Question 1- The following table shows the aggregate scores of three strategies in four scenarios. Which strategy is the most attractive?
| Strategy |
Scenarios |
|
Steady state |
Austerity |
Big bang |
Gentle growth |
| Status quo |
20 |
35 |
35 |
50 |
| Expand overseas |
64 |
45 |
78 |
62 |
| Reduce business to core activities |
51 |
40 |
65 |
38 |
Question 2- A car manufacturer has two objectives: (1) to maximize profits and (2) to maximize market share. It develops two scenarios for the next 10 years using the extreme-world method:
(a) Carbon fuels prevail and
(b) Green governments rule.
Three strategies are to be evaluated under the two scenarios:
(1) Status quo,
(2) Move to produce hybrid cars and
(3) Produce a mixed range of cars.
The scores for the strategies on each objective under each scenario are shown below.
Objective: Maximum profits
| Strategy |
Scenarios |
|
Carbon fuels prevail |
Green governments rule |
| Status quo |
10 |
0 |
| Move to hybrid cars |
15 |
75 |
| Produce miixed types of cars |
40 |
60 |
Objective: Maximize market share
| Strategy |
Scenarios |
|
Carbon fuels prevail |
Green governments rule |
| Status quo |
70 |
0 |
| Move to hybrid cars |
50 |
100 |
| Produce mixed types of cars |
85 |
30 |
The company's managers consider that the improvement from the worst market share to the best is only 35% as desirable as the improvement from the worst to the best profit.
(a) Determine aggregate scores to reflect the performance of the three strategies in each of the two scenarios.
(b) Interpret your results. Which strategy appears to be the most risky and which appears to be the most robust?