World’s biggest casino

Modern business is beginning to awaken to the power of prediction. Take, for example, a major retailer. The task of the major retailer’s chief executives is to responsibly and consistently steer their organization toward sustainable growth and profitability—no easy task in today’s competitive landscape. Executives are often forced to guess what their customers want and hope that the market responds favorably to their offers. Millions of dollars are placed on these educated guesses every day in what might be called the world’s biggest casino: the commercial marketplace. Of course, executives at major brands don’t simply guess what their customers want. To make informed decisions, large brands conduct consumer and market research: surveys, focus groups, and so on. Some businesses, however, have too little information about their customers while other organizations have too much, leading to a sea of confusing statistics and averages. In any case, to make sense of the data, businesses need effective models.