Forecasting for a multi million dollar companyWhat strategy

Forecasting for a multi million dollar company...What strategy would you use and why? What are the strengths of your approach? What immediate things will you need to focus on to actualize this strategy? What will you need to focus on in the longer term?

Solution

Forecasting involves estimation of sales revenue for the company in the near future. Here, the sales revenue depends upon the different factors, such as income of the target audience, education level, family size and other demographic, geographic and psychographic factors. It means that there are different independent variables that can be used to build a forecasting model that can ascertain the sales revenue of the company. In this regard, the multiple regression model, will be used to forecast the sales figures of the company that will also elaborate the important variables making a significant impact upon the sales revenue. This approach will also let the company, know about the concerned areas that require focus.

The strengths of this model are:

1. Consideration of different variables or factors that can affect the sales forecasting or any other forecasting

2. Understanding of the degree of strengths of each factor

3. Model can be used for the forecasting of any year in the future

4. Gives an idea and the area of concern for the company

To actualize this strategy, there is a need to collect the data upon the different factors and variable and build the model along with the data of the sales and or other forecasting objective.

In long run, there is a need to focus upon the trend and its direction. Further, the strategy should be implemented to shift the direction of the trend in favor of the organization while considering the changing business climate, taste and preferences of the consumers and the threats and opportunities reaching out to the company.