Kailyn Ashley
Olujimi Babatunde
Paulette Baxter
Kristen Young
INSS 640
Assignment 2
ACCESS
Need to show content of each table separately
For sales and product report show overall total also
Sales by city by product report incorrect, need to group by city
Need to discuss relationship (1:1 or 1:m or m:n)
GRADE =-4
Executive summary
Need to provide analysis that uses data and identifies problems and provides recommendations
No additional analysis provided
Grade =-3
Take over by Kung Fu
Grade =-3
GRADE 50/60
Executive Summary:
Mr. Bialski, VP Finance
Office Products Company
Frankfurt, Germany
Dear Mr. Bialski:
Thank you for giving us a chance to assist you with the analysis of the declining profitability and
stock price of OPC. Please view our attached analysis below.
We found several items that need to be addressed immediately:


Most of OPC’s shares are held by institutional investors in Europe, the US and now
China. The Berger brothers (founders) have little control over the company anymore.
With OPC being a publicly traded company and shares are widely available for purchase,
the company faces the risk of a hostile takeover.
Declining stock price


Declining profitability in the western region of the US
Declining sales in Stockton, Modesto, Turlock, Merced and Denair regions
need to identify problems with product mix and with certain cities based on the data provided
We recommend following course of action:




The development of a monitoring system that allows OPC to see the possibility of any
potential takeover. This includes careful watch over how their shares are being bought
and who is buying them to avoid one buyer from obtaining large volumes of stock.
A strategy must be developed in case a hostile takeover does occur. OPC must be
prepared to take appropriate legal action and act quickly.
Implement market basket analysis so information can be obtained and used to gain a
thorough understanding of what customers want.
o This system will allow OPC to know exactly which and how many products are
being purchased and the conjunction they are being bought with each other.
o Understanding their customers’ behavior will allow OPC to understand their
internal strengths and weaknesses as well as their external opportunities and
threats.
o Basket analysis has potential to allow OPC to discover cross-selling opportunities,
optimizing product mix and logistics, managing marketing incentives and
personalizing offers.
o OPC will be able to make more informed decisions about product placement,
pricing, promotion and profitability.
Outsource IT Operations to India
o To increase stock price, revenue, profitability and productivity growth
(efficiency) must improve. The solution is to reduce operating costs and capital
expenditures. One way to do this is through outsourcing highly technically and
expensive activities
As this is the first phase of our analysis. Although there are some large issues threatening the
company, we feel that it is something that can be easily overcame with the proper strategy and
implementation.
If you decide to hire us again, we would be willing to perform further analysis.
Sincerely,
The H Team, Consultants
B. Design & Implementation
 Spreadsheets attached
Snapshot of relationship
Definition of PK and FK
Definition of PK and FK
Defining Relationships:
Three tables were created and named Product Table, City, and Sales Table respectively
The following fields were created under the Products Table
a.
Part Number - Primary Key
b.
Part Description
c.
Unit Cost
d.
Unit Price
In the City Table, the fields created are listed below and primary key indicated as City code
a.
Citycode - Primary Key
b.
Cityname
The third table, SALES Table was created with the following listed fields and primary key
(s)indicated
a. Citycode
- Primary Key (Citycode and Part Number)
b.
Part Number c.
Quantity sold
RELATIONSHIPS BETWEEN THE THREE TABLES
Product Table has Part Number as primary Key, the City Table has City code has primary key,
while Sales table has City code and Part Number as primary key. The City code is the point of
connection and relationship between the City Table and Sales Table (FK) , while the Part
Number is the point of relationship between Product table and Sales Table. In the sales table,
Part Number, City code, are individually foreign keys as seen in the snapshot above.
GOOD!!!
nature of relationship need to be defined (1:1 or 1:m or m:n) ????
C. Hostile Takeover
A hostile takeover occurs when a company attempts to buy out another whether they like it or
not. A hostile takeover can usually occur only through publicly traded shares, as it requires the
acquirer to bypass the board of directors and purchase the shares from other sources. This is
difficult unless the shares of the target company are widely available and easily purchased (i.e.,
they have high liquidity). A hostile takeover may presage a corporate raid.
OPC can** develop a monitoring system that allows them to see a takeover a mile away ????)
and not be blind to impending threats. It is crucial that OPC be on the lookout for any other
businesses that have shown interest in acquiring them, as well as monitoring how their stocks are
being bought up so as to see if there is any one buyer purchasing usually large volumes of their
company shares.
OPC should have** developed in advance a strategy for fending off a hostile takeover. This
strategy should reach to the legal activities, investment banking, PR, investigative activities of
their company. The book states that “Firms that do better than others are said to have a
competitive advantage over others: They either have access to special resources that others do
not, or they are able to use commonly available resources more efficiently usually because of
superior knowledge and information assets. In any event, they do better in terms of revenue
growth, profitability, or productivity growth (efficiency), all of which ultimately in the long run
translate into higher stock market valuations than their competitors.” (pg. 94) As a result of
having higher stock market valuations than their competitors, OPC would not be a candidate for
a hostile takeover.
**These are what they could have done but not what they should do NOW!!!)
OPC could also use Michael Porter’s competitive forces model. “This model provides a general
view of the firm, its competitors, and the firm’s environment. Porter’s five competitive forces
shape the fate of the firm and the strategic positions of the firm and its strategies are determined
by the model forces. Porter’s model consists of:
-Traditional competitors
-New Market Entrants
-Substitute Products and Services
-Customers
-Suppliers” (pg. 94-97)
what does this have to do with take over? Need to find white knight; Talk to shareholders
about not giving their shares to kung Fu; Boost stock price; use poison pill, make it harder
to take over.. (based on price offered etc..)
D. Business Intelligence and Market Basket Analysis
Market basket analysis (MBA) is the process of analyzing transaction-level data to drive
business value. At this level of detail, the information is very useful as it provides the business
users with direct visibility into the market basket of each of the customers who shopped at their
