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Understanding Bias in Business Decision Making

All people, even the most experienced leaders are subject to their own biases. Understanding what a bias is, and your own personal biases is key to being able to mitigate them and make more objective and effective decisions. In my career as a Physical Therapist, we are required to complete continuing education that pertains to implicit bias every 2 years to renew our license to practice. This helps us to treat our patients fairly. In the face-paced world of business, the ability to make objective decisions may determine the success or failure of an organization. The following shall discuss the different types of biases that can affect business decision making, the impact bias can have on business, and a few strategies to mitigate biases.  Confirmation bias occurs when a person making a decision favors information that confirms a hypothesis or preexisting belief and may look like a manager seeking out data that supports their preferred strategy (Soll, et al., 2015). Anchoring bias h...
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Operations Management: What is it?

Operations Management (OM) aims to achieve higher profitability for a company or business. This can be achieved in a multitude of ways, however, generally centers around implementing business practices aimed at achieving the highest level of efficiency possible (Hayes, 2024). To expand, OM looks to convert materials and labor into goods and services as efficiently as possible and is essential for balancing cost with revenue to attain the highest possible net profit (Hayes, 2024).  A Few Key Concepts in OM Process design and management involves the implementation of processes that produce goods or services, and effective process design ensures operations run efficiently (Belyh, 2019). For example, in healthcare we call this an SOP or standard operation procedure and they are constantly being revised for efficiency. Supply chain management involves the flow of goods and services from suppliers to customers and encompasses logistics, procurement, production and distribution (Hayes, 20...
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Understanding the Valuation of Stocks

How do we make the most informed decisions when it comes to investing? One important aspect is valuing stocks. The following shall cover some of the concepts and methods used to value these equity securities.  There are two categories of valuation models for stocks: absolute valuation and relative valuation (Nguyen, 2024). Absolute valuation models attempt to find the "true" value of an investment based on dividends, cash flow or growth rate for a single company and does not take into account other companies (Nguyen, 2024). A couple absolute valuation models include the dividend discount model and the discounted cash flow model and included in the relative valuation models is the price-to-earnings ratio (Nguyen, 2024).  The dividend discount model (DDM) values a stock by assuming that dividends will grow at a constant rate indefinitely and is particularly useful for companies that pay consistent and predictable dividends (Chen, 2024). More specifically, the DDM is a quantitat...
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A Comprehensive Guide to Analyzing Financial Statements

To assess a company's financial health, performance, and future prospects, financial statement analysis is critical (Kenton, 2024). Internal and external stakeholders use the aforementioned analyses to evaluate business performance and value (Kenton, 2024). The following is intended to guide you through the multiple facets of financial statement analysis, including the types of financial statements, three analysis techniques, and lastly, a few practical applications.  There are three types of financial statements, each with its own purpose. The first is a balance sheet. This statement provides a summary of a company's financial position at a specific point in time and provides its assets, liabilities, and shareholders' equity (Kenton, 2024). As the name implies, the balance sheet should balance, and assets should equal the sum of liabilities and equity (Kenton, 2024). The second, is an income statement. An income statement, or profit and loss statement, provides a company...
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Product Positioning

The perception of a product relative to its competitors in the market is product positioning. This strategic process involves differentiating your product and orienting it with the desires and needs of your target market (Murphy, 2024). Effective product positioning takes into account a few key elements. Understanding the market landscape through market analysis is the first. Analyzing competitor strategies, market trends and customer demographics should be the first step in product positioning (Appinio, 2024). Identifying the preferences, needs and behaviors of your target market/audience is the second (Appinio, 2024). Determining your unique selling proposition (USP) and assuring it is compelling, clear and relevant to your target market is third (Murphy, 2024). And lastly, your positioning statement should address your benefit and value concisely to your target market (Murphy, 2024).  There are four strategies for effective product positioning including quality-based positioning...
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The Value of Market Segmentation

To compete and stay relevant in the business world today, understanding you customers is powerful. One way to gain this understanding is through market segmentation. Categorizing a broad consumer market can help businesses meet the needs of their customers more effectively. The following shall explore market segmentation and how it can benefit your business.  What is Market Segmentation? Market Segmentation is the process of dividing a market into smaller groups with distinct characteristics, needs, or behaviors that may require separate marketing strategies or mixes (Karri, n.d.). To maximize profit the goal of segmentation is to identify the segments that are likely to be the most profitable. For example, in the portrait photography business, family shoots such as fall minis can earn you profit however, headshots are likely to earn you more. These segments of customers look very different and so does how you target them with marketing.  Types of Market Segmentation There are...
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Marketing Mix: The Four P's of Marketing

How can businesses begin to build a solid marketing plan? To achieve marketing success, businesses can use the four P's of marketing- product, price, place and promotion- to deliver what customers want at the most attractive price (Novak, 2024).  The first P is for product. There are a variety of products ranging from a service to an experience to a physical or digital product and is the actual item being sold (Novak, 2024). In my small side business performing portrait photography my product takes different forms. I sell digital photos, physical photos, and an experience. It is important to differentiate your product from your rivals especially, in a highly competitive market. A solid marketing plan should outline who your target audience is and key features of the product including what makes it unique, its safety, sustainability, design, packaging, quality, adaptability and production (Novak, 2024).  The second P is for price. Businesses must price their product in a way th...
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