Analytical Consulting Lab Candidate Projects Winter 2015

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1 Analytical Consulting Lab Candidate Projects Winter 2015 Welcome the Analytical Consulting Lab! In the following pages, you will find candidate projects from sponsoring companies under the Analytical Consulting Lab (DECS 915) for WINTER The projects listed include working with actual company data, developing meaningful analytical models for managerial decision-making, and presenting results and recommendations to company executives. Most projects will require some level of Non-Disclosure Agreement (NDA) with the sponsoring company. More information about the class can be found at its website: Please feel free to contact me at or with any questions and interest Thanks for your interest. Russell Walker, Ph.D. Clinical Associate Professor Kellogg School of Management Northwestern University

2 Press Ganey About Press Ganey Press Ganey is the recognized leader in performance improvement. We partner with health care organizations across the continuum of care to improve the patient experience and create and sustain high performance. We offer solutions that capture the voice of the patient, improve employee and physician engagement and drive targeted improvement through analytics and advisory services. For more information, please visit: Analytical Projects: Analysis of Health Care Clients Project Description Functional Department Client Opportunity Analysis Calculate probable client wallet size by clustering clients, determining the normal distribution of spend by product, and then determining remaining potential dollars by client Sales Experience with Analytical Consulting Lab MBA Candidates As a previous sponsor, I understand how important it will be for you to 1) receive clear instructions on what success looks like and the associated deliverables 2) gain access to ask clarifying questions after project kickoff and 3) enjoy the analytical work you will engage in and be able to gain experience on a real project that will be implemented. The previous ACL team s work was fully implemented and provided great insight and shaped how our organization sold products to our clients.

3 Nuestro Queso Nuestro Queso is an up and coming Chicago company that manufactures and markets an extensive line of high quality Hispanic cheeses, creams, drinkable yogurts, and salsas to the Hispanic market since We have our own manufacturing facility in Kent, IL. The company has distribution in the Midwest, the NY/NJ area and is expanding into the South (Atlanta, the Carolinas). We have significant distribution and shelf space at all Latino independent grocery stores in the Chicago area. In Chicago Nuestro Queso is a top three Hispanic cheese brand and our Queso Fresco is #1 in its category. Our cheeses have won 12 medals at the most prestigious cheese competitions in the industry since 2011 for their freshness, quality and great taste. We have earned our reputation for quality and value by using only traditional recipes and the most pure milk to create the best cheese. Our target consumers are Latina Moms Our priorities for 2015 are elevating the brand image, establishing stronger brand differentiation, connecting emotionally with Latina Moms, earning the loyalty of the local Hispanic community and winning at retail. Social media & content marketing are a big component of our marketing plan and we need your help to understand the best practices and most cost effective ways to build a loyal following in Chicago to help us accomplish our marketing objectives. The outcome of your work will help us define and refine our social media/content marketing plan. This is a unique opportunity to help a company grow in the Hispanic market and to develop expertise in a fascinating and very valuable marketing competency: winning Hispanic social media & content marketing. If this is an opportunity that excites you and aligns with your interests and passion please contact me at: Arturo.nava@nuestroqueso.com, I would love to chat with you. Thanks! Arturo Nava Marketing Director Nuestro Queso

4 Walmart Project Description Walmart Home Services / Kellogg Project Description Walmart Services is the retail services business unit of Walmart U.S. which is the largest operating segment within Walmart Stores, Inc. Located at the Walmart Headquarters in Bentonville, AR, Walmart Services is charged with architecting, delivering, and managing unique service offerings in the Financial, Food, Fuel, Personal Care, Home, and Amusement & Experience service businesses that are offered across Walmart s formats and channels to help customers save money so that they can live better. Walmart Services has been challenged by Executive Leadership to expand its current Home Services category to offer new, unique and disruptive service offerings. Two emerging segments of the population are of increasing interest to Walmart. They are: Millennials As this segment of the population matures and settles in to their professional lives, there is the belief that they will migrate from rental property to home ownership. This generation is not known for their DIY abilities; rather are regarded as the do it for me subset of the population. Baby Boomers As Boomers age and retire, many will downsize their lives. This could be due to a reduction in income, empty nests or perhaps health problems that no longer allow them to take care of their homes as they have in the past. This segment of the population IS known to be DIY savvy, but due to the factors above may become more dependent on third-party services. In each of these cases, we hope to understand the scope of event or need-based services Walmart should provide to assist with these transitions in life? Will these segments of the population want to shop for and source these services? How credible is Walmart in this space? Should Walmart deliver the service alone, or should Walmart partner? What is the size of the prize associated with this opportunity? Walmart would like Kellogg to execute an exercise to analyze/determine both short and longterm returns for our business in this respect.

