# Final Project Milestone Three: Statistical Analysis Report

• Introduction to the Problem

Description of the Scenario. The scenario presents an organization operating in the gift cards industry. The sale of the gift cards to the people is essential to create joy. The delivery of gifts and cards across states in the U.S. is affected by a number of features which determine the number sales and quantity of gifts sold over a certain duration. The gifts covering wedding gifts, appreciation, thanks giving, congratulatory, condolences, among others are a key part of life to comfort and support our loved ones. The organization’s history can be analyzed to include its capacity to sell a specific number of gift cards over a certain period. For example, during Christmas, the sale of gift cards is often high due to the high demand for appreciation and thanks giving. The period over Easter, Valentines Day, Mothers’ Day, Fathers’ Day, among others attracts high number of sales of the gift cards across different varieties. Thus, indicate the high number of factors and seasons prompting high number of sales of the gift cards.

The number of gift cards analyzed in the potentially maximum and minimum amount affect the revenue generation by the company. For the organization to attain the highest revenue possible, the maximum amount of gift cards must be sold. This is critical for the overall operations of the company and sustainability of its business. The capacity to sell the maximum number of gift cards is essential to ascertain that the company generates sufficient cash flow, net profit, and gross product essential for the growth and expansion of the company. Therefore, the statistical analysis report examines different statistical tools and methods critical to solve the problem presented by the gift card shop in making critical decisions that ascertain the company great benefits. Thus, provides data driven decisions that are vital for the functionality, operations, and sustainability of the company in the gift cards industry in the United States.

Consequently, the analysis shows a profound need to maintain a high number of sales to ensure that the organization generates sufficient profits for its sustenance. The competitiveness of the organization is determined by its potential to sell the maximum amount of gift cards possible over a specified duration. This is critical to ascertain profits generations and future continuity of the business enterprise. The analysis plan below evaluates a number of key aspects and statistical analysis that inform decision making. The decision making for the company is based in extensive analysis of data to inform decisions based on factual performance of the company in the industry. Thus, enhance its competitiveness and productivity in the long-term.

• Analysis Plan

Calculation of the Central Tendency of the Dependent Variable. This comprises of the central tendency of the Gift Amount which is the dependent variable. The Quantity of Gift Amount is fundamental for enhanced performance and competitiveness of the organization in the industry. The calculations find the Central Tendency of the Gift Amount to have a Mean of 15.716623, Median of 14, and Mode of 10 as analyzed in Table 1 below.

Table 1: Summary Statistics of the Central Tendency of the Gift Amount.

 Column Mean Median Mode GIFTAMNT 15.716623 14 10

(Source: Author).

Figure 1: Histogram of the Gift Amount.

(Source: Author).

Scatterplots for the Gift Amount for each Independent Variable

Figure 2: Scatter Plot: Age

(Source: Author).

Figure 3: Scatter Plot: Children

(Source: Author).

Figure 4: Scatter Plot: Fed Gov.

(Source: Author).

Figure 5: Scatter Plot: State Gov.

(Source: Author).

Figure 6: Scatter Plot: Local Gov.

(Source: Author).

Figure 7: Scatter Plot: Home Owner

(Source: Author).

• Quantifiable Factors that May Affect Operational Performance

The quantifiable factors that may affect the operational performance of the organization comprises of the independent variables identified above. The independent variables influence the quantity of gift amounts leading to the maximum and minimum results. The data shows that; the favorable conditions of the independent variables enable the organization to make more sales. For instance, from the Scatter Plot Figure 2, ages between 25 – 80 shows a high demand for the gift cards. This results in the increase in the number of gift amounts generated over the period. The young children at “0” are more prevalent than the rest affecting the number of gift amounts sold over the specified duration (Figure 3). Also, the Federal (Figure 4), State (Figure 5), and Local Governments (Figure 6) affect the number of the gift amounts to a number of stringent measures introduced by the respective governments affecting the business environment. The home ownership determines the need to purchase of not to purchase the gift cards (Figure 7).

