Evaluate and Make the Decision by comparing the alternatives based on the objectives. This process is achieved

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Question:

Evaluate and Make the Decision by comparing the alternatives based on the objectives. This process is achieved in Step Four by creating two decision matrices - unweighted and weighted.

STEP 1 Create the Unweighted Matrix

Use a scale of 0 - 3 to rate the first decision matrix. (0 being does not meet the objective well to 3 being meets the objective well).
The decision matrices must have the four objectives and four alternatives from the previous week's discussions.
Explain WHY and HOW Harry derived the ranking of the objectives and alternatives (each of the individual numbers) in the first matrix. Review the House Buying Example.

STEP 2: Create the Weighted Matrix

Assign a percentage to each of the objectives.
These weights must total to 100% for the second (weighted) decision matrix. Remember these do not change for each alternative. but are applied to each objective.
Explain WHY and HOW Harry derived each of the weights for the objectives.

STEP 3: Evaluate

Based on the results of the Decision Matrices, evaluate and analyze all of HH's alternatives and objectives.
State the final decision by explaining and justifying it with the numbers in the matrix. The final decision is based on the matrices
Make sure that all of your steps make sense with one another and fully align so that your final decision completely lines up with the rest of the steps in the process.

PART 2:

Create a report to the internal stakeholders of the company to discuss the decision that you have made regarding moving forward in a way that fixes the financial situation that outlines exactly how you have come to the decision. In your memo, you want to provide specifics, some of which have been established throughout the first 6 weeks of the course. All conclusions, justifications, reasoning's, and explanations must be supported with course material in the form of APA in-text citations (page/paragraph numbers required) and a reference list.

Case Study

Hannah's Hats is an online children's hat retailer with a brick-and-mortar store in Chicago, Illinois. The company has 27 employees and was founded by Harry Hannah in 2015. At that time, Hannah was a single father of 3-year-old twin boys. Hannah's Hats was a success and at the end of 2015, sales hit $ 1 million. The company topped $4 million in sales after the winter of 2020 (mid-March 2021).

Harry Hannah's Story:

Working as a freelance children's clothing buyer, Harry could work from home and be a stay-at-home dad to his twins, Harry, Jr. and Harold. This was important to him and to his wife, Harriet, a software designer whose job involved a great deal of travel. However, on one cold night in November, Harry was contacted by local police who informed him that his wife had been killed in an auto accident. She was returning home after seeing a client in the Chicago suburb of Arlington Heights.

Devastated by the news, Harry did everything he could to keep himself together for the kids. He needed help; he decided to send them to daycare three days a week so he could deal with getting his new life together. Every day Harry noticed the caretakers trying to find the children's hats and mittens when he came to take the boys home. Harry noticed that many of the children had mitten clips that seemed to help reduce the number of lost mittens. The hats, however, were another matter.

Chicago winters are exceptionally bad for children because the wind whips across Lake Michigan and freezes every part of the face that has moisture, especially the mouth. While many of the children's coats had attached hoods, this was not enough. Parents used wool scarfs tied around the children's faces (below the eyes) to stop the painful feeling of the cold. The scarves were awkward and bulky for the children who often pulled them off or dropped them in their travels. Harry decided to design a hat that could be attached with Velcro onto a coat hood or a coat collar and designed to fit closely around the mouth, nose, ears, and eyes of a child just like a ski mask. The hat could be easily attachable relegating the need for scarves to the past. Harry knew the hat could come in a variety of colors and have various child-friendly designs.

Several months passed. Harry discovered that payments from Harriet's workmen's compensation and her life insurance would provide him and the children some financial freedom for years if invested wisely. Harry thought a better way to change his family's life would be to invest some portion of the money in his hat idea. Founded as a small storefront shop near Marshall Fields, Hannah's Hats also developed a loyal following online. Through its creative use of social media, sales took off. Harry expanded his product line to include matching winter gloves and socks.

Beginning in the fall of 2017, Harry, flushed with success from his children's hats, decided that the design could be adapted to work for adults as well. The company invested $150,000 in new designs and inventory for attachable hats for adults. By offering seasonal products for the whole family, Harry thought Hannah's Hats would triple its sales by the end of 2019.

With visions of becoming a destination store like LL Bean's flagship store, Hannah's Hats moved from its old store near Marshall Fields to a large space on the Navy Pier. This cost Hannah's Hats $25,000. Harry also moved the warehouse from a 10,000 sq. ft. space near the old store to a 20,000 sq. ft. space closer to his home in Arlington Heights. This location was considerably further from the store.

As the boys grew older, Harry left most of the work to his staff. He set out to increase the sales through travel and spent most of his time marketing products through several marketing channels. He was determined to have his hats available to every possible cold weather clothes customer. He introduced numerous marketing initiatives, including a partnership with Blizzard Relief, an organization intended to increase awareness of the clothing needs of the homeless during massive cold weather storms.