5 FEW Spirits About FEW Spirits Founded as a dry community, Evanston was home to many influential advocates for Prohibition who effectively kept the city free of alcohol for more than one hundred years. Though the city legalized drinking in the late Nineties, it took the perseverance of our Master Distiller, Paul Hletko, to reverse the antiquated liquor laws. With roots going back to some of Europe's fabled brewing families, Paul and FEW Spirits have marked the end of Evanston's Prohibition and given the city its very own craft distillery. FEW Spirits has won many awards for its novel take on small-batch gin, whiskey, and specialty spirits. The team will work with the partners on the project. Project: Over the past two quarters students have worked to help FEW Spirits build an inventory management model and a costing model. Now, FEW needs help with integrating the two models into a production planning model they already have. The result will be a integrated way of understanding its marketing plans and marketing costing structure. This quarter you will help create an analytical tool to help FEW take its knowledge about its future revenue, cost of production, and current production schedule to model out marketing budgets and timelines.

6 United Airlines Candidate Projects There are multiple candidate projects with United Airlines and the Mileage Plus frequent flyer program. The projects will generally involve a study of customer redemption, reward use, search use and Internet tracking, new revenue creation, and partner involvement. The Mileage Plus program is an internationally recognized rewards program of premier status. Student teams will work on real projects, with real data, and present to senior executives. These projects are sponsored by executives in Mileage Plus, who have overseen previous ACL projects with Kellogg. Students may select from the below. Multiple projects with United are possible. Project 1: FareLock Study Review the financial impact of FareLock. Specifically, we d like for the team to review the revenue associated with FareLock purchases, and the average price/availability on the flights where FareLock was purchased (to the extent we can get the data). Ultimately, we re trying to determine: - The demographics of a FareLock customer (MP status, leisure vs. business traveler, etc.) - Purchase behavior (days from departure, booking class, likelihood of ticketing, etc.) - Likelihood that the seat would have been purchased with/without a FareLock purchase - Ideally, we d like to include inventory spoilage implications, since these customers are holding inventory on flights without having purchased a ticket. Project 2: First Class and Business Class Auctions Situation: United flies 38,000 upper cabin seat segments per day (United Global First, United First, United BusinessFirst or United Business). Customers gain access to these seats in a range of ways: buying the fare, upgrading with miles, purchased upgrades and complimentary upgrades, etc. Some carriers have introduced upgrade auctions (NZ, TP, VS, KL, SN, etc.). Problem: United is interested in evaluating auctions as an additional way to sell upper cabin seats if doing so will generate incremental revenue. Diluting existing revenue streams would be an unacceptable outcome.

7 Analytical Inquiries: Do conditions exist in which upgrade auctions could be expected to outperform offering upgrades for a fixed price? If so, what conditions are ideal and what conditions indicate high risk? Long term, how might upgrade auctions alter current demand and revenue driven by the outright sale of premium fares?

8 Project Description: Chicago Bulls The Chicago Bulls Analytics Department is excited to partner with the Kellogg School of Management on a project for the Analytical Consulting Lab. The Bulls Analytics Department is dedicated to improving revenue streams (e.g. tickets, sponsorship, merchandise), driving enhanced fan engagement and optimizing overall marketing efforts. The specific challenge to be addressed focuses on examining and analyzing in-arena and online merchandise for the Bulls. The project will involve assessing trends in sports retail, analyzing transactional level data to identify insights and make recommendations for how the Bulls can increase this revenue stream. The resulting findings will be used to inform promotions and pricing for the season. This is a unique opportunity to introduce yourself to the Bulls and work with employees across several functions including Analytics and Retail. The Bulls look forward to collaborating with students excited about working in sports. Students will work with Matt Kobe, Director of Analytics for the Bulls, Kellogg MBA grad and ACL alum!

