The techniques and tools you use to make business decisions impact your results. This is why you should consider your current circumstances and desired outcomes to determine which approach to use for a specific situation.
Every business decision you make impacts your organization as a whole. Choosing the best approach helps you determine the most efficient and effective decisions.
Discover three of the top techniques and tools you can use to make more informed business decisions.
A chart that analyzes your company’s strengths, weaknesses, opportunities, and threats (SWOT) can help determine a strategy, action, or initiative that can reach your desired results. This is especially helpful for strategic planning.
- A SWOT analysis considers multiple viewpoints for deeper insight into an issue.
- You can plan for the presence of new competitors or the impact of new government regulations.
- Under “strengths,” list the things your company does well, how it differs from your competitors, and what your internal resources and tangible assets are.
- Under “weaknesses,” list the things your company lacks, the things your competitors do better than you, and your resource limitations.
- Examples of what to write under “opportunities” include underserved markets for your products, few competitors in your areas, an emerging need for your product.
- Examples of what to write under “threats” include emerging competitors, changing regulatory environment, and negative media coverage.
A chart that handles multiple choices and variables can help clarify a problem. A decision matrix may be most effective in determining solutions to issues involving cost/price, level of quality, customer satisfaction, or high returns.
- Listing the pros and cons of different options lets, you emphasize the importance of each factor.
- You can more accurately weigh your options and potential results against each other.
- Subjective opinions can become more objective.
- Create a table with your options in the first column and the factors that affect the decision in the first row.
- Score each option and weigh which aspects are more important.
- Add up the final scores to determine which option is best.
This evaluation includes preferences, resources, and informational constraints to make more optimal decisions. It weighs the benefits of input or activity against the costs. A cost-benefit analysis is best used to determine whether an activity or input provides a maximum return on investment (ROI).
- Assessing the costs and benefits of each decision lets you take the most beneficial course of action.
- Create a list of all potential decisions along with their benefits and costs.
- Use the aggregate benefits and costs results to determine which is the best course of action to take.
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