1. A2 Business Studies Objectives and Strategy Unit 6
Decision-making to achieve objectives

2. Decision-making models
Models are used to assist firms in important decision-making at every level
It varies from short-term and long-term, tactical and strategic decisions
Decisions are constrained by internal and external factors
Often there is risk involved
There are a number of models we will look at: Scientific decision making and Ansoff’s Matrix

3. Scientific Decision-making
1. Set Objectives
5. Implement and
review decision
In line with what want to achieve within a given time-scale
2. Gather data
4. Select a strategy
/make a decision
Has the outcome succeeded in achieving the objectives?
Primary+secondary research
3. Analyse data
Based on data analysis
Using methods such as investment appraisal, cost-benefit analysis, critical path analysis, decision trees

4. Scientific Decision-making
Advantages:
A systematic process which removes ‘hunch’ decisions, bias and subjectivity
It ensures decision are well researched which reduces risk
Disadvantages:
It can be a slow process and often reduces creativity
Does not guarantee the right decision is made

5. Ansoff’s Matrix Decision-making model/tool for corporate planning.
It provides companies with strategic choices (options) each with different degrees of risk.
Igor Ansoff

6. e.g. Mars Ice cream,Cadbury’s CreamEgg bar
Ansoff’s Matrix
EXISITING
NEW
PRODUCTS
Enter a new market with an existing product in new geographic locations or market segments
e.g. Johnson's baby shampoo targeting adults, Kellogg’s Cornflakes at different times of day, or a new band trying to make it in America E X I S T N G W M A R K
MARKET PENETRATION
CONSOLIDATION
WITHDRAWAL
DO NOTHING
New product in a new
market
e.g. 1990s Nokia
moved from car
tyres to mobile
phones and is now
market leader
PRODUCT
DEVELOPMENT
Modifications or additions to a product, which maintains differentiation
e.g. Mars Ice cream,Cadbury’s CreamEgg bar
Increasing risk
MARKET
DEVELOPMENT
DIVERSIFICATION
Increasing risk

7. Existing product, Existing markets
Market penetration - Promote growth in same market and develop further brand loyalty
Consolidation - Concentrate on activities in which have a competitive advantage, maintain market share
Withdrawal - Pull out of market usually with very low demand
Do nothing - Continue with the same strategy only appropriate in short term

8. Student Activity 1. Complete the A-Z activity on Ansoff’s matrix
2. Read the Hornby case study page 480
Which of the strategic options in Ansoff’s matrix have benefited Hornby? (20 minutes)
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