• Problem Statement

The problem statement identifies the independent variables as critical factors that influence the demand of gift cards in areas of operations by the organization. The capacity to maintain the maximum number of the gift amounts is affected by the respective entity through its various measures they install. The demand among children and different ages influence the number of gift amounts that the organization can potentially sell over a certain period. Thus, for the organization to attain high performance – the factors must be adequately addressed.

• Strategy for Resolving the Company’s Problem

The capacity to increase productivity and performance of the organization in attaining the set objectives can be attained through proper mitigation measures on the independent variables. That is, among the children, the solution to resolving the problem lies on creating gift cards that entice them and impact on demand increase. On dealing with the age factor – the development of the gift cards should be maintained across the age brackets of the target market. For example, gift cards that target primarily ages 0 – 3, ages 4 – 15, ages 16 – 30, 31 – 59, and 60 – 80. This is bound to increase the number of sales across different categories of the gift cards demands. Finally, the compliance with the Federal, State, and Local governments regulations is crucial to ensure that the legal and political landscape does not affect the operations of the organization adversely. Thus, to ascertain competitiveness and high performance – the governments should work cooperatively to provide a conducive environment for the business operations.

• Statistical Methods
• Appropriate Statistical Methods Used to Perform the Analysis.

The appropriate statistical method used in the analysis of the gift cards sales in the case entails the utilization of regression analysis. The regression analysis is used to mathematically sort out the variables that influence the others. That is, the evaluation of the factors that induce the influence of one or more independent variables on a dependent variable (Eratti & Sahin, 2020). In this case, the dependent variable comprises of the gift amount that relies on seven core independent variables that influence the number and quantity of sales by the gift cards shop. The independent variables that profoundly influence the performance of the dependent variable (gift amount) include the age distribution determining the number of sales made across different age groups.

Second, children as they love gifts and different gift cards. A show of appreciation and value for their various achievements at the early age. Third, the Federal government that determines the laws and regulations of business operations across the country. The Federal government is integral to determine interstate operations of the gift cards. This is fundamental to protect the operations and activities of the gift cards across the nation (Kumari & Yadav, 2018). Fourth, the State government responsible for intra-state operations and functionalities. The State government plays a critical role in determining the laws and regulations within the state. Fifth, the Local government that intensifies operations at the local level. The local government is responsible for making the gift cards shop operations more efficient and make the business environment at the grassroots more favorable. For example, in the cities, the municipal government partnership with the gift cards shop can increase the number of sales as they partner to create more awareness on different subjects. Thus, make sales more frequent and enhance the popularity of the gift cards as a culture among the residents.

Sixth, the homeowners are a key variable critical to influence the gift amount variable. Despite being used as a dummy variable, the home owners impact the increase of the gift amount through demand of decorations and the sales of houses. This is essential to impact the gift amount positively. Finally, the veterans (vets) including male, Vietnam and World War II (WWII) vets profoundly influence the gift amount variable. The increase in appreciation and celebration of life well lived by the vets of different categories increases the demand of gift cards. Hence, lead to increase the number of gift cards sales in the United States.

• Justification of the Methods Selected.

Figure 8 below shows a regression analysis of the influencing variables that affect the overall performance of the gift cards shop. The figure shows a regression analysis of randomly selected variables that illustrate the performance of the company (Huang et al., 2017). The regression analysis illustrates a determination of the performance of the gift card shop. An increase in demand across different categories of independent variables leads to increase the number of sales of gift cards. Therefore, the approach is justifiable to illustrate the impacts of different independent variables requires an increase in demand of all other variables.

Figure 8: Regression Analysis – Influence Regression.

(Source: Author).

