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BMT's - Coggle Diagram
BMT's
SWOT Analysis
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Benefit
Allows businesses to analyse their current position, and find aspects that they need to either take advantage of or address to be successful long term.
Allows businesses to plan strategically what the best approach and strategy to improving aspects of it might be
Drawback
Time consumption - creating a SWOT analysis from scratch is hugely time consuming, and can represent an opportunity cost both in terms of time and financial cost.
Can become outdated very quickly - by the time the business has identified a potential strategy, the external landscape may have changed.
Ansoft Matrix
Def: Way of considering the different potential growth strategies that a business may use to expand, considering two factors:
(1) whether growth has taken place in an existing or a new market
(2) whether the strategy uses an existing or a new product.
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Boston Matrix
One of the key decisions that businesses must make is in relation to the marketing of the different products in its product portfolio.
Boston Matrix can analyse the product portfolio from: market share and market growth. Depending on where a product falls, it will influence the approach to how a business chooses market its product.
Stars: high market share, High market growth, continued investment to remain where they are.
Problem Child: Low market share, high market growth. either investment and divestment. If investment is successful, it develops into star, if not, money is wasted. Business can decide to pull out to reduce risk.
Cash Cow: Milking, high market share, low market growth business will reduce spending to maximise profit for investment in stars and probem child
Dog: Low market share, low market growth. business can get rid of them or keep some to maintain little profit and possible brand image.
Decision Tree
Decision trees are a decision making tool that allow businesses to assess different potential options in a quantitative way.
They weigh up not only the potential perceived financial outcomes of a decision, but also importantly factor in the associated risk.
Key: Square-decision, Circle-possibility, double cross line-do not choose
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Benefit
Allows businesses to weigh up not only the potential financial outcomes of a decision but also the risk involved.
Easy to construct and understand, and allows for a visual representation of what could otherwise be a complex process.
Drawback
Based on estimations - difficult for businesses to know for certain the outcomes and risk of a particular decision. Reliant on quality of initial information.
Does not take into account qualitative factors - there may be additional non-financial factors that would also need to be taken into account (e.g. is the most profitable decision unethical?)
