Evaluating strategic alternatives: An analytical model

The amount of information involved in strategic decision making and the computational limitations of human decision makers makes strategy selection a difficult task. Various approaches from sheer intuition to computerized decision systems have been proposed for strategy selection. In this paper we present an analytical model which systematically evaluates a series of strategic alternatives by decomposing environmental opportunities and threats into internal, transactional, and contextual segments. Judgments about opportunities and threats are used to obtain two composite weighted scores measuring the risk and return associated with each strategic alternative. The proposed system puts the decision maker and the computer into an interactive partnership by providing a formal and systematic approach to strategy selection while using the computer to manage complex logical processes and vast amounts of information.