New Industry Entry Decision based on Risk Decision-Making Model

With the rapid development of the world's economy, many companies have to face new challenges. Thus, a few of them decide to leave their initial industry and try to explore new industry, trying to find new profit growth rate. However, during the process they encounter many potential risks. In the end, some of them may disappear from the market. This paper focuses on new industry and the characteristics of its entry process. Based on the thought of queuing theory, risk decision-making model of new industry entry is constructed. Due to this model, the instant expected profits and the optimal entry occasion of a company entering new industry during different periods is concluded. Combined with its risk preference and strategic goals, the entry behaviours of a company are analysed. Finally, the countermeasures after entering new industry of a company are dissected. The aim of this paper is to help companies to avoid risk entering new industry rationally.