In the world of business, a comparative evaluation helps decision makers select the most viable option from a set of possibilities. Business leaders must choose capital projects and investments, job candidates and marketing strategies. Comparative analysis methods contrast the benefits and drawbacks of each possible choice. These methods might rank choices in terms of expected or actual performance. The decision-making process may incorporate a set of predetermined criteria that serves as a basis for comparison.
Pros and Cons
A simple comparative analysis method is the pros and cons list. A decision maker lists a set of advantages and disadvantages under each available choice. For example, when a job applicant receives two separate job offers with different companies, she may list pros such as salary, benefits and potential advancement opportunities. In a pros and cons list, the decision maker will usually assign a level of importance to each advantage and disadvantage. The basis for selection rests on which option contains the highest amount of highly ranked benefits.
Numbers or quantitative results might shape the comparison and selection process. This is typical when a decision maker needs to choose between two or more capital investments. Business leaders examine the projected rate of returns and will usually pick the project with the highest figure. Individuals might use projected costs to compare a vacation in Hawaii versus Florida. If the primary concerns are high costs and sticking to a predetermined budget, the choice with the lower cost wins.
At times, a comparative evaluation involves the use of subjective concerns, including perspectives, ideas, personal likes and dislikes. Although most hiring managers do not admit it, they typically select job candidates due to subjective responses to personalities, appearances, and opinions about professional backgrounds. Consumers may choose a certain car brand over another due to the image that its advertising campaigns project. Prior experience with a particular brand may form a perception of higher quality in the mind of the consumer, making it more favorable over the other choices.
Comparative evaluations use similarities and differences between features to contrast several choices. A prime example of this is substitute products. Two different brands of cellular phones may contain a set of similar capabilities, such as battery life and web-browsing software. One brand might feature the ability to listen to Internet radio, while the other features a built-in digital camera. When more similarities than differences exist between two substitute products, the decision maker is likely to compare them based on a single distinguishing factor, such as price.