One of the areas where data analytics helps organizations with is Strategy Formation. Companies will typically spend significant time, energy, and resources in this area as they lay out plans for the future. What type of data analytics is best suited to help in this area, and why?
A) Descriptive analytics since it helps pinpoint trends in the past so the organization can plan for the future
B) Diagnostic analytics since it looks at past data to determine a cause that they can then mitigate in the future
C) Predictive analytics since it uses models to predict what will happen in the future
D) Prescriptive analytics since that is the type of analytics that provides information about what a company should do to achieve a desired outcome

Question

Quizplus · Accepted Answer

This question requires familiarity with data analytics and how it applies to strategy formation. Choice D is correct because creating future plans is exactly the goal of prescriptive analytics. It is the category that focuses on the future. The remaining choices are incorrect because they would not be the best suited for strategy formation since they either focus on the past or make estimates of what will happen as opposed to providing guidance for planning.

One of the Areas Where Data Analytics Helps Organizations with Is