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Using graphics to compress analysis

Using graphics to compress analysis. How to use simple graphics. The right chart for quantitative findings How to visualize qualitative data. The right chart form for quantitative findings.

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Using graphics to compress analysis

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  1. Using graphics to compress analysis

  2. How to use simple graphics • The right chart for quantitative findings • How to visualize qualitative data

  3. The right chart form for quantitative findings

  4. Five generic chart forms exist to represent quantitative findings. Each one is linked to a different sort of message Pie chart Bar chart • Componentcomparison • Showing the size of each part as a percentageof the whole • Comparisonof items • Showing how items rank Column chart Line chart • Development • Showing changes over time • Frequency • Showing detailed changes over time Dot chart  • Correlation • Showing whether the relationship between two variables follows an expected pattern                           

  5. A pie chart is typically used to show the split into components of a 100% total Guidelines Germany and France accounted for more than 50% of sales • Arrange from largest to smallest with largest at12 o'clock • Present "other" category as last component regardless of size • For clarity limit to no more than five components – the rest should be "other" Sales by region 1995 Other Germany Rest of EU Italy France 100% = € XXX mil.

  6. The column chart is appropriate for time or component comparison Guidelines Products A and C have taken on increased importance in the sales portfolio • Arrange from largest to smallest with largest component at bottom of chart • Put "Other" category at top of chart, regardless of size • Draw dotted lines between columns to aid in making comparisons. Limit to no more than five components Sales volume breakdown per product 1993-1995 100% = € 500 M 100% = € 564 M 100% = € 580 M 20% 25% 25% Otherproducts 10% Product D 10% 25% 20% 20% Product C 10% 20% 10% Product B 40% 35% 30% Product A 1993 1994 1995

  7. Combining pie and column charts focuses on the breakdown of one component Guidelines German sales figures indicate a strong dominance of product A • Start with pie • Turn shaded portion of pie towards column • Break pie down into column Breakdown of product sales in Germany 1995 100%=Y Unit 20% Other products 10% Product D 20% Product C Other countries 20% 80% 20% Product B 30% Product A

  8. The basic bar chart shows an ordered list of items to be compared Guidelines Competitor 1’s sales clearly outpace those of the rest of the pack • Order to suit your needs: alphabetically, low to high or high to low • Can also use a column chart, although a column chart implies a time sequence • Preferably not more than five single items Top 5 competitors by turnover 1995– $ '000 – Competitor 1 300 Competitor 2 200 Competitor 3 150 Competitor 4 125 Competitor 5 100

  9. Multiple bars compare two lists of items with two or more categories indicated Guidelines D’s ROS exceeded the industry average in 1994, while E’s just met the median; the reverse occurred in 1995 • Use bars instead of columns for easier labelling • Use dashed lines e.g. to show averages Return on sales top 6 competitors (%) 1994 1995 Company A Company B Company C Company D Company E Company F Average x.x% y.y% ROS= Return on Sales

  10. Columns work well for time series with large variabilitybetween years Guidelines After a dip in 1998/99 net income became positive again in 2000 • Use a column chart to emphasize extreme variability or magnitude • Use typically with time series data • Limit to a small number of time periods Net income per year 70 60 50 40 40 20 1998 1999 1993 1994 1995 1996 1997 2000 (15) (20)

  11. A line chart illustrates a trend or compares two or more time series Guidelines C's development has been outstrippingthat of B and A since the mid 90s • Use to emphasize movement or change • Use for a large number of time periods • Limit to three or four lines Long-term sales development US $million CAGR 30% xx C xx xx xx xx xx B xx xx A xx xx 1985 1990 1995 2000 CAGR = Combined Average Growth Rate

  12. Correlation (or no correlation) can be shown using paired opposite bars Guidelines Discount levels, taken alone, appear tohave little bearing on units sold • Rank first set of bars from high to low or low to high • Use with relatively few sets (i.e., < 15) of data to plot Discount (%)in 2001 Unit volume sold ('000)in 2001 4 3 2 1 0 0 10 20 30 40 Company 1 Company 2 Company 3 Company 4 Company 5 Company 6 Company 7 Company 8 Company 9 Company 10 Company 11 Company 12

  13. For more than 15 observations, correlations are usually presented in scattergrams Guidelines Most companies increase their ROS withgrowing export share • Use preferably when you have > 15 sets of data to plot • With < 15 sets of data, use a paired bar chart • If you have > 15 sets of data to plot, use a legend rather than labels • Must explain well to be effective Profitability vs. export share 1993 ROS (%)     B                     A = Company X B = Company Y C = Company Z …        C          A    10 20 30 40 50 60 70 80 90 100 Export share (%) ROS= Return on Sales

  14. A correlation chart may also be used to indicate clusters Guidelines All products show room for improvement • Use for weak correlations to cluster and indicate need for action • Avoid overloading the matrix to keep the message clear Profit per piece vs. volume 1995 Profit per Piece (€) A   Increase volume   High profit    A = Product X B = Product Y …  Increase margin   B          Low profit           Low volume High volume Number of units sold

  15. How to visualize qualitative data

  16. A sequence from left to right is typically used to illustrate flows Guidelines Phase 1 break down into three steps • Use typically to show time stages • Can be subdivided to show sub-stages • Below each stage, characteristic action to be taken or other relevant items should be added (not more than five) Phase 1 Phase 2 Phase 3 Phase 4 Step 1A Step 1B Step 1C • Bullet point 1 • Bullet point 2 • Bullet point 3 • Bullet point 4 • Bullet point 1 • Bullet point 2 • Bullet point 3 • Bullet point 1 • Bullet point 2 • Bullet point 3 • Bullet point 4

  17. Hierarchies are usually represented in an organization chart Guidelines A typical organizational chart • Limit to three or four layers • Use dotted lines to show informal relationships • Break down departments on separate charts Name/Position Name Name/Position Name/Position Name/Position Name/Position Name/Position Name/Position Name/Position Name/Position

  18. Drivers and their consequence are usually linked with an arrow Guidelines Four drivers influence the cost position of XX • Arrow can be horizontal or vertical • Drivers can be put into frames or also into a bullet point format (for horizontal arrows only) • Not more than five drivers • The consequence always set apart in a separate frame Driver 2 Driver 3 Driver 1 Driver 4 Consequence

  19. Scales are an excellent symbol to illustrate trade-offs Guidelines There are obviously more argumentin favor of alternative 2 • Use only for clear trade-offs between two distinct alternatives • Have more arguments in favor of your favorite alternative Alter-native 1 • Con argument 1 • Con argument 2 Alter-native 2 • Pro argument 1 • Pro argument 2 • Pro argument 3

  20. Whole concepts and framework/tools are often identified with a unique visual Guidelines • Always apply concept visuals in the correct context • Avoid adding too many details to the visual if not needed, otherwise transfer part of it to next visuals Business System ROCE Tree Skill Analysis ROCE = Return on Capital Employed

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