Assessment of Performance Measurement in - St Clements University

c. CRITERION OF REGRET: This is also known as savage criterion
and it minimizes the maximum regret of not making the right strategy
and uses the opportunity cost matrix to make the decision. For each
course of action, there are costs involved in choosing the opportunity of
having a different course of action after states of nature have been
known. These costs are really regrets of not choosing the best course of
action. Out of the maximum regret for each course of action, we choose
the minimum regret and the corresponding course of action.
d. LAPLACE STRATEGY: The Laplace strategy assumes that all
states of nature are equally likely to occur. This means that the
strategist does not have anyone outcome that is more likely to occur
than others. Hence, both are the case of pay-off matrix as well as
opportunity cost matrix, all states of nature have the same probability of
occurrence.
e. DECISION UNDER CONFLICT: These decisions under conflict
forms basis of games theory. The games with complete conflict of
interest are known as zero sum games, in which the gain of the decision
maker equals the loss of the opponent for example, if the Marketing
Manager of a company wants to increase the market share of his
product, it will be at the expense of the market share of his competitors.
2.4 COMPETITIVE STRATEGIES
Competitive strategy is the means by which organizations seek to
achieve and sustain competitive advantage.
Porter (1980) in analyzing competitive strategy introduced three broad
frameworks. These are competitive strategy in fragmented industries,
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