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Running head: BUSINESS INTELLIGENCE 1

Business Intelligence

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BUSINESS INTELLIGENCE 2

Business Intelligence

Business intelligence is a set of strategies, technologies, information, and technical systems that

are used by a commercial organization to collect, analyze, present and disseminate business

information by the use of historical, current and predictive business operation views(Lim,

Chen& Chen, 2013). Business intelligence technologies help in running businesses through

information mining and analysis, management of business performance and benchmarking with

other firms in predictive analysis of business policies. It is, therefore, a crucial tool that helps in

making operational and strategic business decisions(Lim, Chen& Chen, 2013). Such decisions

range from product pricing, setting priorities, goals, and directions in a business plan. It is

necessary to incorporate business intelligence techniques in business because they combine both

external data from the market within which the firm operates and the internal firm operations

data to produce a complete picture of the business endeavor. It also gives a firm an insight into

new market opportunities and an efficient assessment of the demand and suitability of the

products that the firm deals in. Moreover, business intelligence also helps an organization to

discover and analyze different marketing strategies that can be used in different market segments

to improve the marginal productivity of the business(Lim, Chen& Chen, 2013).

Data analytics are the quantitative and qualitative techniques and processes that are used

to cleanse, transform and model business data so as to extract information (Sharda et al., 2014).

Data analytics help an entrepreneur to extract important information from data, which can be

used to make more informed and wise decisions and conclusions. Data analytics take different

facets and approaches depending on the type of data being analyzed. Data mining is one of the

data analytics technique in which data is modeled to be more predictive than descriptive, thus

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making it possible to suggest strategies and make decisions based on a trend/pattern that has

been identified in the past, from data at hand(Sharda et al., 2014).

Business analytics are skills, technologies and practices used to continuously explore and

investigate past business performance so as to form a base for future business

planning(Laursen&Thorlund, 2016). Business analytics are used by entrepreneurs to gain new

business insights and understand business performance based on past records. Business analytics

use statistical analysis, predictive modeling and fact based administration to arrive at a business

decision(Laursen&Thorlund, 2016).

While business intelligence is interested in a consistent set of metrics exhibited by data,

business analytics rely on statistical methods and data-based business performance information

to make predictive business decisions(Laursen&Thorlund, 2016). Business intelligence,

therefore, answers questions such as what problem, how often, and what actions are needed.

Business analytics, on the other hand, answer questions such as why this is happening, what

happens if the trend continues and what is the optimum that can happen. Business intelligence,

therefore, leads to business decisions based on a combination of both critical data analysis and

business performance systems. Business analysis leads to decisions based on past business

performance statistics while data analytics lead to predictive business decisions based on the past

pattern exhibited by data(Laursen&Thorlund, 2016). While business analytics seek to optimize

what has been observed from the business performance data, data analytic techniques use the

past occurrences to predict the future of a business venture.

Michael Kors

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Michael Kors Holdings Limited is a sportswear fashion designer business company that

is based in New York, America(Halme&Rissanen, 2015). It deals in fashion and outfit such as

clothes, wrist watches, handbags, and shoes. The brand was established in 1981 by Michael

Korsand has grown very fast registering approximately 500 stores and more than 1500 boutiques

in other countries. Despite competition from other brands such as Coach and Kate Spade, it

emerged the most popular brand especially among grown men in the 2015 survey. The company

also registered high income of about six hundred and seventy million dollars and annual revenue

of about 3.2 dollars as at 2014(Halme&Rissanen, 2015).

The success of Michael Kors Company can be attributed to business intelligence

strategies that have been witnessed ever since the company was established. Michael Kors

established his company and based it in a region characterized by people who have money to

spend but are not rich thus making the best brand for them(Halme&Rissanen, 2015). A majority

of people in New York earn between $100000 and $250000, making them have a higher

purchasing power for the high-quality, low-price commodities supplied by the

company(Halme&Rissanen, 2015). The virtue that the company is based in the fastest growing

market segment gives it a strategic advantage over its competitors. For instance, HENRYs (High

Earners Not Yet Rich) households spend about 30 percent of their income on ultra-effluents.

Considering the presence of more than 21 million such households, this segment makes the best

consumer market for luxury fashion products. They can comfortably buy $450 handbags and

$250 wrist watches from Michael Kors’s company without like they are going overboard on their

budget.

The choice of a good audience on which to base the company is among the factors that

give Michael Kors’ company a strategic advantage over its competitors. Through business

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intelligence, Michael was able to extract crucial facts from a wide range of data about the

market, which made him make an informed decision of basing his company in the HENRY

market, which has turned out to be rewarding to his firm(Halme&Rissanen, 2015).

Business intelligence arms business companies such as Michael Kors with resourceful

information that help them in making achievable business goals and achieving them through

comprehensive and informed business decisions(Sharda et al., 2014). Such decisions can hardly

be made if the entrepreneur cannot use business intelligence strategies and techniques. Through

business intelligence, a firm can be able to identify customer preferences, their technical

difficulties, and reactions through interactions with them. This is a crucial business factor,

especially when dealing with fashion and lifestyle goods and products like in the case of Michael

Kors Company.

