The Business Review

Problem Definition, Brainstorming, and Incremental Economic Decision Making Rules: A Case Study

Dr. John E. Knight, Professor, University of Tennessee at Martin, TN

ABSTRACT

Efficiently and effectively solving business problems requires a systematic and rational process that involves defining the problem, numerical analysis of the problem, brainstorming for potential solutions, using appropriate economic decision-making tools, and finally implementing solutions that are most economically rewarding. The final goal of this process is implementation. This paper illustrates the interwoven nature of the process in the context of a statistical case revolving around designing a system to meet a proposed time limit for delivered pizzas. Problem definition and analysis, brainstorming and economic decision making using a statistical case demonstrate how these concepts interact and support one another. Case studies can provide students with real life examples of how robust and interactive business concepts can be applied to solving problems in a rational and systematic manner (Smith, 1987). Some important concepts covered in this case study include a) defining the problem in what, when, where and extent boundaries, b) collection of appropriate statistical data, c) descriptive statistical analysis, d) determining statistical significance through hypothesis testing to confirm repeatability of patterns, e) brainstorming for potential solutions, f) prioritizing brainstorming choices according to economic principles, and g) using data to provide estimates of results of proposed solutions. Rational decision making has been a focus of many business books and articles. Kepner and Tregoe (1997) published a complete book on a rational process as defined by their method. The book focused on the problem definition as the foundation of further analysis. Their method developed a matrix that emphasized the identification of specific boundaries of the problem. The matrix was an intersection of the more specific segments of problem identification (what is the specific problem, where is the problem in the process, when is the problem manifested and to what extent is the problem occurring) crossed referenced with the two categories “Is” and “Is not”. For example, two of the cross categories would be “when is the problem” versus “is” and “is not”. By identifying precisely when the problem occurs and when it does not occur helps focus the problem analyst’s mind on potential sources of the problem specifically tied to the differentiation in time. The other cross tab categories also provide specifications as to the problem definition boundaries. Many other texts and articles populate the literature on further methods to define a problem. The appropriate collection of statistical data can be used to mathematically specify the problem further. Data collection should first focus on planning so that the data specifically relates to the problem identified and in a manner that is as close to being random and representative as possible. In almost all situations, these specific criteria cannot be perfectly met so consideration as to the ramifications needs to be considered. Hahn and Meeker (1991) describe practical methods to attempt to ensure that a selected sample meets the goals of being random and representative as possible in the process of collecting data. Once appropriate data has been collected and the deficiencies in the data considered, standard statistical analysis can then proceed. Many statistical texts are available as well as many different computer programs for the analysis of the data. The computer analysis program used in this paper is Minitab. Since many statistical texts are available, no list of references is given. However, the general statistical procedure utilized in most statistical analyses includes descriptive data analysis to visually detect any major data patterns and then inferential statistical analysis including hypothesis testing of one or more variables at a time to determine the statistical repeatability of patterns in the data.

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Contribution to Thailand’s Tourism Policy: An Empirical Modelling Study

