- The events that caused HH to make their decision are the following:
At the end of the day, HH wants to select the finest possible alternative.’ Harry must define a precise objective for himself in order to be successful (Objective). One of the company’s declared goals is to reach $75 million in revenue. Before making a decision, Harry must be clear about what he wants and assess the benefits and drawbacks of each alternative. There is no obligation to eliminate uncertainty in order to apply extra analysis to better comprehend it and its consequences for the choice (Uncertainty). It is vital for Harry to be aware of the many biases and traps that he may fall into when acquiring and evaluating data in order to prevent biasing his conclusions.
According to It’s Your Frame 6, one’s viewpoint is created as a result of earlier and current biased attitudes. Avoiding the cognitive bias known as “anchoring,” which occurs when someone adopts a preexisting way of thinking without challenging it, is crucial. Things that performed well when Harry’s store first started but slowed down over time should be avoided in the future. Adult hats were formerly a popular item for sale at retail businesses, but that trend has decreased in recent years. Harry must explain why there has been a fall in the number of adults purchasing hats. The sunk cost fallacy cannot be used to justify Harry’s use of a product that did not sell well in the first place. If adult caps aren’t selling as well as children’s caps, he may want to move his attention to selling to adults rather than children online.
2. The primary objectives that HH must achieve because of the decision are the following:
Putting more focus on internet sales is a good starting point According to the National Retail Federation, online sales of adult and children’s headgear increased by 25% last year. Harry should spend his time and energy on creating new revenue streams that will create money for him. Through ecommerce, Harry is able to reach a wider audience, and internet marketing allows him to keep his brand in front of those people. As his business expands, Harry will be able to serve even more people in the future who require his hats. Harry’s revenue objective of $75 million will need a greater reliance on internet sales. The only thing that is likely to happen because he will improve customer awareness of his brand is that he will spend money on advertising.
Wherever feasible, Harry should avoid the sunk cost fallacy. He should not be concerned with items that are undeliverable because he will sell any unsold items from his store to buyers online. Adult hats are an outstanding example of this. His website has the potential to reach a wider audience than his actual store ever could.
LLBean and Chinese imports, among other things, are threatening Harry’s market share. To combat this, he must focus on building a strong brand identity. If his goal is $75 million, it is possible to reach a bigger number of individuals online rather than only through in-store sales. Online sales are steadily expanding as a result of the convenience that the internet provides. Harry must take the following precautions to prevent having his future income decisions impacted by the anchoring bias:
Finally, Harry must discover methods for lowering his financial outlays. Harry’s expenses increased by 8% the previous year. This increase in spending might be ascribed to the relocation to a new location as well as additional inventory in the warehouses. If Harry wishes to reach a broader audience, it is suggested that he open a few physical locations and make his products available online.
The following are the connections between the MDQ model phases and the decision statement:
With his data collecting experience, HH can utilize this knowledge to assist him make the best decision for his organization. Because his research would be skewed, he must draw on his prior knowledge while being open to new avenues of investigation.
4. Survey and Make a Decision – Evaluate all aspects of the decision and conduct a thorough analysis. HH is considering investor partnerships and retail partners to help accomplish their goal of achieving the desired sales growth.
While quantifying what matters is challenging, decision-makers should remain focused on what is important in the option. Develop new and better alternatives by coming up with new and innovative ideas for alternatives. If Harry wants to evaluate decisions consistently and explicitly, he should take key performance disparities (trade-offs) and critical uncertainties into consideration. Determine which data collecting and modeling tasks should be prioritized and simplified in order to develop an effective knowledge base. There are, however, some characteristics that are better or worse than others under specific situations. It is necessary to identify the “things that matter,” define the objectives, break them down into means and ends, establish an objective hierarchy, and test his objectives to verify that they are effective, among other things, throughout the five primary steps of determining objectives. In order to achieve his aim, Harry collaborates with larger firms in order to acquire an arrangement that permits his items to be sold in their stores as well as on the Internet. Because he would be working for an employer, he will have to cope with the reality that he will be required to share in the profits he makes. With all of the possible repercussions of going corporate, he may find himself unable to devote sufficient time and attention to his business.
5. Evaluate the Choice’s Impact – HH should contrast its chosen style to increase sales.
Use social media to his advantage.
The promotion and marketing initiatives of Hannah’s Hat resulted in a rise in operational expenses. Among the reasons for this is the fact that social media sites such as Instagram and Facebook are completely free to use. Social media takes up 77.5 percent of Generation Xers’ available waking time, compared to 48.2 percent of Baby Boomers’ waking time. Advertising to certain demographics may help to raise brand awareness, reduce advertising expenditures, and reduce the overall amount of money spent on promoting a company’s image.
Development of New Products
Growing a business is possible through the improvement of existing products or the production of new products for the same market segment. Despite the fact that some people love the appearance of Hannah’s hats in cooler weather, they would want them to be thinner in hotter weather because they are solely intended to keep them warm. A whole division of the company will be capable of producing hats for those who live in hotter climes as a consequence.
It’s Your Choice. (2020). Creative Alternatives. Episode 11. Retrieved from https://www.decisioneducation.org/its-your-choice-episode-11
It’s Your Choice. (2020). How Likely Is It? Episode 14. Retrieved from https://www.decisioneducation.org/its-your-choice-episode-14
Shewan, D. (2019). 25 Ways to Increase Online Sales. Retrieved from https://www.wordstream.com/blog/ws/2016/02/03/increase-sales-online
MasterClass staff. (2020a, November 8). The Importance of a Decision-Making Process. MasterClass. https://www.masterclass.com/articles/how-to-make-informed-decisions#7-steps-of-the-decisionmaking-process