Strategic Analysis and Decision Making in Business Context

This report examines the core concepts of strategy and decision-making, focusing on competitive advantage and corporate strategy. It explores the implications of being "stuck in the middle" and the challenges of simultaneously pursuing differentiation and low cost. The report analyzes four approaches to corporate strategy: product diversification, product development, market development, and market penetration, outlining the conditions for their effective application. It then delves into the reasons behind the failure of "big deals," highlighting the influence of judgment biases, such as confirmation bias and heuristic processes (availability and simulation heuristics), on decision-making. The report further discusses how heuristic thinking and conjunction probability errors affect a firm's interactions with customers and competitors, and the formulation of strategic plans. The importance of stories in the judgment process and their influence on strategic plan implementation and marketing programs are also addressed. Finally, the report explores hindsight bias and its impact on strategic decision-making performance and evaluations. This comprehensive analysis provides insights into various facets of strategic management and decision-making.

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Running Head: STRATEGY AND DECISION MAKING 0
Strategy and Decision Making
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STRATEGY AND DECISION MAKING 1
1. Stuck in the Middle
When trying to compromise in business or fails to achieve anything, the company stuck in
the middle position when designing product at low costs and do not value about customers
benefit which owns no competitive advantage. The company’s position depends on
profitability and competitive advantage. Competitive advantage is gained from cost
leadership or product differentiation and being in the middle of it is not a good place to get
stuck which makes business unattractive and situations worse and be in a position of below-
average performance so instead of avoiding it, try to make it flexible. The company
competing at a disadvantage is when they are stuck in the middle and if the industry is highly
favorable even when they are stuck in the middle than they can earn agreeable profits. When
the competitors are stuck in the middle, no one is well-suited to force a firm to the point
where price and differentiation become incompatible.
2. Approaches in Corporate Strategy
The corporate strategy helps in product diversification, product development, market
development, and market penetration to achieve competitive advantage. Product
diversification approaches h helps in the organization to have a wide range of product
availability which allows them to target large customer segment and hence it provides a
competitive advantage to the company. Market development approach helps in increasing the
sales volume, profitability and attracting customers which provides a competitive advantage
in the market for the company. Market penetration approach helps in enhancing the customer
base and sale volume developing the specific market to target for competitive advantage.
Product development helps in adding the value in the existing product, innovating new
products, drag more customers and their loyalty which applies to competitive advantage for
the company. The basic condition when these approaches are needed can be more

STRATEGY AND DECISION MAKING 2
competitors in the market when there is a need to increase sales and for attracting more
customers and to target market and for price control.
3. Big deals failure
Creating a new value for shareholders fails when company is not able to deliver the
intentional objectives, uncertainty, digital demands, lack of combining and rearranging for
potential efficiencies and cooperation, poor structure and integration, insufficient focus and
realization are the reasons for failure as it is easy to overpay for a target than to bargain,
arrogance, company reasons and difficult to execute and is time consuming problem. Bias
judgment is of decision making, belief, and behavioral biases because of business decisions
and human behavior in a specific condition or situation where the decision is affected by
confirmation bias.
4. Heuristic judgment process
The heuristic can speed up the problem and the decision-making process by introducing
errors or inaccurate judgments. Availability Heuristic is when it is easier to recall the
consequences of something; the greater those consequences are often judged to be and are
effective for making profitable decisions and objective to achieve through self-restriction.
Stimulation Heuristic is when the tendency to judge the frequency of an occurrence by the
imagination or possibility of any happening and if effective for drawing attention to the
alternative facts and realistic beliefs.
5. Filling in the gaps
Filling in the gaps by applying shortcuts is heuristics thinking which is used everywhere
in the company, collectively, across the boundaries or on an individual level to solve
problems and for making judgments quickly and efficiently where it helps in shortening the

STRATEGY AND DECISION MAKING 3
decision making time and allowing people to function. The company can interact with its
customers by providing them the products they need or demands and with competitors by
launching a product with innovation and making a customer base. It is important to give
quick responses to changes in environment which shows the responsibility towards customers
and competitors. An affective large-scale organization gives importance to customer and a
subjective system emphasis more on competitors. The company with low market share has
much responsibility to make low entry barriers for new competitors. They need to create an
environment where they can compete with competitive advantage and for that they have to
make interactions for how to use resources and what can affect the decision at marketplace.
6. Conjunction probability error
Conjunction error is where the probability of a joint event is more than the probability of
any events alone where people can easily apply the conjunction rule to transparent problems.
Individuals have difficulty because they do not correctly differentiate tasks and apply
incorrect diagnostic reasoning to a prediction task. Conjunction probability error in
interactive marketing with customers is because of enabling, setting and delivering the
promise externally by not providing quality to individuals but in groups. Formulating
strategic plan goes with trial-and-error and failure which means to fail fast, learn fast and fix
fast which requires a highly strategic plan framework, needs experiment and fixation and to
imagine future scenarios, implications and to give them realistic reply as opposed to
extracting, manner. The conjunction error is the reason of any fault done depending on the
general conditions and shows a better outcome when there is a probability with the situations
of two conditions.

STRATEGY AND DECISION MAKING 4
7. Stories
Stories are important in business or in the market for human experience and for decision
making and knowing the information about the past experience of the firms, their previous
competitors, their strengths and weaknesses to notice the growth of an organization to judge
the strategic plan and its interactive marketing. Strategic plan implementation can be
influenced by these through cooperation and efficiency because of sharing decision making,
communication, cost leadership, and product differentiation and prioritizing the strategies.
Marketing program is influenced to understand the tools, for connecting people and engaging
customers effectively which keeps your business alive and convince people, which even
increases the social media marketing and it’s easy to convey, making the brand as the leading
one and touching the emotional sentiments of the customers and keeping them loyal towards
the brand because of connectivity and is powerful to be judged and an important tactical tool.
8. Hindsight bias
The likelihood of people to view affairs as more expected than they really are where
before an event takes place, to offer a guess as to the result when there is no way to actually
know what is going to happen. In other words, hindsight differs from foresight; the viewpoint
of I knew it all along. The hindsight bias prevents from knowledge and evaluative thinking. If
an individual cannot allow forecasting as wrong, then it can never be right in same situations.
The evaluation is about the quality of the processes by which strategic decisions are subject
to the manipulating effects of hindsight bias where analysts ask individuals to forecast the
likelihood of some approaching events and at some part group of members is not provided
with the answers to definite problems but asked to forecast their chances of supplying the
correct answer compared to the group provided with the right answers initially to their
forecasting. This bias is applied to business forecasting of financial variables and to new

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business ventures; hindsight bias directly applied to strategic management differed only in the
outcome information of cases when analyzed where at first they provide negative outcome
and on other the negative outcome and on the quality evaluations the decisions were made.
The favorable outcomes rated the initial decision as less risky and more attractive; hindsight
bias needs more work exploring in strategic management. Characteristics unique to strategic
decisions should be reviewed and research with professional strategic planners should be
conducted. Hindsight bias gives hint to learn from past strategies and hampers the ability to
evaluate strategic decision-making performance and strategies.