The biggest feature of SOM (Self-Organizing Maps) is that it brings the concept of “topology” to data analysis. It is a paradigm shift not only in business strategy management but also in data analysis in general. A paradigm shift is an extension of scientific knowledge, such as Einstein’s theory of relativity from Newtonian mechanics.
By incorporating the concept of topology, which has not existed in conventional statistics, into data analysis, we can summarize big data, build nonlinear models, visualize complex relationships between attributes, strengthen cluster analysis, and integration of various predictions/ classification model.
In business strategy management, “connection” between each business domain of the company is important. Strategy, originally a term of warfare, refers to a plan for where to deploy troops next. In war, it is essential to secure logistics to transport troops and goods to the front lines. Therefore, Spheres of Influence must be geographically connected and deployed effectively without overly dispersed military forces.
By utilizing SOM for business strategy management, we can accurately determine company’s strategic business domain (target group), using survey data representing the market from various perspectives, such as customer demographic attributes, degree of engagement (customer share), needs, applications, lifestyles, preferences, technologies and products.