Requirements

Requirements

1.    graph the first two elements of the Ansoff Model  – Marketing and Innovation and display the gaps.
2.    Please compute and graph the Amazon.com,inc’s future turbulence. (Marketing turbulence and innovation turbulence), and display the gaps.
3.    Analysis of the company including future turbulence, each aspect of the firm, the gaps, and your personal prediction for the future performance of the firm if the gaps are not corrected.

3.. The example of the graph in the Powder point.
4.  This explains how to compute the future turbulence, and you can also see the textbook in https://books.google.com/books?id=IeYZKZxyxuEC&pg=PA313&lpg=PA313&dq=Thriving+In+E-Chaos+-+Underwood&source=bl&ots=peuEWQ6O1O&sig=2SJc1y5NoGhmAunCJTz48ZxY6HU&hl=zh-CN&sa=X&ei=m29uVZ2wE4W_sAXrzoOwCQ&ved=0CDIQ6AEwAw#v=onepage&q=Thriving%20In%20E-Chaos%20-%20Underwood&f=false
page 32-35.

Notice first that a system for measuring the environment called “environmental turbulence” is developed. The most important thing to remember is that environmental turbulence metaphorically represents the complexity and the rate of change in the environment.
The system uses a scale from 1 through 5 to indicate the level of turbulence.
•    Level 1 represents a slow, simple, almost monopolistic environment with extremely long product life cycles.
•    Level 3 represents an environment that is competitive, changing fairly rapidly, but is still mostly predictable (and thus has only moderate levels of complexity and rates of change); product life cycles are moderate in length.
•    Level 5 represents an environment that is chaotic, highly complex, highly competitive, and product life cycles are extremely short.
Now it gets interesting?
Substantial research has been conducted over the years that links the different aspects of the firm and their “match” with turbulence to the firm’s profitability.
For example, firms in highly turbulent environments that have more empowering leadership are more profitable than firms that have highly controlling managers.
Firms that have adaptive cultures are more profitable than firms that have non-adaptive cultures if the firms are competing in highly turbulent environments.
Firms that use complex planning systems are more profitable than firms that use linear planning systems if the emerging turbulence is high.
These statements are made based on research in over 1,000 studies supervised by Dr. H. Igor Ansoff. Not only did Ansoff base his original work on already existing research in each area, but further, he converted the research to a 1-5 scale and statistically linked it to performance.
Computing Future Turbulence
Understanding the present environment is of little value. In using the model, we normally look 3-5 years ahead. Go to pages 34 and 35 inThriving In E-Chaos and look at the turbulence factors that are measured to compute future turbulence. It is important to remember that the worst sources for predicting future turbulence are the firm’s internal managers. In over 100 studies, internal managers were consistently 1.0 (on the turbulence scale of 1-5) off in their understanding of the future turbulence. With that in mind, in computing future turbulence for your projects, you will use two other sources to get an accurate prediction:
1.    Interview 3 experts in the field (if at all possible).
2.    Review relevant literature in the field.
Now, look at page 35 in the book. In determining future turbulence, you will begin with three different views of each factor related to the future (we still ask internal managers their view, even though it’s usually not accurate). What you as an analyst must do is evaluate all of the views and decide which one is most accurate.
For example, the internal managers may rate “sales aggressiveness” (of all players or competitors) as a 3 (competitive), while your experts conclude it’s a 5 (highly aggressive) and the literature you find indicates it’s a 4 (fairly aggressive). After looking at all the information, you might conclude that the experts were most knowledgeable, so you use the value of 5 for sales aggressiveness. Each value for future marketing turbulence is then averaged to compute “future marketing turbulence.” The same is done for future innovation turbulence. Then, the two are averaged together to compute “future environmental turbulence.”
Example:
If future marketing turbulence is 4.7 and future innovation aggressiveness is 4.3, future environmental turbulence would be 4.5.
Profiling the Company
Notice that it’s also possible to profile the company on a scale of 1-5. In this case, we always develop a profile of the present organization. Look at the simple graphic of Hewlett Packard on page 45. Notice the changes between the company’s profile in 1999 and 2000. The difference between the company profile and the future turbulence is called a “gap.” The gap indicates the level of strategic balance or imbalance of each aspect of the firm. If not corrected, differences or gaps will have the following impact on corporate profit:
Gap of 0.5 or less = No profit impact; that aspect is matched.
Gap of 0.51 to 0.99 = Marginal impact on profit
Gap of 1.0 to 1.49 = Serious profit impact
Gap of 1.50 or more = Critical profit impact

1. graph the first two elements of the Ansoff Model – Marketing and Innovation and display the gaps.
2. Please compute and graph the Amazon.com,inc’s future turbulence. (Marketing turbulence and innovation turbulence), and display the gaps.
3. Analysis of the company including future turbulence, each aspect of the firm, the gaps, and your personal prediction for the future performance of the firm if the gaps are not corrected.

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