Figure 9 shows the regression analysis of the age variable which comprises of 3,648 samples. The age factor shows high prevalence and desire for the gift amount up to 50. The influence of the age variable on the gift amount is high between ages 20-65. This comprises of the young people (Generation X), Baby Boomers, and the Older people in the sixties. At this point, the need for life appreciation is profound and integral to the sales of the gift cards shop. Thus, the age factor should be address based on the age groups as the target segmentation analyzed earlier in the paper.

Figure 9: Influence in Regression Analysis – Age Variable.

(Source: Author).

Figure 10: Influence in Regression Analysis – Children Variable.

(Source: Author).

Figure 11: Influence in Regression Analysis – FEDGOV Variable.

(Source: Author).

Figure 12: Influence in Regression Analysis – STATEGOV Variable.

(Source: Author).

Figure 13: Influence in Regression Analysis – LOCALGOV Variable.

(Source: Author).

Figure 14: Influence in Regression Analysis – VIETVETS Variable.

(Source: Author).

Figures 10, 11, 12, 13, and 14 shows the regression analysis of children, Federal, State, and Local governments, as well as, Vietvets indicates high demand of gift cards. The capacity to maintain high performance and competitiveness of the gift cards shop – the consideration of the variables outlined in the regression analysis is critical for high performance (Arayesh, 2015). Thus, each variable (independent) must be sufficiently address to induce competitive performance of the gift cards shop sales.

• Data-Driven Decisions
• Process Needed to Utilize Statistical Analysis Used to Reach a Decisions Regarding the Given Problem.

The statistical analysis tools employed in finding effective solution to the gift cards shop problem comprises the use of regression analysis – influence feature, histogram, and scatterplots. The regression analysis indicates the prevalence of demand of the gift cards on the specific variable in which to pay extensive focus on to increase the number of sales (Huang, Wismeijer, Shao & Wu, 2016). The histogram shows the prevalence in demand of the gift cards leading to increased gift amount sales. The scatterplots show the high demand in the target segmentation. Thus, the use of different tools has been employed to analyze the data critical for decision making.

• How Data Mining is Used to Develop a Solution to the Case.

Data mining was executed using StatCrunch software to manipulate the raw data from 26 variables and identify seven core variables that are critical in the performance of the gift cards shop. The StatCrunch data mining provides different tools that are fundamental to understand the impact of different variables on the performance of the dependent variable. Thus, lead to competitiveness of the gift cards shop.

• Structured or Unstructured Problem.

The case problem presented in the scenario comprises of a structured problem that allows the owner to step back, evaluate and analyze the problems affecting the business performance (Kim, Choi, Sung & Park, 2018). As structured problem, the use of statistical analysis tools has been utilized to provide different solutions that can be effective in enhancing the performance of the company (Pee, 2019). In turn, impact on building competitiveness and performance of the gift cards shop in the United States. Thus, the structured problem is addressed through providing viable solutions that can apply to different contexts.

• Assessment of How the Variables Have Potential for Answering the Problem.

The consideration of each variable critically leads to improved performance and competitiveness of the gift cards shop in the market. For example, the analysis of the age variables presents different sub-groups of the age sets that create the target segmentation of the target audience. The target segmentation enables the creation of the perfect products that precisely fit the target group leading to increased sales. This has a high potential of offering viable solutions to the low sales of the gift card sales. Thus, increase in the gift amount can be enhanced by extensively analyzing the target segments within a particular variable.

• Recommended Operational Improvement to Stakeholders
• Data-Driven Calculations that Addresses the Problem Statement.

The data driven calculations show high emphasis should be focused on the following key variables inclusion age, children, federal government, state government, local government, home owners, and the veterans. Data from each variable shows a high need of addressing the demand aspect and the relationship between the company and the consumers. Thus, customer satisfaction and compliance with government regulations and standards of customer experience. Thus, impact in the increase demand of the gift cards.

• Summary of the Results of the Analysis Plan.

