Forecasting for the future is
essential and it is key to innovation.
Forecasting depends on the following;
·
What
we are forecasting
·
How
fast the market is expected to change
·
Availability
and accuracy of the historical data
·
The
team’s end goal
·
The
available resources.
Forecasting
is contingent upon historical data; this is a disadvantage for new products. There is always going to be a tradeoff
between cost and the robustness of forecasting (Tidd & Bessant, 2020). When there is limited data to work with for
new products, a regression analysis can be used to identify which contributing
factors have the greatest impact. This
helps to identify which factors matter most so that you can better forecast for
the future. The underlying drivers are
revealed from the data and this is used to predict future risks or future
demand. Forecasting allows innovators to
improve reliability by identifying future trends from the dataset.
One
infamous prediction that actually came true was a prediction from Jeff Bezos. Jeff Bezos is a pioneer in the industry, and
he predicted that e-commerce and cloud computing would become the new way to sell
products online. His predictions came to
fruition, and cloud computing is now the biggest trend to support
internet-based business. Jeff Bezos
believes that innovation is driven by frugality and that constraints on
resources drive innovation. Jeff Bezos
stated that “One of the only ways to get out of a tight box is to invent your
way out”.
Amazon was founded in 1994 when Jeff Bezos
envisioned the start of an internet-based business, where products would be
sold online. He focused on forecasting
by looking at the information that was stable.
He wanted to focus on what was reliable and what would not change over
time. He implemented a plan that
invested in ensuring that Amazon would provide the things that consumers need
and improve on the delivery of those things.
Based on the data he was able to forecast that consumers would continue
to want low prices and that they would consistently want fast reliable delivery,
and lastly that they want access to a wide variety. He used this to build his business strategy (Haden, 2022).
One
of the forces that impacted the success of Amazon was technological forces. There were technological forces that impacted
Amazon because of the rapid development, which subsequently caused Amazon’s technological
platform to become rapidly obsolete, which in term caused them to constantly
update their technological platform. These
constant updates help them to remain number one and allows them to offer a
wider audience with a plethora of products to offer. In fact, they now sell whole goods and still
deliver their products rapidly.
Another
force that impacted Amazon is the social force because online shopping has
affected the physical health of shoppers.
The thought is that online shopping has made everyone lazy, and everyone
is staying at home while Amazon delivers the goods. This has allowed people to become complacent and
has sparked unhealthy eating habits which have affected the overall health of
American adults and children. Amazon has
been under pressure to provide options for a healthier lifestyle.
The
secret to success is innovation, and innovation starts with forward
thinking. It is essential to plan ahead. Innovators should be predicting the next
trend and sparking change.
References
Tidd, J., & Bessant,
J. R. (2020). Managing Innovation: Integrating Technological, Market and
Organizational Change, Enhanced Edition (7th Edition). Wiley
Global Education US. https://coloradotech.vitalsource.com/books/9781119713197
Haden, J. (2022) 20
Years Ago, Jeff Bezos Said This 1 Thing Separates People Who Achieve
Lasting Success From Those Who Don't. Retrieved on September
7, 2022 from https://www.inc.com/jeff-haden/20-years-ago-jeff-bezos-said-this-1-thing-separates-people-who-achieve-lasting-success-from-those-who-dont.html
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