The decision to pursue a project or to bid on a project is strategic one. Selecting a project is a very important decision that requires a keen understanding of the organizational objectives and a clear understanding of organizational resources, the industry, including its competitive structure.
The reason to pursue a project may be more complex than a simple capital budgeting exercise. Here are some factors which come into play:
· Is the firm looking to break into a new market segment where the project could open doors to new revenue streams?
· Is the firm trying to keep an existing client even though the project under consideration is not very attractive?
· Is the firm trying to block entry to a competing firm?
· Is the project in question a lead-in to a follow-on project?
· Does the project enable your firm to gain some sort of strategic advantage?