Why Are Decision Trees Useful to Managers Who Plan Business

question 65

Multiple Choice

Why are decision trees useful to managers who plan business strategies?

• A)Decision trees explain the level of concentration in an industry.
• B)Decision trees can be used to increase the amount of product differentiation; this enables managers to charge higher prices for their products.
• C)Decision trees provide a systematic way of thinking through the implications of a strategy.
• D)Using a decision tree always leads to a dominant strategy.

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Definitions:

Long Tail

A business strategy that allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items.

Feature Creep

The tendency for products to become overly complex due to the continuous adding of features, often compromising usability and functionality.

Inert Set

A group of brands that a consumer is aware of but is indifferent towards when making a purchase decision.

Brand Choices

The decision process and factors influencing why consumers prefer one brand over others within a product category.