Pareto Analysis: Technique for classifying problem areas according to degree of importance and focusing on the most important (Stevenson 2018 P. 399).
Summary: Johanna Rivard’s article, The marketing 80/20 rule and how to take of advantage of it, dicusses how to utilize the pareto analysis. He explains that the Pareto Analysis can be used in all aspects of life. For example, the analysis can be used as a guide to create a highly effective business solution to focus on customers. By keeping an eye on customers or contacts that have made recent purchases or are frequent buyers, one is able to identify them as top priority to help find and attract new or different customers. He also explains, that the anlysis will help a company find geographical trends of customers, and identify their shopping behavior.
Discussion: This article explains how Pareto Analysis can benefit a company. Pareto Analysis, named after Viflredo Pareto, explains the 80-to-20 relationship between effects and their causes. Fo example, “applying to the business world, the 80/20 rule suggests that 80 percent of your company sales come fom 20 percent of your customers” (Rivard, 2019). Or perhaps 20 percent of what the company does, represents 80 percent of the company’s activities. The 80/20 rule or the pareto analysis can help shift which or what should be tackled first. It helps prioritize decisions businesses must make. By using the analysis, one is able to categorize and strategize, such as customers, defects and errors, and quality. The article mentions how the pareto analysis can help a business become more efficient. In another article I read, it explains how to create an analysis. One must Identify and list problems. For each problem, identify the central cause. Next is to score the problems listed. For example if the company is trying to boost customer satisfaction, the scoring should focus on the number of complaints that would be eliminated if the problem were solved (Brooks, 2014). Once problems are scored, problems should be grouped with centeral cause and scores added. Those with higher scores should be paid attention to first. I think of a messy desk or room when I think of the pareto analysis. First items are placed into a group to be organized. The biggest pile is focused on until its completed, then the next pile becomes the importance.
Stevenson, W. J. (2018). Operations management (13th ed.). New York, NY: McGraw-Hill Education.
Rivard, J. (2019, September 16). The Marketing 80/20 Rule and How to Take Advantage of it. Retrieved from https://marketinginsidergroup.com/strategy/marketing-80-20-rule-take- advantage/.
Brooks, C. (2014, March 29). What Is a Pareto Analysis? Retrieved from https://www.businessnewsdaily.com/6154-pareto-analysis.html.
Haughley, D. (n.d.). Pareto Analysis Step by Step. Retrieved from https://www.projectsmart.co.uk/pareto-analysis-step-by-step.php.
The exercise of evaluating professional procedures and performance metrics from other corporations then selecting the top methods for business process improvement.
In the article “Benchmarking the benchmarking models”, the writers present there are multiple prototypes of benchmarking to choose from but which is the ideal choice and how can a business determine which fits best? The authors also reveal several areas of importance that assist in separating oneself from the competition. The best representation of benchmarking is one that receives the highest possible results of success for any one corporation through measurement, comparison, best practices, and improvement (Anand, Kodali).
To remain competitive in any industry, every business organization should support a continuous improvement program that allows ideas and concepts to become possibilities. Innovation, especially with today’s technology, makes it even easier to research the business practices of one’s peers. Something as simple as a Google search can reveal the basic concepts and procedures companies use to maximize profit. Another method would be to take the product or service and dissect it to its simplest form to match its features such as a smartphone. However, this type of benchmarking must be carefully monitored to ensure no rules are broken.
The methodology a corporation uses in obtaining information to compete against other businesses must be honorable (Proverbs 14:5). If companies are found copying the same technology as others, they could face costly patent infringement charges. For example, Qualcomm and Apple are two of the largest smartphone-based companies in the world who constantly benchmark each other’s technology. So much so, countless lawsuits have been filed against each other for attempting to steal inventive ideas (Porter). The influence of this world many times greed and fear drive
Anand, G.; Kodali, R. (2008). JF Library: Benchmarking the benchmarking models
Wallman, J.J; Flammia, S. (2014). JF Library: Randomized benchmarking with confidence
Pluta, P.L. (2008). JF Library: Benchmarking https://bi-gale-com.ezproxy.liberty.edu/global/article/GALE%7CA176981581?u=vic_liberty&sid=summon
Porter, J. (2019). The Verge: APPLE WILL TRY TO TEAR APART QUALCOMM’S BIGGEST
BUSINESS IN COURTS THIS WEEK https://www.theverge.com/2019/4/14/18307820/apple-qualcomm-lawsuit-patents-modem-exclusivity-antitrust-monopoly
Bible (2016) – Bible Gateway (NIV) Proverbs 14:5