To sustain these efforts, Hannah's Hats bulked up its marketing staff which consisted of Hannah and three of the employees who worked in a small office within the warehouse. Gradually, the marketing team grew to 5 full-time employees with a dedicated IT person managing the company's website and E-sales orders.

From 2017 to 2019, Hannah's Hats grew at an annual rate of 35 percent. Hannah's talks and marketing pitches to large retailers attracted the attention of two investors. The investors told Hannah that with their help they could grow the company to be a $75 million dollar business. Hannah began to think bigger, "If the investors think they can grow Hannah's Hats to be a $75 million-dollar business, why can't I"? This goal became his new objective. Hannah doubled his marketing trips and went after Walmart and Target to broaden his customer base. Although both companies liked his product, they felt that a cheaper version was needed to meet their target customers.

Hannah continued his heavy marketing plan but despite his effort sales began to flatten. Expenses grew higher, especially with the adult hats. Hannah knew he had to change his plan fast or they would be in trouble. He sought expert help to gain some idea of his company's current position. The following conclusions were reported to Hannah.

Finances:

The rate of overall sales growth had declined from 35% annually to 20% by the end of winter 2020 (mid-March 2021).
The children's hats had increased sales by 11% over the last year.
Adult hat sales have dropped by 20% over the last year.
The company was still growing but at a slower rate.
Operational expenses for the company increased by 8% last year. Much of which was due to increased advertising and other marketing expenses (5% increased operational expenses in the new retail location and warehousing taking up the rest).
E-sales were up by 25% with sales of children's and adult hats being about equal.

Opportunities:

Investor interest
E-commerce growth
Big store interest if a cheaper line were developed
New product line for Summer

Threats:

LL Bean entering the children's market with a similar product
Chinese e-commerce competition with a cheap line

Harry Hannah reviewed the report and instinctively knew that he had to restructure his growth plans. A decision had to be made that would position Hannah's Hats for better growth potential.

Using the information in this case study and the MDQ model, help Harry make his decision and position his business for future growth.

REFERENCES

DISCUSSION

1. Triggers or Opportunity for Decision:
Hannah's Hats is facing several triggers and opportunities that require a decision:

Sales Growth Slowdown: The company's sales growth has declined from 35% annually to 20%, with adult hat sales dropping by 20%.

Investor Interest: There is investor interest in the company's growth potential.
E-commerce Growth: E-sales have increased by 25%, indicating potential in the online market.
Big Store Interest: Larger retailers like Walmart and Target have shown interest but require a cheaper product line.
Threats: Competitors, such as LL Bean in the children's market and Chinese e-commerce competitors, pose threats.

2. Goal Harry Wants to Achieve:
Harry Hannah's primary goal should be to position Hannah's Hats for sustainable growth and profitability. Given the current challenges and opportunities, his goal might be expressed as follows:

Goal Statement: "To develop a strategic plan that ensures sustainable growth and profitability for Hannah's Hats by addressing the declining sales of adult hats, leveraging e-commerce growth, capitalizing on investor interest, exploring new product lines, and effectively countering competitive threats."

3. Examine the Decision Statement "HOW CAN HARRY HANNAH INCREASE PROFITS?":

Validity: While increasing profits is a valid business goal, the decision statement is somewhat simplistic and does not capture the full scope of challenges and opportunities facing Hannah's Hats. It does not address specific issues, such as declining adult hat sales, investor interest, or competitive threats.

4. Best Decision Statement:
The best decision statement for Hannah's Hats should encompass the broader strategic considerations that Harry needs to address.

Best Decision Statement: "How can Hannah's Hats develop a comprehensive growth strategy that optimizes sales, profitability, and market positioning, considering factors like declining adult hat sales, investor interest, e-commerce opportunities, potential new product lines, and competitive threats?"

This decision statement reflects the complexity of the situation and aligns with the MDQ model's focus on making informed decisions that address specific challenges and opportunities.

5. Does the Decision Statement Seek to Solve a Problem or Make a Decision?:
Yes, the decision statement seeks to solve a complex problem. It acknowledges the challenges and opportunities faced by Hannah's Hats and aims to guide Harry Hannah in making informed decisions to navigate these challenges and seize the opportunities.

6. Explanation and Justification for Not Containing Solutions:
The decision statement does not contain solutions because the MDQ model is structured to first define the problem or decision to be made comprehensively. By clearly understanding the problem and its context, Harry can then move on to the subsequent steps of the MDQ model, which involve generating and evaluating potential solutions, selecting the best course of action, and implementing it.

In summary, the best decision statement for Hannah's Hats is one that addresses the multi-faceted challenges and opportunities facing the company. It sets the stage for a strategic decision-making process that will help Harry Hannah formulate a well-informed and comprehensive growth strategy for his business.

Week 4: The decision-making model, the cornerstone of the decision process affords the decision-maker a rational approach to making a decision. BMGT 317 Week 4 Lecture and Readings. (n.d.). https://leocontent.umgc.edu/content/umuc/tus/bmgt/bmgt317/2228/bmgt-317-week-4-lecture-and-readings.html