Bay Area Automobile Gadgets or BAAG is an automobile industry wherein the

said industry is developing different kinds or varieties of gadgets for different types of
cars. However, after the success of Global Positioning Satellites (GPS), BAAG come up
again with the idea to release new equipment for cars which is the Driver Support
System (DSS). Meanwhile, after talking about whether to pursue the product or not,
BAAG encountered a problem resulting them to undergo in the decision-making
process. They are thoroughly thinking on whether to fund or sell their research. In line
with that, we presented some alternative courses of actions or solutions that may
address their problem. Such solutions are as follows:

(1) FUNDING THE RESEARCH

Advantages:

a. There is an 80% chance that the debts will become successful

b. This research will somehow help them to become top performing company as
this will be released under their organization with their own brand on it.

c. The Driver Support System will not only help the company grow but will also
help the drivers of each automobile.

d. It is a new opportunity for Bay Area Automobile Gadgets (BAAG) to bloom in

the automobile industry.

Disadvantages:

a. They will release huge amount of money for the research

b. There is still uncertain result as this will be based on the decisions they make.

c. Successful or not, there is a possibility to sell the research

(2) GET A SUPPORT FROM A FINANCIAL INTERMEDIARY

Advantages:

a. Financial intermediaries or banks would help BAAG in funding their research

that is assumed to result in a successful scenario.
 b. Financial intermediaries most especially, investment banks are good sources
of funds.

Disadvantages:

a. From the moment a business or a company gets support from a financial

intermediary or bank, the said organizations becomes a secured creditor with
collateral over the business assets.

b. The business would feel the pressure in making sure that their project which is
the Driver Support System would become a success to secure or save its own
assets or properties.

c. The company would take a high risk.

(3) FIND A POTENTIAL INVESTOR

Advantages:

a. Potential Investors would help the business grow

b. Potential Investors would be good sources of funds with regards to funding the
research.

c. It would address financial concerns.

d. The risk of failure is shared with the investor and not only a burden of the
company.

e. It would somehow help them build their own trademark

f. It is a chance for them to be considered as one of the top performing

companies in the automobile industry.

Disadvantages:

a. The pressure to meet a potential investor’s expectations

b. Finding a good investor and convincing them to invest would take too much
time and effort
(4) SELL THE PRODUCT

Advantages:

a. There will be no risk of failing

b. The income is fixed

Disadvantages:

a. Bay Area Automobile Gadgets will lose the opportunity of becoming the top
performing company in the automobile industry

b. People may not patronize their products because of being “outdated” as they
would be longing for something new

(5) DEVELOP AN ALTERNATIVE

Advantages:

a. It will lessen the risk

b. It will not require a huge amount of money in funding

Disadvantages:

a. Developing alternatives is challenging

b. Too much time and effort would be exerted

c. Because there is less risk or low risk, there is also low return

Based on the alternative courses of actions or solutions mentioned above, we

therefore conclude that alternative course of action number one and number three,
funding the research and finding a potential investor, respectively could be the best
solution for the problem in this case. Either they fund the research themselves or find an
investor as a source of fund would bring more advantages and less disadvantages. In
the business industry, there is nothing certain. You will always risk something to receive
something in return. The golden rule is that “the higher the risk, the higher the return”.