Improvement of competitiveness through the application of analytic hierarchy process, game theory, decision trees and design of experiments tools

Abstract

Competitiveness is important for all companies. Because qualitative and quantitative factors are associated with it, strategic decisions must be supported by different analytical tools. In this work, we describe the application of specific tools to improve the expansion strategy for a food supplements company which is facing strong competitors. Two main alternatives were considered: increasing the production of the current products, and extending the company’s portfolio by adding new products. In contrast to other works, the competitors’ key features and likely response were considered as determinant factors for the assessment of these alternatives. These were addressed through analytic hierarchy process and game theory tools. Then, economic assessment and optimization of the new products’ features were addressed through decision tree and design of experiments tools. The results of this approach corroborate its suitability for other companies where appropriate strategic actions must be formulated in advance of the possible competitors’ response to increase competitiveness.