9 Menus of Change Project Descriptions There are 3 projects available with Menus of Change. Each looks at a critical input to the world s food supply. Risks associated with the use, availability, pricing, and environmental impact follow and will drive the risk-decision approach to the use of these food inputs. Project 1: Water and Its Availability and Impact on Food Sourcing Risks Have commodity markets begun to price in climate change (precipitation/drought) at a faster cycle than actual crop growth. This would involve an examination of how frequently futures prices change dramatically based on current weather forecast and future weather forecast, and how correlated, and quickly, changes in soy and corn are mirrored in beef, pork and poultry, dairy if at all. That is to say: are futures now the vehicle for traders to bet on current harvests, not only future harvests and does the market also use proteins for trading purposes, or do they wait to see if the animal feed arrives. And, how has the lag between news, price change, and yield evolved over time. This is essentially a study of how commodity markets are moving away from serving those who want to receive goods and if climate change which is shaping grain markets are also shaping livestock markets, even as the livestock industry avoids changing its actual practices. Project 2: Palm Oil and other Related Products and Ingredients and Health Risks Last year s class found that nutrition science and regulation may have moved the soy market especially as the voluntary elimination of most trans fats by food companies drove down demand for soy oil, and did so ahead of impending regulatory changes. While farm policy and environmental/resource constraints are now moving markets, it would be interesting to see if financial markets also are moved by nutrition science and regulation, looking at a few cases and seeing if impacts on price or planting could be teased out. Palm oil is related because the US food industry is considering replacing soy (trans fats) with palm oil, another cheap solid fat, and doubling the demand for global trade while probably clearing a good chunk of rain forest to do so rather than reformulating recipes or waiting for new soy varieties to be commercialized. Project 3: Genetically Modified Organisms (GMOs): Understanding Risks in GMOs A study of value creation in the GMO segment. A recent study by the USDA Economic Research Service concluded that GMO soy and corn have not increased per acre yields over the past two decade but did increase the use of glycophosphate, a chemical pesticide in Round Up that is now detected in breast milk and tentatively linked to the rise of gluten intolerance (not a major health concern, but noteworthy). The larger issue is that GMOs have created patentable intellectual property in the agriculture sector, which previously lacked vehicles to create value through information. An interesting study would be where wealth was shifted or created by the advent of GMOs among companies that sit in the farm input to major food production/processing supply chain. How as intellectual property as a share of valuation shifted among supply chain segments, and/or has the introduction of patentable intellectual property created new value. This risk research project should answer five key questions:

10 Questions: For each of the above projects, product refers to water, palm oil, and GMOs in the questions below. How is the product used in the US (and if possible globally) over the past few years, either for export or storage, or for what type of end product? Where does its used in the US (and if possible globally) come from over the past few years? And how what are the environmental and social conditions in its use or sourcing? What are the main risks that affect its price and availability? Which companies, or types of companies, profit or face unexpected costs as a result of its price volatility or key risk events? And to what extent are these also linked to food insecurity and geopolitical instability? This project is sponsored by Arlin Wasserman, a Founder and Director of the Menus of Change.

11 UnitedHealthCare Project Name: The market impact of price transparency on the member experience Overview As the healthcare industry shifts to be consumer-focused, UnitedHealthcare is launching a program to envision, incubate, and bring to life bold, new models to reinvent members' healthcare experience. We will simplify, personalize, and connect through integrated product, clinical, and service offerings that enable people to manage their healthcare, improve their health outcomes and better manage the medical cost structure. One of the areas where the member experience lab is focused is on what, how and when price transparency can enhance the member experience. Before, during, and even often times after individuals receive healthcare services they do not know: What services were provided Who provided them How much those services cost and Who is responsible for paying what portion of those cost While we feel confident answering many of these questions around price transparency for our members will significantly improve their experience with the healthcare system, we would also like to answer the following questions in order to deepen our understanding: When is it most valuable to individuals to have access to price transparency data (before, during, or after receiving healthcare services)? Who is most likely to use price transparency tools (demographics, locations) and what tools do they use to access the information (web, mobile, phone)? How does access to price transparency information influence their decisions? Data Sets: UHC Cost Estimator Tool o Time/Date of logins o Services estimated o Platform used to access (mobile, web, call center) Claims Data o Two years of claims data for all members using the cost estimator tool o Claims data for a similar set of members who did not use the estimator tool Member Data o Demographics; Plan, plan design

12 NorthShore Hospital The NorthShore Center for Simulation and Innovation About The NorthShore Center for Simulation and Innovation (NCSI) at NorthShore University HealthSystem in Evanston, IL. recently expanded its simulation center to 13,000 square ft including 7 simulation rooms (2 fully operational trauma rooms, 3 patient rooms, and 2 operating rooms) and a surgical lab for advanced surgical training. Our center is now in the top 5% nationally in terms of size for hospital-based simulation centers (ie not based directly on the campus of a medical school university campus) and our learner throughput is likely in the top 1% as we have learners come through our center on any given month. We are multidisciplinary in nature with attendees from nursing, pre-hospital, medical students, residents in various fields, and attending physicians. As an institutionally based simulation center, our audience focuses more on "adult" learners (ie current practitioners - physicians and nurses) more than university-based medical school simulation centers who focus more on medical students and nursing students. Candidate Projects are Below: Creating the business case and operational workflow necessary to increase utilization of medical simulation center. Project Inquiries: Direct Cost Accounting (Hourly Rate Calculation Update) Capital equipment IT infrastructure Misc Cost Accounting Supplies Personnel NCSI Intangible Value-Adds ($$$) Malpractice Reduction Reduction in near-misses (tie to ERAs Event Reporting)

