Preliminary communication
APPLICATION OF DECISION TREE TO THE PROBLEM OF COMPANY EXPANSION INTO NEW MARKETS
Toni Crljen
; Faculty of Organization and Informatics, University of Zagreb, Varaždin, Croatia
Nikola Kadoić
orcid.org/0000-0002-8455-9105
; Faculty of Organization and Informatics, University of Zagreb, Varaždin, Croatia
Dijana Oreški
; Faculty of Organization and Informatics, University of Zagreb, Varaždin, Croatia
Abstract
The placement of a company's products or services in new markets can be analyzed as a decision-making problem in conditions of uncertainty and risk. When entering a new market, the company must decide which market it is entering. After choosing the market and producing products or creating services, as well as developing sales channels for its products or services in that market, which can represent a significant cost, the market will respond to the company's offer (accepting or rejecting the offer). Then the company will see if the decision to choose that market was good or not. The company can hire an appropriate agency that can help ensure a better market response. This paper discusses a decision-making model for market entry based on the decision tree method. In a case study, an IT company can enter the market independently or with the assistance of a specialized agency. The use of a decision tree in this problem enables better visualization of essential decision aspects, a rational approach to decision-making, and ultimately a more profitable decision. Additionally, such a decision-making model can serve as promotional material for an agency offering mediation services for entry into new markets, as the decision tree visually and analytically demonstrates the advantages the agency offers compared to independent market entry.
Keywords
uncertainty; risk; mediation; market-entry; decision tree
Hrčak ID:
314727
URI
Publication date:
15.3.2024.
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