Statement: A consulting firm’s partners are split on whether to specialize in a niche market or maintain their current broad service offering. The niche market offers higher margins but limits growth potential. The broad approach provides more opportunities but faces intense competition and pricing pressure.
What strategic decision-making approach should they use?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is to analyze their core competencies and competitive advantages to determine the best strategic fit.
Best Approach: When a business is faced with a choice between two contrasting and strong strategies, blindly choosing one (e.g., simply Option 1 or Option 2) is not the right decision. The company should first evaluate its core competencies and competitive advantages.
This analysis will help them understand which path will be more successful and which strategic fit will be best for the company in the long term.