Case Study: Carbonated Fruit Drink

Carbonated Fruit Drink
Any business facing product expansion or creation should carefully examine what a new product or product extension will bring to the company as a whole. Sometimes a product may seem to be a good idea; however the cost can outweigh the benefits if proper strategies are not used. The following example is of a soft-drink company with an idea of expanding into a carbonated fruit drink. By implementing the six steps to decision making the company can make an unbiased educated decision. The use of the six step decision making process allows management to investigate the probability of a new products success prior to investing money into the project.
The first step is to define the problem (Samuelson & Marks, 2012). In this situation, the company must figure out whether introducing a new fruity beverage is a good thing to do for the company. This company is a soft-drink company so there needs to be a careful analysis of the market to see if this product is one that not only can be integrated into the brand of the

Through using decision making tools that calculate information such as linear-programming decision trees and other analytical tools, the optimal decision can be made (Samuelson & Marks, 2012). Once this has been completed the best choice should be apparent.
The final step in the decision making prices is performing a sensitivity analysis. Here is where one can considers possible variations of the anticipated conditions surrounding the optimal decision. How does an economic downturn affect the profitability of the new fruit flavored beverage? What if a competitor offers a higher quality product for less money? These types of questions will be asked by upper management and by carefully investigating different uncontrollable factors one will be able to answer in a way that the best decision can be