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Extraction and visualization of industrial service portfolios by text mining of 10-K annual reports

Author

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  • Jihwan Lee

    (Hankuk University of Foreign Studies
    Seoul National University)

  • Yoo S. Hong

    (Seoul National University)

Abstract

As more and more manufacturing companies accumulate profits from service provision, the ability to monitor the adoption of the industrial services of other companies grows more important. The purpose of this paper is to propose a data-driven methodology for extraction of the industrial service portfolio from a company’s annual report. In this approach, form 10-K, a special format of annual report regulated by the Security Exchange Commission in United States is utilized as the data source. Because this document type contains rich information on a company’s operating segments, industrial service information is easily retrieved. Given the sheer volume of such documents, however, manual inspection is impractical. In order to resolve this issue, a text-mining algorithm is applied to automatically examine word-usage patterns and to identify the service portfolio. Then, the service portfolio’s relative position in the market is visualized on a positioning map. Due to the multi-dimensionality of the data, self-organizing map (SOM) is used as an alternative visualization scheme. SOM enables easy identification of the major service clusters as well as niche areas in the market; these, in turn, provide valuable information pertinent to service development planning. Also, and not least, policy makers can utilize our methodology to detect the servitization trends of various industries.

Suggested Citation

  • Jihwan Lee & Yoo S. Hong, 2016. "Extraction and visualization of industrial service portfolios by text mining of 10-K annual reports," Flexible Services and Manufacturing Journal, Springer, vol. 28(4), pages 551-574, December.
    • Handle: RePEc:spr:flsman:v:28:y:2016:i:4:d:10.1007_s10696-015-9235-1
    DOI: 10.1007/s10696-015-9235-1
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    References listed on IDEAS

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    1. Vandermerwe, Sandra & Rada, Juan, 1988. "Servitization of business: Adding value by adding services," European Management Journal, Elsevier, vol. 6(4), pages 314-324, December.
    2. Andrew Davies, 2004. "Moving base into high-value integrated solutions: a value stream approach," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 13(5), pages 727-756, October.
    3. Li, Feng, 2008. "Annual report readability, current earnings, and earnings persistence," Journal of Accounting and Economics, Elsevier, vol. 45(2-3), pages 221-247, August.
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    Cited by:

    1. Georgia Boskou & Efstathios Kirkos & Charalambos Spathis, 2018. "Assessing Internal Audit with Text Mining," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 17(02), pages 1-22, June.
    2. Hui Wan & Jens Mathis Rieckmann & Qianqian Zhang & Qiao Ping, 2020. "Research on New Energy Automobile Manufacturing Service Derivatization Based on TRIZ," Sustainability, MDPI, vol. 12(16), pages 1-12, August.

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