The summary shows that it is fundamental to focus on key variables that profoundly impact on the performance of the gift cards shops. The children and ages between 25-80 showing high demand for the gift cards. In turn, the increase of the gift amount is affected by the high demand influenced by the target audience and the conduciveness of the business environment. The business environment is regulated by the Federal, State, and Local governments impacting on the operations, competitiveness, and performance of the gift cards shop. Thus, high productivity and competitiveness is sustained with the jurisdiction of the United States and respective states have a mandate to play to increase the performance of the gift cards shop.

• Explanation of How the Model Addresses the Problem Statement.

The model is designed in a way that; the data manipulation is done to identify the variables with the most effect. This is crucial to finding a solution for the operations and functionality of the gift cards shop. The use of continuous marketing strategies on the respective factor. Thus, cumulatively impact on increased performance and competitiveness of the gift cards.

• Risk and Financial Impact
• Potential Risks

The potential risks posed to the introduction of gift cards as a new product can be analyzed using Michael Porter’s Five Forces Model. The threat of new entrants in the gift cards market is extremely high undermining the potential of the company to generate more financial resources (Omsa, Abdullah & Jamali, 2017). The digital gift cards make new entrants more complex. Hence, pose a profound threat to selling enough cards for the creation of the intended revenue. The threat of substitutes poses a risk of accessibility of the same product from hundreds of other retail shops. This threatens the financial potential of the gift cards as a new product. The company’s competitive rivals comprise of numerous well-financially suited to compete effectively in the gift cards industry. This poses a profound risk on potential straining the financial resources as the company tries to keep up with market trends and compete with its rivals. The bargaining power of customers is amplified by the availability of numerous sources of gift cards (Brujil, 2018). Hence, it poses a risk of having to lower the pricing strategy to attract substantial number of buyers on the product. Finally, the bargaining power of suppliers acts in their favor as they have access to other alternative companies to sell the materials essential for the production of gift cards. Thus, it threatens to dwindle the financial capacity of the company.

• Risk Mitigation Plan

The risk mitigation plan follows a comprehensive plan to improve on the sales of gift cards from the company. The higher the number of gift cards sales, the higher the revenue generation. This is crucial to improve the financial potential of the company. The financial risk mitigation plan can be achieved through growing the capacity of the gift card shop by opening both digital and physical retail shops to increase the sales of the gift cards. The capacity to reach as many as possible target markets is critical to expand the sales and revenue potential (Gerard, 2018). Also, expanding to different territories opens new avenues of access in which the customers find the company reliable to meet their expectations. Additionally, the utilization of different pricing strategies is essential to ensure the produced quantities of gift cards are sold out. The pricing strategies are informed by extensive research of the target market segment (Jakes, 2018). Hence, produce gift cards with specifications of target market segmentation desires and expectations. Consequently, create an assurance of making more sales from the gift cards leading to stability in financial capacity of the company.

• Addressing the Previously Identified Risks

The mitigation of the threat of new entrants can be resolved through opening of both physical and digital retail shops in different strategic cities to increase the sale of gift cards. This is essential to increase accessibility and reliability of the company – leading to creation of a positive reputation. Hence, attract more customers – generate more revenue. Dealing with the risk of substitutes – the creation of diverse and products differential on all physical and digital platforms is essential to attract more customers (Omsa et al., 2017). This is based on creating competitive products designed to be better than the competitors. The approach is fundamental to resolve the risk posed by new competitors and rivals in the market. The risk posed by the bargaining power of customers can be resolved through utilization of premium and moderate pricing strategies. This helps produce gift cards specifically for the specific prices and attract customers across the pricing categories. The risk posed by the bargaining power of suppliers can be resolved through the use of diverse sourcing of the materials based on quality standards (Brujil, 2018). This ensures that no one single supply has a higher bargaining power that the company. Consequently, enable the company to generate highest possible financial value from every gift card product.