Dr. Tran Van Hoa, Professor, Victoria University, Australia

Dr. Chau (Jo) Vu, Victoria University Business School, Australia

Pham Quang Thao, Vietnam Union of Science and Technology Associations, Vietnam

ABSTRACT

Thailand is the world’s eighth tourism destination with 40m tourists and fourth tourism income earner (USD61m) in 2019, due to its geographical, cultural, historical and climatic attractions. In 2018, tourism income accounted for 7 per cent of its GDP. In spite of these, a rigorous study of its tourism determination and contribution to economic growth has been very limited. The paper is a serious econometric study to investigate the determination of Thailand’s tourism and its contribution to the country during the period 1996-2018 for use in credible data-based tourism policy analysis and development. Significantly, for Thailand an open free-market economy, the study is carried out appropriately from an economic integration (globalisation) growth modelling approach, which is also the expenditure (as opposed to production or income) perspective of the United Nations System of National Accounts 1998/2003. Specifically, a multi-simultaneous equation model of Thailand’s endogenous growth and tourism determination is developed. The model innovatively incorporates gravity theory and classical consumer demand contributors, Ironmonger-Lancaster new commodity attributes and Johansen policy impact add- and sub-factors (i.e., reforms and crises) explicitly in its economic integration structure. The model is then estimated by system methods with official economic and tourism 1996-2018 data from the World Tourism Organisation and international databases. The research will contribute to advances in the literature and the findings provide useful insights and appropriate and much needed evidence-based inputs on the determination and contributors of tourism to Thailand’s growth. Recommendations will be provided to key stake-holders such as tourism policy-makers (e.g., Tourism Authority of Thailand), academic researchers, business analysts and tourism operators for effective national strategic analysis and practical implementation. Thailand is the world’s eighth tourism destination with 40m tourists and fourth tourism income earner (USD61m) in 2019, due to its geographical, cultural, historical and climatic attractions. In 2018, tourism income accounted for 12.1 per cent of its GDP. In spite of these, a rigorous study of Thailand’s tourism determination and contribution to economic growth has been very limited. The paper is a serious econometric study to investigate the causes of Thailand’s tourism and its contribution to the country during the period 2000-2018 for credible data-based policy analysis. Significantly, for Thailand an open free-market economy, the study is carried out appropriately from an economic integration (globalisation) growth modelling approach, which is also the expenditure (as opposed to conventional production or income) perspective of the United Nations System of National Accounts 1998/2003. Specifically, a multi-simultaneous equation model of endogenous globalisation-based growth and Thailand’s tourism determination is developed. The model innovatively incorporates gravity theory and classical consumer demand contributors, Ironmonger-Lancaster new commodity attributes and Johansen policy impact add- and sub-factors (i.e., reforms and crises) explicitly in its economic integration structure. The model is then estimated by system methods with official economic and tourism 2000-2018 data from the World Tourism Organisation and international databases. The research will contribute to advances in the literature and the findings provide useful insights and appropriate and much needed evidence-based inputs on the determination and contributors of tourism to Thailand’s growth. Recommendations will be provided to key stake-holders such as tourism policy-makers such as Tourism Authority of Thailand, academic researchers, business analysts and tourism operators for national strategic policy analysis and practical implementation. Thailand was a major ‘miracle’ high-growth economy in South East Asia in the 1980s and 1990s due to its globalisation policy, reforms and a generation of capable public servants (ADB, 2022). Also, due to its geographical, cultural, historical and climatic attractions, the country has become the world’s eighth largest tourism destination (40m visitors) and fourth largest tourism income earner (USD61m) in 2019 (UNWTO, 2022). In Asia, Thailand is only second to China as the most popular tourism destination and income earner.

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The Necessity of Introducing Public Warehousing in Vietnam

Dr. Laszlo Kozar, Professor, Budapest Business School, Hungary

Dr. Tamas Kozak, Associate Professor, Budapest Business School, Hungary

ABSTRACT

This study is based on seven-year-long history of connection building, lecturing and examinations of Vietnamese and international sources, furthermore, based on primary research in acquiring direct information from several academic and non-academic experts and prestigious market participants on the examined market. Vietnam has one of the strongest agricultural production potentials in several fields of agriculture: in case of coffee and rice production it is one of the leading producers and exporters. The economy of the country is rapidly developing however the commodity financing system and instruments need considerable development and modernization. Based on my ten-year-long primary and secondary research in this field I propose the development of public warehousing and Lombard financing based on agricultural products. The use of the functions of this institution could help grain market participants, such as producers, manufactures, traders, and financiers for convenient business decisions, price, and credit risk management, and able to involve extra financing resources to the Vietnamese agriculture. Beyond market participants advantages, this solution can help to reach market regulation and stockpiling strategy goals for Vietnamese Government. This technique offers a relatively new solutions but could contribute to the further development of this field while this method can eventually be used in other sectors of the Vietnamese economy as well. Vietnam is one of the most prominent countries of the Southeast Asian region, one of the ten members of the Association of Southeast Asian Nations (ASEAN) that seems to be one of the most rapidly growing economic hubs of the world nowadays. In its half-century history of ASEAN, its members have been among the most spectacularly developing countries in the world. The member countries in total represent a population of over 600 million people, which - in case of the continuation of the economic growth and increasing incomes – foresees considerable growth in consumption for the coming decades. According to its population ASEAN is bigger than the European Union or the United States, it is the third largest market in the world, behind only India and China. For more than a decade, authors have been investigating the market opportunities inherent in the Southeast Asian region, publishing results, and based on secondary and primary research, I believe that the introduction and operation of public warehousing in Vietnam can be a viable business solution from which all stakeholders could benefit. Vietnam has a very huge potential for crop production. Annually 30 million tons of rice, 10 million tons of maize and 10 million tons of coffee (and several other crops in huge masses) are harvested. This enabled Vietnam to be among the biggest exporters of the world. However, the procurement system of crops, including an advanced form of pre-financing is missing. Therefore, the producers face difficulties in their financial liquidity as well, and there are huge gaps in the logistic system of the supply chain. In general, it can be underlined that the concept of the electronic agricultural purchasing marketplace may work anywhere that embodies a novel approach to today’s agriculture based on modern technologies offering an opportunity to both agricultural producers and suppliers (Erdeiné Késmárki-Gally, 2018).