store. The data becomes a window into the events as they happened, understanding not only the
quantity of the items that were purchased in that particular basket, but how these items were
bought in conjunction with each other (GOOD). In turn, this capability enables advanced
analytics such as:
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Item affinity: Defines the likelihood of two (or more) items being purchased together.
Identification of driver items: Enables the identification of the items that drive people
to the store that always need to be in stock.
Trip classification: Analyzes the content of the basket and classifies the shopping trip
into a category: weekly grocery trip, special occasion, etc.
Store-to-store comparison: Understanding the number of baskets allows any metric to
be divided by the total number of baskets, effectively creating a convenient and easy way to
compare stores with different characteristics (units sold per customer, revenue per
transaction, number of items per basket, etc.).
Market basket analysis can be a valuable tool that OPC can use to implement new tactics that are
based on more than a hunch. Knowledge is power. By understanding their customers’ behavior,
OPC can better understand their internal strengths and weaknesses as well as their external
opportunities and threats. OPC main objective should be to identify their strengths and
maximize them, while attempting to minimize weaknesses. Data mining is a tool that can assist
OPC in doing that.
Applying retail market basket analysis techniques to OPC company’s product and service
offerings can prove to be very beneficial. It has the potential of uncovering cross-selling
opportunities, optimizing product mix and logistics, managing marketing incentives, and
personalizing offers.
OPC could use market basket analysis to gain a competitive advantage by investing in customer
data collection to extract important information from their customer database and product
feature. Discover purchasing patterns by extracting association or co-occurrences from
transactional data. OPC has the ability to learn more about their customers’ purchasing behavior.
The organization would also be able to make more informed decisions about product placement,
pricing, promotion and profitability. And identify which products perform similarly to each
other. This will allow OPC to determine which products should be placed near each other and
which products should be cross-sold.
GOOD analysis of MBA
E. Outsourcing
Outsourcing IT operations to India is an opportunity that OPC is highly considering ???). Before
making a decision it would be smart to weigh the pros and cons of outsourcing activities
overseas. The next step would be to evaluate whether this is appropriate for OPC to do with their
IT department.
Outsourcing is something that should be done with your non-core business activities.***
Outsourcing those activities allows a company the ability to focus on the activities that are core
to their line of business. Areas that are selected to outsource to are obviously going to be
selected because of the skill and expertise of workers in that region for the task at hand. This will
allow the tasks that are being outsourced to be done more efficiently and productivity will be
higher. It is easy to see why outsourcing will allow management a greater level of control over
the business. Outsourcing does not just save time and effort but most importantly it reduces
capital expenditures. Labor in developing nations such as India, is exponentially lower.
IT is something that is can be very expensive. Outsourcing this business function would lessen
the business risk associated** with certain operations but it would save the company costs that
are incurred investing in the newest equipment and software. Business risk and investing costs
would be shared with the partner company. Bottom line is that outsourcing various aspects of a
business can really put a company at a competitive advantage. This is extremely important when
your business falls into the category of a “buyers market” and there is severe competition.
OPC falls into this category. They operate in a very competitive market that is dictated by
consumers. Loyalty, quality and low turnover are what OPC relies on. With rising concern over
declining profitability and stock price as well as the loss of a major contract, OPC needs to act
quickly. They need to continue delivering quality products but at lower prices. If they cannot
come down in price, they will lose more business to competitors. Outsourcing is an option that
could help solve this problem.
For basic office supplies, consumers are really not going to care much about quality; they are
going to opt for the lower prices. Quality is essential in higher technology products such as
printers, copiers, PCs, notebooks, GPS and mobile phones. Consumers will pay higher prices for
higher quality products. Outsourcing IT activities to India will allow them to lower operating
costs which they can pass through to consumers in the form of lower prices without sacrificing
quality since the workers in their partnership will be highly skilled and trained for this line of
work.
There are some things to be careful for when outsourcing business activities. It may be difficult
to manage and monitor operations overseas.*** Outsourcing is not by any means risk free. If
something were to the company overseas that you are partnered with, such as bankruptcy, your
company will be forced to pick up their operations or find a new partner. If a core business
activity is outsourced, this could provide a very large problem since this operation is essential to
the business. Very careful research and evaluation must be done on potential partnerships and
any company considering this must be prepared to take the ropes if something was to happen.
Cost savings is obviously a very large reason for outsourcing however one thing to be careful of
is hidden costs. Legal costs can be substantial. Effort and time put into getting all of the
paperwork done may be lengthy. Communication can also be an issue. With language barriers,
misunderstandings are common.
There are many factors that OPC must take into consideration before making a decision like this.
Outsourcing to India seems like a possible solution to their problems. The advantages seem to
outweigh the disadvantages. If it is the path they decide to take for the company’s IT operations,
very careful and thorough analysis will have to be conducted when finding a reliable, appropriate
partnership to avoid or lessen some of the common burdens associated with outsourcing.
Global issues to be considered
Legal issues
Employees morale
Political stability
Infrastructure issues
vendor reliability
References:
http://www.albionresearch.com/data_mining/market_basket.php
http://www.entrepreneur.com/humanresources/hiring/article49616.html
http://financial-dictionary.thefreedictionary.com/Hostile+take+over
http://www.information-management.com/specialreports/20061031/1067598-1.html
http://www.outsource2india.com/why_outsource/articles/advantages-disadvantagesoutsourcing.asp
http://www.slate.com/id/1003983