ACCA Strategic Professional · Strategic Business Leader · Strategic choices
Tamarind Pharma is evaluating a joint venture to develop a new drug. The board wants to test acceptability by understanding how the outcome could vary if clinical trials fail or the licence is delayed. Which approach best addresses the risk element of acceptability?
Sensitivity or scenario analysis best addresses risk within acceptability. It shows how expected returns change if assumptions such as trial success or licence timing prove wrong. A resource audit supports feasibility, while PESTEL and the Ansoff matrix help assess suitability or generate options rather than test risk.
- ASensitivity or scenario analysis of the expected returnsCorrect
- BA resource audit of the firm's existing laboratories
- CA PESTEL analysis of the pharmaceutical market
- DA mapping of the firm's products on the Ansoff matrix
Explanation
The risk element of acceptability examines how returns change if key assumptions fail, which is done by sensitivity analysis, scenarios or similar. A resource audit relates to feasibility, PESTEL and Ansoff to suitability and options generation.
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