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Keith Dunn: Chapter 8.4: Performance Analysis (Continued)
Posted On: 02-06-2009 09:56:12 AM


In this section we will look in a little more detail at some of the things you would look at when you analyse performance and at the conclusions you could make on the basis of what you see, prior to further investigation and if you were approaching this data for the first time.

The check list given below relates to both hierarchy and attribute analysis. Metrics that are merely informative on their own arenít included. This includes straightforward measures such as Sales or Margin variance to plan, for instance, which tells you what your performance is, but not why you achieved it Ė again thatís not analysis, just reporting Ė and you always need to investigate further.

It can be taken, unless otherwise stated, that better performance means higher positive variances to plan or last year and higher absolute numbers. The main exceptions to this are Weeks Cover, Stock Variances and Terminal Stock where lower is, generally, better.
The check list makes the assumption that the plans and forecasts are realistic and that they reflect the potential for the area under the prevalent trading conditions.


There are many factors that will influence overall or specific performance which you will need to consider. In some cases these factors will simply be background and wonít have any significant impact but in others they can cause exceptional results, good or bad. This can sometimes have a knock on effect on future performance which you will need to allow for. Exceptionally high sales in one week can lead to stock shortages, for instance, while exceptionally low sales could lead to overstocks and excessive markdowns. These exceptions also need to be quantified and the base performance for the development of future plans established. Weíll look at how and why we do this in section 8.4.3 below.

In no particular order the factors you should consider include :


Performance is usually poor when weather is bad and vice versa, with different regions being affected differently. Un-seasonal weather can have positive and negative effect. If itís warm in autumn youíll sell less heavy coats and more T-Shirts for example.


Itís possible that a product or category has been launched too early or too late. Too early and the customer may not be ready for the product, too late and the market is already satisfied.


Products which are better perceived for value will sell better if money is tight. Curiously, high value capital purchases often increase if there have been large redundancies in an area as people spend their severance pay.


Are your competitors selling similar products at a better price? Is there internal competition for a particular customer?


What has been the effect of any marketing or promotional activity by yourselves, planned or otherwise, and by your competitors?


The current noise on the streets will affect performance of certain products. Sales of copycat products always increase when a particular celebrity or other has been seen in or with the original.


Are there any general problems with distribution or logistics which could be affecting availability?


Has there been any industrial action which has affected performance? This could include availability problems or action that is directly affecting sales.


Local or national events such as the World Cup, whether they are regular or one-off, can affect performance, and while you might have planned for some of the effects there may be others which were un-expected.


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Keith Dunn: Chapter 8.4.4: Performance Analysis (Continued)
Keith Dunn: Chapter 8.4.2: Performance Analysis (Continued)
Keith Dunn: Chapter 8.3: Performance Analysis (Continued)
Keith Dunn: Chapter 8.2: Performance Analysis (Continued)
Keith Dunn: Chapter 8.1.2: Performance Analysis (Continued)
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