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Business Tip 1
Dissecting and Enabling Quadrant Analysis
The Basics
A Quadrant Analysis is a simple and visual way to help you plot and analyze information. It's particularly useful to marketers when trying to determine how product categories, segments and individual SKUs are performing.
Quadrant Analyses can be used to plot performance based on a variety of metrics: Sales Performance; Contribution to Margin (CTM); Gross Margin Return on Investment (GMROI); Consumer Behavior and more. Using a cross section of three measures, a Quadrant Analysis can help you quickly identify specific tactics and prioritize activities, transforming dry data into a diagnostic map.
With a tool such as XP3, the creation of a Quadrant Analysis template to identify and improve performance becomes a relatively easy task. XP3 transforms what used to be a time consuming process of manual analysis into an automatic process that maintains connections to sources for data changes and provides results on-the-fly.
In Action
Let's look at how Quadrant Analysis works with a particular set of metrics: a Sales Quadrant (see diagram below). In this example, the Quadrant plots product performance by sales growth and share of sales within a selected market. The plot is divided into four quadrants:
- Winners: High % Share/High % Growth
- Sleepers: High % Share/Low % Growth
- Opportunities: Low % Share/High % Growth
- Questionables: Low % Share/Low % Growth
Having constructed the Sales Quadrant and determined the sales growth and share of sales for each product, you can now begin to better manage product profitability.
Certain tactics/actions are recommended for each Quadrant. Products in Quadrant 1 are "Winners" that generate high growth/high share and are your profit generators. Tactics for these products would include increasing space, improving position and adding new/similar items.
Using the same method, you would analyze products that fall into the "Sleepers", "Opportunities" and "Questionables" quadrants, devising appropriate tactics and actions for each.
The Deliverables
A Quadrant Analysis is an effective method for converting raw data into a visual diagnostic review. By making use of a software solution, such as XP3, you can automate the process of creating and analyzing Quadrant charts based on a host of performance metrics. Additionally, the complex analyses of different markets, time periods and products can occur on-the-fly using simple data queries. Refreshing the display from source data occurs automatically, as does the development of actionable recommendations.
The data, products and accounts depicted in this example are fictitious. Any resemblance to actual data, products or accounts is purely coincidental.
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