in real time and could immediately implement corrective measures if certain issues arise. Thus Flipkart successfully incorporates analytical capabilities that are not easily duplicated, unique, can adapt to any environment or changes, are in many ways better than its competition and are renewable.