Justine R.

Garcia
BSBA 3
Principles of System Thinking
As the manager of a small retail business facing a decline in sales, I would analyze the situation using the Iceberg Model to
uncover the visible symptoms, underlying reasons, and hidden factors affecting our sales performance. Understanding these
layers will help us develop a clear plan to address each level effectively and work towards improving our sales and overall
business success.
ICEBER

- The obvious decline in sales includes fewer customers visiting the store, each
spending less money on average, and more products remaining unsold on the
shelves. These are the clear signs that something is amiss in the business.

VISIBLE DECLINE IN - Looking deeper, we notice patterns and trends such as more people choosing
SALES to shop online instead of coming to the store, facing tougher competition from
bigger retailers, and witnessing a drop in customer loyalty. These ongoing trends
show us how the market is changing and affecting our sales.
PATTERNS OR TRENDS
- Delving further, we find systemic issues like using outdated marketing strategies
SYSTEMIC that are not reaching our target customers effectively, not managing our inventory
efficiently which leads to having too much or too little stock, and not focusing
STRUCTURES
enough on making sure customers have a great experience when they shop with
us. These structural problems could be at the root of our sales decline.
MENTAL
MODELS - Going even deeper, we encounter mental models that customers hold, such as
thinking our products are too expensive compared to other stores, not being
aware of our brand because our marketing efforts are not reaching them, and
having a negative perception of our customer service based on past interactions.
These customer perceptions can heavily influence their decision to buy from us.
➢ Propose a plan of action to address and improve the sales performance based on your analysis.
To improve our sales performance based on the analysis using the Iceberg Model, we can take the following steps:
1. Update Marketing Strategies: We will revamp our marketing efforts to reach our target customers more
effectively. This may include utilizing social media, email marketing, and online advertising to increase brand
awareness and attract more shoppers to our store.
2. Optimize Inventory Management: We will improve how we manage our inventory to ensure we have the
right products in stock at the right time. By tracking sales data and customer preferences, we can avoid
overstocking or understocking items and meet customer demand efficiently.
3. Enhance Customer Experience: We will focus on providing exceptional customer service to enhance the
shopping experience. This includes training our staff to be attentive, helpful, and friendly to create a positive
impression on customers and encourage repeat visits.
4. Implement Loyalty Programs: We will introduce loyalty programs and incentives to reward repeat
customers and encourage loyalty. This can help increase customer retention and boost sales through repeat
business.
5. Monitor and Adjust: We will regularly monitor sales data, customer feedback, and market trends to track
the impact of our actions. Based on this information, we will make necessary adjustments to our strategies to
continuously improve sales performance.
To perform these actions, we will assign specific tasks to team members, set clear goals and timelines for implementation,
and regularly review progress to ensure we are on track. By working together as a team and staying focused on our goals,
we can successfully implement these strategies and drive growth in sales for our retail business.