Business Problem-Solving and Strategy

2Reviewing and Selecting Options 1: Rationality

The Main Points in Reviewing Rationally

Let's take a look at the points used to evaluate rationality. In each category, assess the result of each option if they are selected.

Potential sales growth

Let's look at the potential sales growth first. Here we gauge the prospect of improvement in sales in the future if this option is chosen. Base your evaluation on statistical viewpoints, such as expected market growth, and how much market share can be gained in the competitive environment.

If it is difficult to estimate the market scale and the potential market share gained, or if the estimate itself is not very useful because the market is highly dispersed, break down the sales components (parameters) and try to estimate the potential sales based on the outlook of each parameter. For example, you can estimate the sales and how each parameter will change in the future by using formulas like store × sales per store, and the number of customers × revenue per customer.

Potential profit improvement

For profitability, we'll evaluate based ...