Problem-Solving: Evaluating Alternative Solutions

Introduction

• Problem-Solving: A vital capability in business for overcoming obstacles and promoting innovation. It is essential for adapting to change and maintaining a competitive advantage.
• The development and assessment of alternative solutions are fundamental in encouraging creativity and refining business strategies.

Understanding the Problem-Solving Process

Introduction to Problem-Solving in Business

• Stages of the Process:
  • Problem Identification: Recognising and clearly defining the issue, such as a decline in product sales.
  • Generating Alternatives: Brainstorming various approaches, such as modifying pricing strategies or increasing marketing efforts.
  • Evaluating Alternatives: Analysing feasibility and impact using cost-benefit analysis.
  • Implementing Solutions: Carrying out the most effective alternative, like launching a new advertising campaign.
  • Monitoring and Review: Evaluating outcomes and making necessary adjustments.

Problem-Solving vs. Decision-Making

• Problem-Solving: Dedicated to finding solutions to specific issues.
• Decision-Making: Involves selecting among different courses of action.

• Both processes intersect but hold distinct strategic functions.

Brainstorming Techniques for Generating Alternatives

• Structured Brainstorming:

  • Refrain from criticism.
  • Welcome spontaneous ideas.
  • Build upon existing concepts.

• Mind Mapping: Visualises the connections between ideas to enhance understanding and retention.

Evaluation of Alternative Solutions

Establishing Evaluation Criteria

• Cost: Consider financial effects and long-term benefits.
• Feasibility: Evaluate resources, time, and skills.
• Impact: Assess effects on stakeholders.
• Associated Risks: Identify potential risks and develop mitigation strategies.

Creative Thinking Tools

SCAMPER Technique

• SCAMPER: Substitute, Combine, Adapt, Modify, Put to another use, Eliminate, Reverse.

Practical Application

• Integrating tools like mind mapping with brainstorming to enhance creativity, as practised by Tech Innovators Ltd.

Integration with Indigenous Knowledge

• Utilising traditional practices, such as the Subak system and sustainable farming methods in Africa.
• Fosters sustainability and incorporates community insights for innovative strategies.

Worked Example: Cost-Benefit Analysis for Alternative Solutions

Consider a retail business facing declining in-store sales:

Problem: 15% decrease in foot traffic over 6 months

Alternative Solutions:

1. Renovate store layout - Cost: £50,000
2. Launch online store - Cost: £30,000
3. Increase marketing budget - Cost: £15,000

Analysis:

• Solution 1:
  • Expected benefit: £65,000 in first year
  • ROI = (£65,000 - £50,000)/£50,000 = 30%
• Solution 2:
  • Expected benefit: £45,000 in first year
  • ROI = (£45,000 - £30,000)/£30,000 = 50%
• Solution 3:
  • Expected benefit: £20,000 in first year
  • ROI = (£20,000 - £15,000)/£15,000 = 33%

Decision: Launch online store (Solution 2) offers highest ROI at 50%.

Conclusion

Embracing creative problem-solving techniques alongside indigenous knowledge enriches strategic decision-making and fosters innovation. Employing structured approaches to generate alternative solutions ensures adaptability and significantly advances business endeavours.