Analyzing Strategic Business Decisions
Two companies, Innovate Inc. and Apex Corp., are deciding which of three new technologies to invest in: Alpha, Beta, or Gamma. The table below shows the projected profits (in millions of dollars) for each company based on their simultaneous decisions. The first number in each cell represents the profit for Innovate Inc., and the second number represents the profit for Apex Corp.
| Apex Corp: Alpha | Apex Corp: Beta | Apex Corp: Gamma | |
|---|---|---|---|
| Innovate Inc: Alpha | (10, 10) | (12, 15) | (14, 8) |
| Innovate Inc: Beta | (15, 12) | (11, 11) | (9, 14) |
| Innovate Inc: Gamma | (8, 14) | (14, 9) | (13, 13) |
Suppose you are a consultant for Innovate Inc. and you have reliable intelligence that Apex Corp. will definitely invest in technology 'Beta'. Identify Innovate Inc.'s best response. Explain your reasoning by comparing all of Innovate Inc.'s potential outcomes given Apex Corp.'s choice. Finally, determine if this same action would still be Innovate Inc.'s best response if Apex Corp. had chosen technology 'Gamma' instead.
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