Genome Inspired Market Structure Visualisation

We bumped into a paper on the concept of strategy by Bruce Henderson from the Boston Consulting Group recently that talked of the beginning of natural competition. Henderson compared cell organism survival with the evolution of strategy. To say that we were excited to read someone of Henderson’s reputation describing our very own approach to MarketScout would be somewhat of an understatement.

MarketScout is anchored on a microbiology inspired framework of economies and markets where we focus on the relationships between millions of unique species fighting for equilibrium; business leaders, politicians, corporate, government and non-government. As Henderson describes, inevitably there is perpetual competition as many species use the same resources and many of the resources for one specimen are other species below them in the ecological chain (think competitive advantage, M&A, talent poaching etc).

Searching for a suitable method to visualise the ‘genome sequence’ of our own Factbase,  we reached out to cutting edge research aiming to visualize structural variation within a genome. Circos began using circular visualisations to show relationships between the sequence of multiple genomes, thus visualizing sequence synteny and conservation. Typically a genome is characterized in several ways, each at a different resolution to show the relationships between corresponding positions within these representations (e.g. sequence assembly and fingerprint map)… Entree our MarketScout transaction and contract data set.

MarketScout Contract Genome Visualisations

We have applied the same technique to visualising the structure of markets and in this particular instance customer/supplier concentration. The Top 4 images runs through four views of structure for one large organisation with its top 20 suppliers and the bottom four relate to four different organisations and their top 20 suppliers.

Interpreting our Structural Genome

Each of the bands on the circumference of the circle represent a different organisation. Starting from the top (12 o’clock) is the organisation in question followed by the top 20 suppliers. The size of the circumference band represents the total value of contracts we have for that organisation over a one year period Jan to Dec 2010.

The size of the chord that connects each circumfrence band represents the value of contracts between the organisation in question and each of it’s top 20 suppliers.

The circumference area for the organisation in question connected to itself is the value of contracts for parties other than the top 20. This provides a visual indication of supplier concentration and their collective power compared to the residual supplier population.

The circumference area for the top 20 connected to itself is the value of contracts that organisation completed with other customers; other than the one in question. This provides a visual indication of customer concentration relative to the one in question.

Mutual Dependancy Example

The first circumference band (organisation ‘A’) here in dark blue shows ~ $1.4b of transactions.

The second band (organisation ‘B’) shows ~800m with a ‘chord’ of  ~$750m connecting them, indicating that it supplied ‘A’ with $750m of contracts/transactions over the period in question, over 50% of the value ‘A’ contracted. Note the ‘B’ has a very small chord attached to itself of ~50m indicating that ‘B’  provided other market players with a very small value of services.

Note the chord on ‘A’ that attaches to itself, this is the third chord on ‘A’ from ~ $1b to $1.1b value mark indicates that transactions with its ‘other’ suppliers (other than the top 20 shown) only summed to ~$100m

‘A’ is highly dependant on ‘B’ and ‘B’ is near exclusively dependant on ‘A’

Immaterial Dependancy

The first circumference band (organisation ‘A’) here in dark blue shows ~ $800m of transactions.

Note the first chord of that band is ~$200m, indicating approx $200m of transactions falls outside the top 20 suppliers.

The remaining bands provide a good mix of dependancy. The bands are ordered around the circumference in a clockwise direction according to the total value to ‘A’; however, you will note the size of the bands do not decrease in size as we go around the circle.

‘L’ in orange is a great example. ‘L’ has ~$600m of total value supplied in transactions over the period, witch about $10m contracted to ‘A’.

In this example ‘A’ contracts ~ 2% of work to ‘L’ and approx ~2% of ‘L’s work is with ‘A’

When this develops a little further we will provide some better examples and case studies and sooner rather than later, our Platform will offer ‘genome’ style visualisations for custom search and filtered results.