• Management Strategies
• Key Aspects and Characteristics

The team tasked with the introduction of the gift cards as a new product in the market should be characterized by high level commitment, innovativeness, and resilience. The commitment is vital to ensure they remain focused on making the new product a success despite the potential obstacles they are bound to encounter in the process. The innovativeness is crucial to ensure the team utilizes unique and diverse approaches to introduce the new product to the market. For example, creation of buzz surrounding the new product, high security on the launch of the new product, and promotion strategies. The resilience of the team revolves on their endurance to surpass every obstacle and remain strong amidst the challenges of introducing a new product.

• Stakeholders

The key stakeholders of the cross-functional team bound to play a critical role in the introduction of the new product of gift cards comprise of the project manager, marketing, and financial teams. The project manager is tasked with seeing the new product into fruition through introduction to the market. The project manager has the responsibility of evaluating the entire process of the product development and impacts it creates on the market. The marketing team is responsibility of identifying the target market segment and analyzing its portfolio ensuring the success of the new product. Also, it is responsible for determine the most viable pricing strategies. As well, the team is tasked in running promotion strategies essential to create a positive market reputation and brand identity of the company and the products. The financial team is critical to assess the financial performance of the product. The team plays an integral role is balancing sales (revenue) and expenses to ascertain profits generation.

• Cross-functional

The project manager is skilled in project evaluation and assessment to ascertain its success. As a new product, the project manager has been on top of its development throughout the process to the point of being introduced to the market. Hence, it is critical to complete the entire process. The marketing team is skilled in assessing the market performance, customer behavior and responses, managing the brand, determining pricing strategies, and increasing the new product optimization on the search engines (Elikwu, 2019). The finance team is skilled in assessing the health of the gift card business and the viability of the new product on the market. The financial assessment is critical to enhance the success rate of the new product.

• Strategy Used to Manage Cross-functional Team

The management of cross-functional team revolves on emphasizing on their importance to the success of the introduction of the new product. The management of the cross-functional team is based on building the identity of the team. This helps own and feel as part of the new product. The delegation of roles and creation of autonomy for each department to make key decisions affecting their specific area is crucial to creating positive influence on the new product (Shuffler, Diazgranados, Maynard & Salas, 2018). Teams motivation such as rewards is essential to cultivate competition and innovativeness. Furthermore, building teamwork is critical for cooperation and collaboration in the success of the new product introduction.

• Application of Total Quality Management (TQM) in Managing Product Introduction

The TQM principles are critical in the management of new product introduction. Customer focus informs the target market segmentation. This ascertains high sales potential and benefits for the company. Leadership driven leads to the product being unique and earn market leadership position (Alzoubi, Hayati, Rosliza, Ahmad & Al-Hamdan, 2019). Also, the leadership of new product introduction is unique to precise to meeting customer expectations. The involvement of people entails engaging of the cross-functional team. This ascertains every department is focused on making the new product a success (Othman, Ghani & Choon, 2019). The process approach outlines the pricing strategies, marketing, and customer convincing. System approach to management stipulates the value of motivating the cross-functional team as well, as inducing positivism in the new product. Continual improvement ascertains that the gift cards with regularly be improved to meet the changing market and customer needs (Keinan & Karugu, 2018). The factual approach to decision making entails the use of research to acquire extensive data. This is critical to making informed decisions on the new product.

• Utilization of TQM Approach for Fulfilling Customer Expectations Associated with New Product

The utilization of TQM approach is integral to improving the quality and performance of the new product with a precise focus on exceeding customer expectations (Topalovic, 2015). The TQM approach outlines the value of integrating all quality-related functions such as marketing, brand creation, teamwork, financial operations, transparency, and auditing in the new product management (Jimoh, Oyewobi, Isa & Waziri, 2019). This is critical to ensure the gift cards sales remain competitive and beneficial to the company. Hence, remain competitive and viable product in the market.