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Why are Retailers Building Marketplaces?

Dr. Tamas Kozak, Associate Professor, Budapest Business School, Hungary

Dr. Laszlo Kozar, Professor, Budapest Business School, Hungary

ABSTRACT

In addition to offering a more diverse product range without the need for stock, marketplace technology can be a powerful tool for building brand engagement, enthusiasm, and loyalty, if done right. Especially for smaller brands or those just starting out, it is increasingly difficult to compete with the big guys when it comes to marketing spend. However, a marketplace model as part of a commercial strategy can be used to build community, attract new customers, and keep them coming back again and again, and differentiate your brand from competitors. For brands and retailers, expanding product offerings is an opportunity to increase revenues, but also to show customers that they are being listened to and to build brand loyalty. Offering an expanded, curated product assortment through an owned marketplace, but not an unlimited assortment, is a great way to identify customer needs and gather critical data. When the right range is curated to suit their lifestyle, customers feel that the range has been built with them in mind. Investing in resources that share trusted guidance and advice - in addition to the products in the retailer's category - is a great way to build community, increase brand awareness, and keep shoppers coming back again and again. Blogs, videos, tips, volunteer opportunities and ongoing shopper interactions in general lead to more frequent, "stickier" sales, especially when virtual shelves are stocked with repeat purchase items that regularly make it onto the family shopping list. The research paper explored how retailers and brands have an opportunity to curate enticing product expansion segments without the traditional risk of stock-outs, and how marketplaces can be used to great effect to reach new audiences, build brand enthusiasm, and drive significant revenue. They will analyze how the marketplace model fits with existing business lines, how to integrate the offering into their overall commerce technology stack in collaboration with e-commerce platforms, and what are the key disruptive technology drivers for building new business models. Increasingly, customers are turning to online marketplaces to find what they want to buy, both B2C and B2B. An online marketplace, either as an operator or as a seller in such a marketplace, can increase the customer base and sales. It all depends on getting the retailers' strategy right, it is worth analyzing why online marketplaces are boosting their business and what retailers need to know to create their own successful marketplace. For many retailers, the most common use for launching an online marketplace is to expand their assortment. The most successful marketplace operators are very adept at moving product groups from their own inventory to the marketplace, depending on how well the product group is selling, how margins are developing and what the market trends are. In fact, some retailers use their marketplace as a kind of laboratory, so that as soon as they see a new trend, they can move quickly and without risk. If the product group performs well, they can add that product group to their own inventory. The research focuses on the strategic work that retailers do before launching an online marketplace, thinking about the value they want to offer to their network of sellers and the relationship they want to build with the customers who need a marketplace. Online marketplace operators have been ahead of traditional e-commerce for several years. however, these figures include the big players who have built their own platforms. The threshold for building your own platform is quite high because the investment is huge, and retailers need a very large technical team just to maintain it. But in the last few years, new platform solutions have emerged that allow companies to build their own marketplace at a fraction of the cost.

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