Question 1

Section B - Case 2: CyberShield

CyberShield is a tech startup developing a new B2B SaaS (Software as a Service) platform for cybersecurity.

The founders are deciding between three marketing strategies (Aggressive, Moderate, Conservative). The payoff matrix (profits in $000s) depends on competitor reaction:

Strategy | Weak Reaction | Strong Reaction
Aggressive | 500 | -100
Moderate | 300 | 100
Conservative | 150 | 120

If the founders are extremely risk-averse, which strategy will they choose using the Maximin rule?

Accepted Answer

1. Identify the worst possible outcome (minimum) for each strategy. 2. Choose the strategy that has the highest (maximum) of these minimum values.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Choosing Aggressive (which is Maximax) or Moderate (which might be chosen under Minimax Regret).

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 3

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