13 Increased number of students at a reduced price (comparing to external learning for fewer individuals) Center utilization statistics by department (update for FY14) Workflow Integration with B-Line Use of Kiosks for Tracking Learners Marketing Best Practices Website Brochures When/Where/How Google? Strategy/System for Managing Contracts and Fee Schedules

14 Element Bars About We are a custom energy bar company located in Chicago. This means that at customers can create their own custom energy bar by selecting from all natural and organic ingredients and then naming their own bar. Our whole food ingredients are carefully handpicked and kept as nature intended. Then we hand make our bars using the ingredients our customers choose, bake them in our ovens and deliver them freshly baked from our ovens to their doors. The Founder and CEO Jonathan Miller is a Kellogg alumnus from the Class of He has worked with several students from Kellogg including hiring summer interns and serving as clients for other class projects. The Analytical Consulting Lab provides another great opportunity to provide students with rewarding experiences while allowing Element Bars to leverage student skills. Below are 3 projects of interest. The Analytical Consulting Lab provides another great opportunity to provide students with rewarding experiences while allowing Element Bars to leverage student skills. Below are 2 projects of interest. Project 1 Search Engine Marketing and Search Engine Optimization Element Bars shows up in the search results set of Google for both organic search results (Search Engine Optimization - SEO) and paid placement (Search Engine Marketing SEM). We would like to analyze which keywords are driving the highest lifetime value of customers and then think about transitioning expensive and competitive keywords to SEO, while keeping cheap and non-competitive keywords within our Adwords SEM campaign The data we can provide includes purchase behavior, Google Adwords access, and Google Analytics access. Project 2 Demographics of Purchasers via Google Analytics We have purchase data that is stored on our web analytics platform (Google Analytics) and also our internal order system, but this data has not been tied to demographic data (either internally collected or via 3rd party sources). We would like to tie these data sets together and then analyze the highest (and lowest) value customers for demographic trends. The data we can provide is sales data, customer data, and Google Analytics data.

15 About Navistar Navistar is a leading manufacturer of commercial trucks, buses, defense vehicles and engines. Projects Competitive Analysis : A competitive analysis of top 3 competitors to understand product & services offerings in Truck and Bus market segments. Lots of research and segmentation. Understand the differences Navistar v/s Competition The recommendations to add or drop specific offerings in Navistar s current product and services offerings. Future Market / Trend Analysis and Recommendations North America Truck and Bus market s current trends. What are the new demands and features expected by Customers? Some studies, discussions and interviews with people in Trucking. Research on trends: Fuel Efficiency, Driver Comfort, Weight Carrying Capacity, Cost etc Recommendation on disruptive leadership Can use information from above research and provide recommendations on disruptive leadership. Potential, Recommendations Risk Analysis One specific technology s business proposal For example - Natural Gas Market Research and provide a business proposal.

16 Project: Turkish Airlines Our target is to get most revenue out of our flights. We are switching aircraft type and will have more business seats available thus we need to increase load factor in business class cabin with high revenue. Turkish Corporate Club is a great tool to reach corporations who uses higher class of services in our flights, we need to use this program as a major tool to get to our target. Here our obstacle is to get in contact with these company s executives and convincing them to use Turkish Airlines in international routes. Points of Analysis Methods to increase business cabin sales. How to get more members to our Corporate Club program. What is best way to get business class passengers attention to our product. Travel: The team will be expected to travel for a portion of the spring break to work with and present to the executive team in Istanbul. In general, the team must be available for this during the first week of spring break. Airfare is provided by Turkish Airlines.

17 Land O Lakes Project: Risk Management Interface Tool for Dairy Producers Sponsor: Land O Lakes Summary Dairy producers in the United States have faced volatile and challenging market conditions over the past few years that have negatively impacted margins drivers of margin include the price of milk as well as the price of feed which may be comprised of a variety of protein and energy sources (e.g., corn, soybean meal, etc.). As a result, the 2014 Farm Bill has included a new margin protection program for producers that provides protection against these fluctuations. The new program is meant to serve as a key component of the producer s risk management toolbox along with futures, options and physical contracting. The objective of this program is to build an excel-based, forward looking model and interface (may require VBA programming) for Land O Lakes that supports producer decision making in light of the new margin protection program. That is, the producer needs to have a clear understanding of whether to use traditional risk management tools only (futures and options), the margin protection program only, or some combination of both depending on prevailing market conditions. Key questions 1. What are the major risk drivers of margin for dairy producers? Which are most volatile? 2. How much basis risk is associated with both milk prices and feed inputs? How does this vary by region? 3. How much feed does the producer grow on farm vs. purchased from the outside? Should this be considered in the hedging formulation? 4. How should producers account for basis differences between their on-farm costs and the formula index used in the margin protection program? 5. Given that premiums with the new margin protection program are fixed, can or should a market maker replicate the government based contract? 6. What risk management strategy should be employed in periods of high margins? Low margins?