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The main stages of the analysis 333
(iii) To minimize the risk associated with any developments. (Some
strategies would offer the benefit of being less risky, and we will
refer to this as ‘Risk’. Note that we will be using values rather than
utilities here even though the decision involves risk – we discussed
this issue in Chapter 3.)
Identifying the possible strategies for each region
The group of managers then considered the strategies which were
available in each region and these are summarized in Figure 13.1. For
example, in the North sales region two strategies were identified. Either
the operation there could be scaled down so that only three outlets
would be retained (this might be sensible in view of the recent poor
performance of the company in this region), or the status quo could
be maintained.
Note that in Figure 13.1 the strategies for each region are organized in
the order of the level of resources which would be required, with level
1 representing the lowest level of expenditure. The figure can also be
used to identify the possible combinations of strategies which could be
Region
North
West
East
South
Reduce to
three outlets
Close down
operation
Status quo
Status quo
Level
1 2 3
Status quo
Status quo
Expand to
four outlets
Expand to
16 outlets
Expand to
six outlets
Expand to
10 outlets
Also open
three town
center outlets
Figure 13.1 – Possible strategies identified by managers of the furniture company