Web clip 1 – Defining a business problem
Step 1 of research: Define the business problem
1. When does a business problem occur?
When there is a gap between the desired state of the company and the actual state of the
company. Two types of problems:
1. The actual situation is seriously wrong and needs to be solved as soon as possible.
Example: AH boycotts Unilever’s products. So Unilever loses a lot of sales because
AH doesn’t sell her products anymore. Unilever needs to solve this asap.
2. The actual situation is not seriously wrong but can be improved.
Example: Pfizer may increase profits by having its sales reps approach doctors
differently. The actual situation is not seriously wrong, but can be improved.
2. What makes a GOOD business problem?
1. Feasibility: is it doable? (Possible)
Checklist to determine whether a business problem is feasible or not:
- Is the problem demarcated (not too big; ingekaderd)?
- Can the problem be expressed in variables?
- Are you able to gather the required data? (existing or new data)
Examples WRONG business problems:
- ABN AMRO would like to know how it can increase it profitability.
Wrong because:
* way too big (not well demarcated).
* which variables? (examples of variables: new products or environmental
investment).
* the list of variables is endless, so it’s unable to require data.
- Pfizer would like to know whether soft-selling new drugs to doctors works better then
hard-selling.
Wrong because:
* It’s not too big.
* Which variables? (Better in terms of…? -> prescriptions, sales or profits?)
- Philips would like to know whether running price promotions on its products can reduce
the profitability of its competitors’ new products.
Wrong because:
* It’s well demarcated.
* The problem can be expressed in variables -> price promotions on Philips’ products
and profitability of the competitors’ new products.
* You cannot get access to the required data, because profit data is not available for
competitors.
Examples of FEASIBLE business problems:
- Pfizer would like to know whether soft-selling new drugs to doctors leads to more
prescriptions than hard-selling.
- Philips would like to know whether running price promotions on its products can reduce
the sales of its competitors’ new products. OR Philips would like to know whether running
price promotions on its products can increase the profitability of its own products.
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Step 1 of research: Define the business problem
1. When does a business problem occur?
When there is a gap between the desired state of the company and the actual state of the
company. Two types of problems:
1. The actual situation is seriously wrong and needs to be solved as soon as possible.
Example: AH boycotts Unilever’s products. So Unilever loses a lot of sales because
AH doesn’t sell her products anymore. Unilever needs to solve this asap.
2. The actual situation is not seriously wrong but can be improved.
Example: Pfizer may increase profits by having its sales reps approach doctors
differently. The actual situation is not seriously wrong, but can be improved.
2. What makes a GOOD business problem?
1. Feasibility: is it doable? (Possible)
Checklist to determine whether a business problem is feasible or not:
- Is the problem demarcated (not too big; ingekaderd)?
- Can the problem be expressed in variables?
- Are you able to gather the required data? (existing or new data)
Examples WRONG business problems:
- ABN AMRO would like to know how it can increase it profitability.
Wrong because:
* way too big (not well demarcated).
* which variables? (examples of variables: new products or environmental
investment).
* the list of variables is endless, so it’s unable to require data.
- Pfizer would like to know whether soft-selling new drugs to doctors works better then
hard-selling.
Wrong because:
* It’s not too big.
* Which variables? (Better in terms of…? -> prescriptions, sales or profits?)
- Philips would like to know whether running price promotions on its products can reduce
the profitability of its competitors’ new products.
Wrong because:
* It’s well demarcated.
* The problem can be expressed in variables -> price promotions on Philips’ products
and profitability of the competitors’ new products.
* You cannot get access to the required data, because profit data is not available for
competitors.
Examples of FEASIBLE business problems:
- Pfizer would like to know whether soft-selling new drugs to doctors leads to more
prescriptions than hard-selling.
- Philips would like to know whether running price promotions on its products can reduce
the sales of its competitors’ new products. OR Philips would like to know whether running
price promotions on its products can increase the profitability of its own products.
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