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Using Trend Analysis for Strategic Business Planning: What You Must Know

What is trend analysis?

Trend analysis is the process of comparing business data over a period of time to identify the occurrence of any consistent results or trends. Business strategies can then be developed to respond to these trends in such a manner that they are in line with the company’s business goals. One of the key trend analysis objectives is to look at how a potential driver of change has developed over time and how it will likely develop in the future. Here, due to the creation of a plausible and detailed picture of the future, trend analysis proves to be a powerful tool for strategic planning. Historical data from the company’s database and that of the competitors can be used not only to track the current market trends but also effectively predict future trends.

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In business, trend analysis is typically used in two ways:

Revenue and cost analysis

A company’s income statement can be used to extract revenue and cost information. This data can then be arranged in a trend line for multiple reporting periods which helps examine trends and inconsistencies. Trend analysis methods are highly useful for examining preliminary financial statements for inaccuracies and identify if adjustments should be made before the statements are released for general use.

Investment analysis

An investor can create a trend line of historical share prices and leverage this data to predict future changes in the price of a stock. The trend line can also be associated with other information for which a cause-and-effect relationship may exist. This determines if a causal relationship between variables can be used as a predictor of future stock prices. Trend analysis can also be used for the entire stock market, to detect signs of an impending change from a bull to a bear market, or vice-versa.

Trend analysis importance

Trend analysis plays a vital role in improving business by:

  • Identifying areas where the business’s performance exceeds expectations so that success can be duplicated.
  • Identify and analyze areas where the business is underperforming so that necessary and timely action can be undertaken to bring the performance on track.
  • Acting as evidence for informed decision making.

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Can trend analysis improve customer satisfaction?

Apart from revealing the market trends affecting the business, experts at Infiniti research conduct trend analysis to determine the spike or decline in the satisfaction levels of customers and sub-groups with the company’s customer base. Furthermore, strategic research methods and focus groups or representative samples are examined to analyze and understand the potential increase/decrease in customer satisfaction levels that would result from specific actions including upgrading the customer service or changing distribution methods.

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The Perks of Having a Good Trend Analysis in Place

What is trend analysis?

Trend Analysis is a technique used to project the current and future movement of events through by using a time series data analysis. It involves the comparison of data over a specific period of time to spot a pattern or trend. Trend analysis methods can be used to forecast how the business will perform, however, it is also important to be aware of the method’s limitations. When business variables including sales, revenue or customer compContact USlaints change over time, the patterns that make up the trends can be observed. This allows businesses to project historical data to obtain future values.

Benefits of using trend analysis

Facilitates comparison

Using market trend analysis, analysts can make a well-charted out comparison between two or more companies for a given period of time. It also acts a great tool to compare the company’s performance with the industry average. Trend analysis methods make it simpler to ascertain the strengths and weaknesses of a particular firm with respect to other related firms operating in the industry. This can help companies to quickly identify the gaps and implement the necessary changes.Request Proposal

Measuring financial performance

Trend analysis can be used to undertake a comparative study to measure the financial performances of the firm over a period of time. Through this the management to take decisions for the future and alter their processes or actions accordingly. Trend analysis (in terms of percentage) is found to be more effective when compared to the absolutes figures/data, facilitating top management in better decision-making.

Top 3 Trend Analysis Methods to Improve the Health of Your Business

Trend analysis is a statistical process performed to examine hypothesized linear and nonlinear relationships between two quantitative variables. Trend analysis methods can be used to examine and analyze a process, especially non-manufacturing processes like nonconformances, complaints, and deviations to aid in the decisions for corrective and preventive action (CAPA). Trend analysis methods can also help an organization to focus on the company’s limited resources, where they are needed the most. Like traditional control charts that are used for monitoring a manufacturing or production process, trend analysis charts are usually designed Ask An Analyst_IRusing alert limits, threshold limits, or action limits. When any one of these limits exceeds, it triggers an investigation to determine if further actions are required. With the help of experts, we at Infiniti, have come up with following trend analysis methods to help your businesses to grow:

Trend Analysis Methods

Geographic trend analysis

Geographic trend analysis is one of the most reliable and easiest trend analysis methods. This is performed by visiting a country, region, or city to identify the particular trend going on there and try to predict the rate at which it can progress in the future.

Temporal trend analysis

Temporal trend analysis is one of the trend analysis methods that allow analysts to study and model the behavior of a variable in a data set over a period of time. This is one of the trend analysis methods that is considered to be tricky for novices. This method can be a little misleading if it is applied to random activities or if a critical factor isRequest Proposal left out.

Intuitive trend analysis

This is one of the most common trend analysis methods. It relies heavily on the ability of analysts to process and understand all the information about a topic and predict its outcome. These methods are extremely difficult to execute effectively because there are numerous external factors that shape the outcome.

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