You should briefly describe an organization with at least two years of historica

Question

You should briefly describe an organization with at least two years of historical data, the type and grain of the available data, the important decisions that your organization makes, and how analyzing the historical data might help this organization to make more informed decisions going forward.   Give at least one example of a decision that your organization needs to make that might be aided by insights from the historical data. What issues might you encounter that would keep the predictions from being 100% accurate? Be as specific as possible.  

For example, suppose you own a flower shop, and you have sales data for the last two years. The grain of this data is daily sales totals by type of arrangement by customer zip code. Other examples of grain might be: by individual customer sales transaction, or monthly sales. How might you use this information to help you make better business decisions over the next 12 months?

Explanation / Answer

Answer :

The organisation that i have chosen is Google.

Google

Google's mission statement is  “To organise the world's information and make it universally accessible and useful.” While it has a wide range of products and services, they're are built around google's biggest core competency, Search. Their business strategy is simply to make people use the internet more, by building products and services that are inclusive in nature.

Two Years of Historical Data

Google's Market Share

This part of the subtext simply outlines Google's marketshare in terms of competitors and industry

Market Share by Competitors

Google 69.89%

Bing 11.94%

Baidu 8.53%

Yahoo 7.78%

Ask 0.25%

AOL 0.14%

Excite 0.01%

Others 0.16%

Market Share by Country

United States 34.4% of visitors

India accounts 10.2%

Japan for 3.5%,

Iran at 3.2%

Russia at 2.6%

Google's key comparable financials vs Industry financial benchmarks

Google current ratio: 4.58, industry current ratio: 2.13; Google quick ratio: 3.41, industry quick ratio: 1.83; Google inventory turnover: 140.43, industry inventory turnover: 32.89; Google net profit margin: 21.60%, industry net profit margin: 18.91%;

Google return on equity (ROE): 14.80%, industry return on equity .ROE): 23.32%; and Google return on assets (ROA): 11.65%, industry return on assets (ROA) equaled 12.53%]

How Analysing Historical Data can Help Google Make Better Decisions

Data on Market Share

This part of the subtext list google's major competitors and their role in shaping the competitive landscape of the tech industry. Google's has both direct as well as indirect competitors. It's direct competitors include Facebook, Apple. Snapchat, Twitter, yahoo, Linkedin, Amazon, Microsoft Bing. While its indirect competitors include CA technologies, Oracle, PTC & Intel. This part of the subtext analyses the risks that google faces as a business. Since its a tech company, google's biggest risk to date is the risk of technological disruption from competitors like apple, facebook and snapchat.The data on Market Share Help's Google paint a picture of its competitive landscape and adjust its strategy accordingly.

Data on Google's Financials vs Industry Financial Benchmarks

As far as financial fundamentals are concerned, google's balance sheets reflected strong liquidity in the search giant's financials. In fact google had the strongest liquidity in the tech industry. Google was however still lagging behind in its average collection period , or accounts receivable, since advertising still drives a majority of its revenue, it had a longer gestation period for monetisation when compared to its peers. Google's return on assets reflects on its inefficient use of assets and allocation of capital. In conclusion google has become more efficient with its use of a capital as reflected in its debt to equity ratio and it's profit margins in 2016 were 21.06% higher than the industry average of 18.91 %.. This data provided google the info that while google does have healthy leverage ratio, it needs to work on lowering its over all operating cost and improve its equity return which hasn't been as attractive as 2014.

Issues that Google might encounter in the accuracy of its forecasts

The Data does not account for other Miscellaneous factors that could effect Google's forecast like

Legal, Compliance , Regulatory and Political Factors that do not have historical data or trends

The other risk is its over dependance on advertising as its primary source of revenue, which means that any fluctuation in the advertising spending trends could adversely effect google's revenue. Google risks a lot of capital in expansion and investment in new projects before stabilising its existing projects. The last but one of the key risks that google faces is regulation and bureaucracy. Google has faced a lot of lawsuits in the European Union and a series of class action law suits. Legal risks backed by risky international operations, place the tech giant in a risky operating environment.

The effect of Business Ethics on Projected Growth

This part of the subtext focuses on the ethics involved in sharing information , wether its the way google curates its search results or optimises its search results or wether it chooses to share, collect and monitor its users data. Ethical curation of content is one that has been bought up time and again , as i mentioned before the European Union had already filed a law suit against google for prioritising search results for its advertisers first. For eg Google Glass faced severe criticism for its facial recognition features which were later discontinued and the project was scrapped altogether. This had a huge impact and the results were a far cry form the forecasts and projections.

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