CONTEXT IS EVERYTHING
From a strategic marketing perspective, a business is like a battleship where small and medium-sized businesses are cruisers and large businesses aircraft carriers. While aircraft carriers have a range of weaponry and advanced intelligence systems at their disposal, the smaller cruisers have a more limited set of resources.
The advantages small firms have over corporations are shorter chains of command, greater maneuverability, faster market repositioning, and closer proximity to the market. The primary weapon used to capture market share and ensure sustainable growth is the accounting system. Keeping a close eye on various ratios helps optimize available resources and ensures that the business operates at top efficiency. Tracking growth rates of individual categories such as sales revenue, expenses, assets and debt provide greater clarity as to how the company performs internally. This kind of financial analysis only tells part of the story, however; it does not provide the big picture.
The Jupiter platform snaps internal information and ratios into context with the outside market; namely the performance of the sector itself and competitors. A business with an operating margin of 25% and ROE at 15% might appear to be doing well, but if the sector averages yield 35% and 20% respectively, the company is in fact underperforming. In like manner, a business with an operating margin of -5% and ROE at -10% might appear poorly run, but with sector averages at -15% and -30% it is actually outperforming the market. It is all about context.
This type of analysis fits enterprises of any size, location and sector, but is currently open only for professional and industry associations that service specific sectors (e.g. tourism, retail, sports). The reason is that in order to generate a valid market measure, a sufficient number of participating enterprises is required. Also, a high number makes it impossible to extract the financial position of individual enterprises from the market/sector totals.
The presentation to the left provides a snapshot of an actual engagement revolving around airlines operating in the Icelandic market. It provides a glimpse into what types of ratios and indicators Jupiter is equipped with.
The difference between the presentation and the Jupiter platform is that comparing one entity against another is impossible unless permission is granted by that entity.
Associations may require access to entity-level data but such matters are solely between the association and the member.
HI-PERFORMANCE AND SECURITY
Given Jupiter's processing-intense environment, we locate each client-server as close to the client as possible. These satellite servers gather and process data from association members. Mathematical and statistical processes are applied on each update and the result written to a data table. Not doing so would delay data retrieval, particularly when calling for ratios based on hundreds of member firms.
A common concern is that of a competitor being able to infer the financial condition of another. This is impossible to do for three reasons:
1. Each user can only see own data against the sector total, not other entities.
2. The number of entities generating the sector total is high, resulting in plain guesswork as to the position of competitors.
3. The variables that affect competitiveness are numerous and subject to constant change.
Infering the financial condition of a competitor here is just as difficult as for one retailer to infer the condition of another using U.S. Census Bureau data.
JUPITER'S ECONOMIC IMPACT
The better the performance of small and mid-sized firms (SMEs), the stronger the pillars of the economy become. The greater the comparative environment, the better the decisions at corporate and government levels are bound to be. While Jupiter is first and foremost aimed at SMEs that need support and market insights, its primary role at the macroeconomic level is to provide data that does not exist.
Today, we rely on surveys based on limited samples and tax filings to derive information on how our smallest players are faring, but the delays and inaccuracies are too great to be of any use. Jupiter generates that data at a high update frequency and offers great depth and width. The end result is a live roadmap how our sectors are doing that greatly improves response time and assists in determining the best course of action.
