Please enable JavaScript.
Coggle requires JavaScript to display documents.
STRATEGIC CHOICE (DECISION TREES (4 MAIN FEATURES (All of the options open…
STRATEGIC CHOICE
ANSOFF'S MATRIX
A model used to show the degree of risk associated with the 4 growth strategies ; market penetration, market development, product development & diversification
-
-
PRODUCT DEVELOPMENT
The development and sale of new products or new developments of existing products in existin markets
-
DIVERSIFICATION
The process of selling different, unrelated goods or services in new markets
- Most Risky May be a possible option if it balances out by the.chance of a high profit
FORCE-FIELD ANALYSIS
Technique for identifying and analysing the positive factors that support a decision ('driving forces') and negative factors that constrain it ('restraining forces')
-
LIMITATIONS
- Unskilled or inexperienced managers could fail to identify all of the relevant forces invloved in the change process
- The allocation of numerical values to the driving and constraining forces is rather subjective - two managers independently undertaking the same force-field analysiscould arrive at different values for the forces and consequently, propse very different decisions based on their assesments
DECISION TREES
A diagram thaf sets out the options connected with a decision and the outcomes and economic returns that may result
4 MAIN FEATURES
- All of the options open to a manger
- The different possible outcomes resulting from these options
- The chances of these outcomes occuring
- The economic returns from these outcomes
ADVANTAGES
- They force the decision-maker to consider all of the options and variables related to a decision
- They put these on easy-to-follow diagram, which allows for numerical considerations of risk and economic returns to be included
- The approach encourages logical thinking and discussions among managers
LIMITATIONS
- Inaccuracy of the data used
- The probabilities of events occuring may be based on past data, but circumstances change.
- Helps in decision-making, but can't replace either the consideration of risk or the imapct of non-numerical qualitative factors on a decision
- Not forgotten that expected values are average on returns, assuming that outcomes occur more than once ( the average is not the final result )