Strategic Decision Making: Formulation, Analysis and Models

This report provides a comprehensive analysis of strategic decision-making processes. It begins by exploring the complexities that hinder effective strategy formulation, such as ineffective training, lack of resources, and communication barriers. The report then examines the "tools of trade" model, highlighting the importance of organizational abilities, skills, resources, and environmental conditions. A detailed discussion of SWOT analysis follows, outlining its components, importance, and relevance to competitive advantage. The report also delves into the significance of minimalisms for successful business implementation, providing real-world examples. Key differences between goals/objectives and mission/values are clarified, emphasizing their roles in strategic planning. The report analyzes the impact of automatic and controlled thinking in the context of first impressions, and how they relate to product launches, advertising, and supplier selection. The concept of "throwing good money after bad" is examined, along with strategies to avoid irrational behavior and prevent business failures. Finally, the value of various decision models, including Venn diagrams, decision trees, and payoff tables, is evaluated. The report concludes by emphasizing the importance of management theories and practical implementation to achieve strategic goals.

RUNNING HEAD: STRATEGIC DECISION MAKING 1
Strategy and Decision Making

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Table of Contents
Introduction................................................................................................................................4
1. Complexities which hinder the process of strategy formulation........................................5
2. What is the Connection between “Tools of trade”. Why organization ability, skills,
resources, environmental conditions and characteristics are sperate from linkage but
important?..............................................................................................................................6
3. Components of SWOT analysis, its importance and SWOT analysis relativity to
competitive advantage................................................................................................................7
4. Importance of set of minimalisms for successful business implementation. Example of
business houses for showing its importance..............................................................................8
5. Difference between goals/objectives and mission/values? What is the importance of
these in strategic planning?........................................................................................................9
6. The role of automatic and control thinking in the context of this statement “you never get
a second chance to make a first impression”. Also describe it in the context of.....................10
 Racing to get a product to market.....................................................................................10
 Advertising........................................................................................................................10
 Choosing a supplier..........................................................................................................10
7. The phrase “throwing good money after bad”. Why do people have a hard time letting go
and continue in "irrational behaviour"? Explain 2-3 example related to decision making. How
can management avoid the trap of “going down in flames” instead of “stopping the bleed”?11
8. Value of each model in decision:......................................................................................12
 Venn Diagram...................................................................................................................12
 Decision Tree....................................................................................................................12

STRATEGY DECISION MAKING 3
 Payoff Table......................................................................................................................12
Conclusion................................................................................................................................13

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Introduction
In this study there will be a discussion about the strategy formulation and related concepts.
Strategy formulation is the process by which the company can choose the most appropriate
course of action for achieving their objectives. This process provides a framework for setting
goals and objectives. This study will discuss the obstacles which hinder the process of
strategy formation. Apart from this, the importance of SWOT analysis and analysis of various
diagrams like the Venn diagram, Payoff table and decision tree will be discussed in this
study.

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1. Complexities which hinder the process of strategy formulation.
 Ineffective training:
While planning for the formation of any strategy, inadequate knowledge and training
of team members create hinder in the process. However, ineffective training can result
in a low rate of production and can increase the cost of production. Every
organization should empathize on conducting proper training of their team members.
 Lack of resources:
Every organization requires proper resources for carrying the planning process. When
resources are not adequate then it creates a major challenge for the planning process.
Adequate resources are necessary for formulating effective planning procedure.
Adequate resources also help the managers in saving their time and other costs.
 Communication barriers:
Communication is the common key to execute any strategy formulation effectively
well. Communication barriers can result in disjointed teams and team losses in
coordination with each other.

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2. What is the Connection between “Tools of trade”. Why organization ability,
skills, resources, environmental conditions and characteristics are sperate from
linkage but important?
Tool of trade are connected which each other in various ways because this term is
commonly utilized in liquidation law to figure out what property an individual would
ordinarily use to bring home the bacon, as things that are devices of exchange are
independently excluded from connection with an extra sum over that typically given
for an individual's property.
Organization ability, skills, etc are separate from linkage but it is so important
because of its attribute of time management and resource management. Due to these
two attributes, an organization can conduct effective and efficient operations in
various ways. Leakage which are connected with a data breach is extremely harmful
because it poses a serious threat to an organization.