The employment of business intelligence in a company improves the business

productivity of the company(Lim, Chen& Chen, 2013). The company saves the cost and time

that could be spent in gathering and analyzing business data because the Business Intelligence

Team handles everything. The team provides companies with well-documented and presentable

information that is of great help in making business decisions and managing the businesses. The

information can be accessed easily thus enabling the firms to make quick decisions by making

reference to the information analysis whenever the need arises. Business intelligence techniques

are the major contributors to a good return on investment ROI to commercial organizations such

as Michael Kors’ luxury company(Lim, Chen& Chen, 2013). It leads to improved production

margin avoidance of drive costs, and enhanced costs. Qualitative data analysis by business

intelligence techniques also enables entrepreneurs to make informed strategic decisions which

not only turn out advantageous to the firm but also increase customer satisfaction characteristic

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of successful business organizations. The provision of accurate and timely information enables

companies to measure the efficiency of their business strategies, thus making them make more

informed and strategic decisions based on the past performance, customer expectations, and the

future trends(Sharda et al., 2014). Such factors are paramount in business, especially to a

company that deals in luxury and fashion products such as Michael KorsCompany. Business

intelligence teams provide timely well-analyzed reports which keep the fashion company

updated on the fashion trends in the market.

Business intelligence requires creativity, a quality that has been displayed by Michael

Kors in his company. For instance, he was able to identify a very ample advertising platform

through social media, especially Instagram in 2013. It was a risk which has borne fruits for his

company considering the wide market and high demand for his branded goods in the current

market(Sharda et al., 2014). Also, through business intelligence, Michael was able to identify

opportunities for global expansion due to the lesser presence of his brand in the international

market thus making it necessary to take his company products beyond the borders of the United

States(Halme&Rissanen, 2015). This increased the sales of the company due to expanded market

and a wider exposure of his goods to the market. BI analysis further boosted him with insight

that even if the company dealt in luxury products for men and women, they often had families

who needed to be put into consideration. He eventually introduced children clothing and lifestyle

choices. Through the global expansion of his company, he was able to interact with different

markets with people with different purchasing powers. This led to the introduction of the Mikey

brand which is relatively cheap, to accommodate people with lower budgets(Halme &Rissanen,

2015). Such adjustments have rendered the company the best lifestyle commodities brand of

choice.

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The utilization of online marketing and advertising strategy further increased his

marketing efficiency. The digital media campaign on Twitter and Instagram encouraged the

brand's fans to display the Kors brand item that they have and visit their wardrobe the following

holiday summer season. In the course of displaying their already bought accessories, they would

be advertising the brand and attracting more customers(Laursen&Thorlund, 2016). Those are the

creativity instances that have seen the brand successful than its competitors. The mother’s day

contest in which Michael's marketing team encouraged the audience to buy more last-minute

gifts such as handbags and jewelry for mother's day. The advertisement through Facebook and

the offer of gifts to affluent customers in a period of thirteen days preceding the mothers' day

made the brand get an upsurge of sales translating into enormous profits. Such opportunity

identification skills and efficient marketing strategies is a product of business intelligence(Sharda

et al., 2014). For upcoming business firms, BI would be very helpful in raising great business

minds such as Michael Kors’.

In fashion and lifestyle business, the major influencers are celebs and socialites who have

a large number of followers on social media such as Facebook, Twitter, and Instagram. By

advertising a certain brand, they are likely to influence their followers and therefore increase the

number of customers of the brand under advertisement. The common influencers in the fashion

world include Chiara Ferragni, a lady with about 6.7 million followers on Instagram, Aimee

Song with 3.9 Instagram followers, Kristina Bazan with 2.4 million followers and Danielle

Burnstein with about 1.5 million followers among others. Such people influence their followers

with every outfit that they put on. Popular papers such as Vogue Magazine can also be influential

to many people if a company advertises its products in it. Among the best fashion and lifestyle,

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experts in the world include Calvin Klein, Donatella Versace, Valentino Garavani, Coco Chanel,

Ralph Lauren among others.

In summary, business intelligence enables company officials to make more informed

decisions based on sound information analysis instead of guesswork and gambling that would

place the future of the company at stake. It provides meaningful information that helps a business

firm management to respond appropriately to business related queries. Business intelligence also

helps entrepreneurs to gain valuable insight on the customers' behavior including their

preferences, likes and dislikes, purchasing power, budget line, and disposable income.

Through business intelligence, a firm can identify extra selling and cross-selling opportunities as

well as the goods that are suitable for a particular audience thus promoting relevance in business

ventures. It also enables the firm to find out the real manufacturing costs of the trade commodity

and the chances available to minimize the manufacturing cost through optimization.

Business intelligence improves the efficiency of decision making and strategy making in

business organizations by saving the time and energy that could be used in researching and

digging deep into data to extract meaningful information that would be provided by the BI team

in a systematic, updated and presentable manner. It also helps the organizations to keep a better

inventory and therefore making the right orders for the inventory thus making the right goods

available for the clients at the right time, and in the right quantities. Above all, business

intelligence helps businessmen to understand the general progress of their businesses from the

past through the present to the future, thus enabling them to identify problems associated and

find out how best they can solve them.

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References

Lim, E. P., Chen, H., & Chen, G. (2013). Business intelligence and analytics: Research

directions. ACM Transactions on Management Information Systems (TMIS).

Sharda, R., Delen, D., Turban, E., Aronson, J., & Liang, T. P. (2014). Businesss Intelligence and

Analytics: Systems for Decision Support-(Required). Prentice Hall.

Laursen, G. H., &Thorlund, J. (2016). Business analytics for managers: Taking business

intelligence beyond reporting. John Wiley & Sons.

Halme, M., &Rissanen, A. (2015). The Influence of Finnish Culture on the Success of Luxury

Brands: Case Michael Kors.

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