• Assessment of Customer Expectations on the Product by Each Department

The marketing team utilizes market penetration success as the measure of meeting customer expectations. This is based on successfully increasing the loyal customer base of the target market segment. The finance department utilizes increase in sales revenue as a measure of customer expectations. The higher the customer expectation, the high the sales volume and revenue. In turn, lead to great financial performance of the new product as a result of customer satisfaction. The project management assessment of customer expectations is based on extensive research on the customer portfolio. Thus, it informs the design and development of the new product to meet or exceed customer needs and expectations.

• References

Alzoubi, M. M., Hayati, K. S., Rosliza, A. M., Ahmad, A. A., & Al-Hamdan, Z. M. (2019). Total quality management in the health-care context: integrating the literature and directing future research. Risk management and healthcare policy12, 167.

Arayesh, M. B. (2015). Regression Analysis of Effective Factors on Increasing Factors on Trainer’s Motivation of the Red Crescent Society (A Case Study, Ilam, Iran). Procedia-Social and Behavioral Sciences205, 536-541.

Bruijl, G. H. T. (2018). The relevance of Porter’s five forces in today’s innovative and changing business environment. Available at SSRN 3192207.

Elikwu, F. (2019). Exploring the Impact of Cross-Functional Collaboration on Organizational Mission Alignment. Available at SSRN 3396876.

Eratlı Şirin, Y., & Şahin, M. (2020). Investigation of Factors Affecting the Achievement of University Students with Logistic Regression Analysis: School of Physical Education and Sport Example. SAGE Open10(1), 2158244020902082.

Gerard, H. T. (2018). The Relevance Of Porter’s Five Forces In Today’s Innovative And Changing Business Environment.

Huang, H., Wismeijer, D., Shao, X., & Wu, G. (2016). Mathematical evaluation of the influence of multiple factors on implant stability quotient values in clinical practice: a retrospective study. Therapeutics and clinical risk management12, 1525.

Huang, H., Xu, Z., Shao, X., Wismeijer, D., Sun, P., Wang, J., & Wu, G. (2017). Multivariate linear regression analysis to identify general factors for quantitative predictions of implant stability quotient values. PloS one12(10).

Jakes, L. (2018). Success Strategies of Small Business Owners.

Jimoh, R., Oyewobi, L., Isa, R., & Waziri, I. (2019). Total quality management practices and organizational performance: the mediating roles of strategies for continuous improvement. International Journal of Construction Management19(2), 162-177.

Keinan, A. S., & Karugu, J. (2018). Total quality management practices and performance of manufacturing firms in Kenya: Case of Bamburi Cement Limited. International Academic Journal of Human Resource and Business Administration3(1), 81-99.

Kim, J. Y., Choi, D. S., Sung, C. S., & Park, J. Y. (2018). The role of problem solving ability on innovative behavior and opportunity recognition in university students. Journal of Open Innovation: Technology, Market, and Complexity4(1), 4.

Kumari, K., & Yadav, S. (2018). Linear regression analysis study. Journal of the Practice of Cardiovascular Sciences4(1), 33.

Omsa, S., Abdullah, I. H., & Jamali, H. (2017). Five competitive forces model and the implementation of Porter’s generic strategies to gain firm performances.

Othman, I., Ghani, S. N. M., & Choon, S. W. (2019). The Total Quality Management (TQM) Journey of Malaysian Building Contractors. Ain Shams Engineering Journal.

Pee, L. G. (2019). Enhancing the learning effectiveness of ill-structured problem solving with online co-creation. Studies in Higher Education, 1-15.

Shuffler, M. L., Diazgranados, D., Maynard, M. T., & Salas, E. (2018). Developing, sustaining, and maximizing team effectiveness: An integrative, dynamic perspective of team development interventions. Academy of Management Annals12(2), 688-724.

Topalović, S. (2015). The implementation of total quality management in order to improve production performance and enhancing the level of customer satisfaction. Procedia Technology19, 1016-1022.

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