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• identify and explain the key criteria for evaluating strategic options…

- - - - Value/effort assessment
        
        Evaluates the potential impacts of the strategic options
        Value revenue, profit or return
        Effort resourcing, time, cost and risk
        
        figure 5.9!!!!!!!!!!!
        
        Low-hanging fruit: High-value and low-effort options should always be pursued
        (i.e. adding a new variation to current production)
        Blood, sweat and tears: High-value and high-effort options require time and resources, but have great potential to create high value for the organisation. should considered but focus on few options because of the extensive effort required. (i.e developing a completely different product)
        Delegate or dump: Low-value and low-effort options can be delegate/dump as they do not provide sufficient value.
        Dead ducks: Low-value and high-effort options are not worth extensive effort, given the expected limited value.
      - Weighted criteria evaluation tool
        
        The criteria can vary depending on what the option is and what the organisation values most
        
        • A template that can be customised to evaluate a number of options and determine how feasible each option is for the organisation
        • Weightings to options that are considered more important than others
        • Each strategy is assessed according to a number of different criteria, with a maximum score for each.
        • Each criterion has a different maximum score, depending on its relative importance.
        • The most attractive strategic options are those that have the highest weighted scores.
        • Business analytics involves using information technology to identify patterns in data and predict the likely outcomes of events
        
        IDGRIPSVCRCSR
        weighted criteria picture!!!!!!!!!
        
        The aim of the weighted criteria evaluation tool is to objectively compare and focus on the options that show the most promise in terms of opportunity, size and capability to implement.
        This approach also helps to rule out those that are not at all attractive—the next stage of identifying the options that can be clearly rejected. While the process will hopefully identify one ‘must do’ project for the organisation, it is important to retain the options that rank in the middle, as with the value/effort assessment methodology.
      - Risk assessment (see separate objective map)
      - cost benefit analysis
        
        Benefit must exceed cost
        
        Calculated based on the expected time period over which costs will be incurred and benefits received.
        
        Discounting all the costs and projected benefits back to net present value provides an indication of the total expected costs and benefits in today’s dollars
        
        Facilitates the comparison of alternative options that may have different time periods and durations
      - What if analysis
        
        Step 1. Estimate the benefit of the successful implementation of an option
        Step 2. Determine the impact of expected risks on achieving the expected value, by multiplying the total value by the expected risk %
        
        This is a fairly simplistic approach, but the aim is to apply the same approach to all the options in order to objectively determine which options are most promising.
        More detailed analysis can then be carried out on the options that are most promising, using specific tools and approaches for modelling what-if scenarios.
      - Timing Risk
        
        Speed to market and the time lag before competitor enter
        The faster a product can be brought to the market, the better, in terms of maximising the window where maximum profits are gained because there is limited /non-competition
        
        This window of maximum opportunity debate:
        • launch a new product before it is 100 per cent ready or waiting until all the problems with it are fixed OR
        • ‘Go early’ to capture the window of maximum opportunity while product testing is not 100% ready
        It can be as expensive to move too early as it is to leave investments too late (then losing too much money)
        
        Specific risks for market development