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3. Components of SWOT analysis, its importance and SWOT analysis relativity to
competitive advantage.
SWOT analysis has four components:
 Strength
 Weakness
 Opportunity
 Threat
Importance of SWOT analysis:
 Evaluate the business environment:
By the help of SWOT analysis, an organization can evaluate the business environment
and helps in strategic decision formulation.
 A SWOT analysis brings light on the health of the business:
SWOT analysis judges the performance of the business among the industry. It helps
the business owner in understanding about the fitness of the business environment.
 Helps in developing business survival:
By using the SWOT analysis, the management of the company can make their long
term and short-term business goals. On the basis of upcoming opportunities and
available threats in the market.
Competitive advantage
Comparing the business performance with its competitors provides an edge over the
competitive advantage. Another advantage is that SWOT analysis helps in identifying
upcoming opportunities and early warning signals.

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4. Importance of set of minimalisms for successful business implementation.
Example of business houses for showing its importance.
An increasing number of business houses are adopting minimalist practices in order to
accomplish their goals related to the business house. Minimalism is not a case of any other
strategy rather than acquiring a great number of quality and removing distraction from the
business that hinders the performance. Minimalism consists of the strategy of minimizing
great numbers of pursuits. It contains emergent shifts in social context towards the consumer
culture.
For example, Minimalist online business is extremely easy to start and require only minimum
investment. On the other hand, the offline business model includes high complication and
high investment. Online websites like Target.com and Amazon.com are the example of
minimalist online business.

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5. Difference between goals/objectives and mission/values? What is the importance
of these in strategic planning?
The mission is a general proclamation of how anyone can accomplish their vision. Goals are
a progression of methods for utilizing the values to accomplish the vision. Objectives are
articulations of what should be practiced to execute the technique. These can also be called as
explicit activities and timetables for accomplishing the objective.
Goals and values are important in strategic planning because it provides a direction to the
team members. Strategic planning is a useful method for generating effective decision-
making moves and evaluating the progress of the business. This planning uses realistic,
quantifiable benchmarks and researches for analyzing results. Goal setting is the part of
strategic planning because it helps the management in providing an outline in evaluating
operational and competitive environment efficiency.

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6. The role of automatic and control thinking in the context of this statement “you
never get a second chance to make a first impression”. Also describe it in the
context of
 Racing to get a product to market
 Advertising
 Choosing a supplier
Automatic thinking in the context of above points refers to the first impression created in
the mind of a person or consumer when they for the first time comes in contact with the
business. On the other hand, control thinking in the context of above points implies if any
consumer makes up his/her own thinking by seeing an advertisement or hearing about the
company with anyone. Control thinking means the thinking of a person that they made
before coming in contact with the company.
For bringing a product in the market, business houses should first describe the importance
of the product in market. After that when consumer visit to the stores then great
hospitality will influence their automatic thinking in a positive way. The same method
goes while advertising for the product or service also. An organization while conducting
advertising should make sure that they make up the market favorable for them. They
should include how this product will satisfy the need of people and the importance of this
particular product.
Influencing supplier is extremely tricky for any company because the supplier knows
about the market condition very well. For setting the automatic and control thinking of
supplier, a company should offer them high-profit margins on the product.

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7. The phrase “throwing good money after bad”. Why do people have a hard time
letting go and continue in "irrational behaviour"? Explain 2-3 example related
to decision making. How can management avoid the trap of “going down in
flames” instead of “stopping the bleed”?
People face a hard time letting go because they keep remembering the same thing again and
again in their subconscious mind. Remembering the same thing creates a repetitive pattern in
their mind. After some time their thinking becomes irrational because they do not listen to
reasons, logic and not even use their common sense. The reason behind continuing irrational
behaviour is people create a fixed pattern of thinking in their subconscious mind and when
time approaches for change they refuse the change and become addicts to same old thinking
pattern.
Management sometimes faces struggle and losses that cause a bleed in their system. In order
to do this, they should stop that bleed instead of going down in flame. For stopping this bleed
they need to adopt management theories, practical analysis, debt restricting, improve product
quality and should focus more on improving their online marketing strategies.
Example of stopping the bleed are: while advertising process, while producing any product or
while recruiting employees. Management should be careful for stopping bleed while doing
these few processes.