Read this case study and answer the questions in detail.

Semiconductor Company, Orion Corp. Two University of Toronto scientists developed a product they had been researching which makes semi conductors faster and can be used in super-computer systems. They sell their product to the likes of IBM and other leading hardware companies. The problem is that they only really have one product which may become obsolete. They are still leading the research in the field, but the results are always risky and do not necessarily lead to successful new products. The market for semi conductors is growing at 20% per year. Large companies are investing money in R&D to make them even faster. The raw materials for Orion's product are rare earth elements for which China is the main supplier. These raw materials are converted into semi-finished components, by Konduct Company in Canada, that Orion uses in its products. For political reasons, supplies from China are becoming increasing vulnerable and the supplier there is demanding price increases in the future. Orion has reasonably good relations with Konduct but keeps it at an arm's length. Konduct is considered a critical supplier for Orion. The second, and the last component for Orion's product, comes from TraX Company. There are 5 other suppliers for this component but TraX has the lowest price. Recent developments in technology have the potential to open up the $200 billion military market for Orion's product. It is, at this point in time, to early to confirm this as the new technologies have to be tested by the military and approved. It will take 1-2 years before the military places its orders. The threat of alternative products utilizing new technology and capturing the military market is a real one. If it happens, it will make Orion's product obsolete for this market at least. To help Orion decide what to do, it asked a firm of consultants to give advice on its strategy. The consultants looked at four options: Continue with existing product Get sponsors for research Invest $5 million in research Invest double the amount, $10 million, in research to increase the chances of developing a commercially viable product. and came up with the following data for the next 3 years: Note that Orion does not have enough funds available for the respective research projects. However, it can easily get bank loans for them. Loans are available at 5% interest rate per annum. DATA COLLECTED BY THE CONSULTANTS In $ millions Profit from existing product Additional profit from new products Probability of additional profit coming in from new products Options Continue with existing product 15 Get sponsors for the research 15 7 40% Invest $5 million in research 15 25 35% 2 40% 25% -5 Invest $10 million in research 15 40 30 10 5% 20% 25% 30% 20% 0 -15 Q1. Which option should the company choose based on quantitative analysis of risks/hazards only? Q2. Which option should Orion choose if it is risk averse? Q3. Suppose the risk of competitors developing similar or better products than Orion is rated a level3 (quite likely) with an impact at level5 (very high). Obsolescence is level2 risk with impact of levels and the supplies being affected from the Chinese supplier a level4 risk with impact level3. Now which option will you choose? Explain your reasoning. Q3. Given that risk analysis and business continuity management based on quantitative analysis is generally not enough, what other approaches can Orion use? Explain these approaches and the factors that Orion should take into consideration to make their decision