• Discuss the triggers or opportunity pushing Hannah's Hats (HH) to make a decision.
• Identify the goal Harry wants the decision to achieve in making this decision. (Later on in the model, HH will create specific objectives it wishes to accomplish in the final decision)
• Examine the following decision statement: HOW CAN HARRY HANNAH INCREASE SALES?
• Discuss the validity of this decision statement. Why is this the best decision statement for HH? Defend and support your discussion. Your logic and argument must be clear and based on the MDQ model as well as the case study facts. If it is not supportable from the facts and the purpose of the model step, it is not considered logical.
• Does this decision statement seek to solve a problem or make a decision? Why?
• Explain and justify why a decision statement would not contain solutions.

BRAINSTORMING CASE STUDY 

Hannah’s Hats

Purpose

Hannah’s Hats is a case study that will be used in Weeks 4 – 7. The purpose is to make a strategic business decision using a decision making model. Harry Hannah needs to make a decision that will keep his hat sales growing. The brainstorming exercises serve the purpose of strengthening your critical thinking, research, communication, and data evaluation skills.

What are the outcomes for this case study exercise?

To apply the basic steps of the MDQ model

To understand how the MDQ model works in making an effective decision

To understand the reasoning behind each step of the model and the final decision that results from using the model

To understand how collaboration benefits the decision maker in each step of the model as well as the final decision

demonstrate the use of collaboration to help determine the final decision

To analyze, evaluate and explain all decision factors and the stakeholders that are affected by each step of the model

CASE STUDY

Hannah's Hats is an online children’s hat retailer with a brick-and-mortar store in Chicago, Illinois. Founded in 2015, at that time, Harry was a single father of 3 year old twin boys. After five years in business, sales were $1 million. With 27 employees in 2020, the company topped $7 million in sales.

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 having 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 decided to send them to day care three days a week so he could deal with getting his new life together. Every day, when picking up the boys, Harry noticed the caretakers trying to find the hats and mittens of the children. Harry noticed that many of the children had mitten clips that seem 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 face (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. It was designed to fit closely around the mouth, nose, ears, and eyes of a child similar to a ski mask. The hat was easily attachable, eliminating the need of a scarf. Harry wanted to offer 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 them 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 into a popular online store. 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 was so successful in children’s hat market that he decided to adapt the design for adults. 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 double their sales in three to five years.

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 20,000 sq. ft. 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 sales by traveling and spending most of his time marketing projects through numerous marketing initiatives. 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 increased its marketing staff that consisted of Harry and three of the employees who worked in the warehouse. Gradually, the marketing team grew to 5 full-time employees. Additionally, Hannah hired an IT person to handle the online store.

From 2017 to 2019, Hannah’s Hats grew at an annual rate of 35 percent. Harry’s talks and marketing pitches to large retailers attracted the attention of two investors. The investors told Harry that with their help they could grow the company to be a $75 million dollar business. Harry 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. Harry 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.

Harry continued his heavy marketing plan but despite his effort sales began to flatten. Expenses grew higher especially with the adult hats. Harry 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 Harry.

Finances:

The rate of overall sales growth had declined from 35% annually to 25%.

The children’s hats had increased sales by 11% over the last year.

Adult hat sales had dropped by 22% over the last year.

The company was still growing but at a slower rate.

Operational expenses for the company had increased by 8% last year. Much of which was due to increased advertising in a more expensive mode (5% and Increased operational expenses with the new location and warehouse taking up 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 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.

this is someones opinion that they want to have included with in it....

Lauren,

That is a very thorough list of the aspects related to the decision statement. Well done! I am curious, what was your interpretation of the course material in relation to this case study that drove his decisions? What inspired your statement that HH’s goal was “… to position HH as #1 brand in the fashion accessory industry”? What do you think inspired Harry Hannah to want those things for HH? When organizing thoughts, I find bullets, lists, and visuals aids helpful. I also made use of them in my response and Dr Nayak later pointed out in response to Sherry Taylor’s post, on September 11,

“It is very important you discuss the material and respond with sentences/paragraphs. This course is based on discussions, which means you have to explain everything in detail and support "why" in your responses. There will be a tendency to want to make lists (we all do this!). You can do that for yourself so that the material is organized, but write out your responses in the classroom because listing does not show your logical reasonings. Refrain from making bullet point lists because it will not meet the requirements of the rubric. :)”

On September 12, Dr Nayak posted a very important comment to the discussion this week, and wording alone clearly advises us how to approach our word usage in our final report. Dr Nayak wrote,

“In the brainstorming discussion for this week, your first post must address ALL of the requirements: triggers, goals, and a discussion on the correct decision statement (which was provided to you in the course). We are NOT solving a problem! Be careful in not using the word "PROBLEM" in your responses.”

Since a decision is the act of analyzing every option available to determine the most advantageous approach to achieve the most desirable outcome and there are multiple ways in this scenario (Eva, 2015). Its important to note this decision will be heavily influenced by the Harry Hannah’s needs, values, and goals which is why my analysis is focusing on quantifiable factors before allowing subjective factors the weighing available options (Dartmouth, 2020). Taking that into account I viewed the Harry's rational behind the changes that caused a 8% increase in operational expenses for the company last year. Considering 5% of the increase was advertising expenses and the remaining 3% due to new location and warehouse closer to his home. Advertising expenses which required additional travel from him despite moving the warehouse closer to home and hiring additional advertising staff. How do you think the way he lost his wife, and the period of financial uncertainty after, influenced Harry’s decision to move the factory closer and hire more advertising employees he recently implemented? What subjective motivations are potentially causing Harry to make biased decisions?

This is a long reply I know, but I find direct quotations are the best way to quickly relay the advise our instructor provides through our discussions.