Spin Master free essay sample

1. Describe the key decisions that Harary, Rabie, and Varadi faced in the start of their company. Looking at the decision environment, were these more programmed or non-programmed decisions types? Spin master adapted to several strategies from which they gained a lot of success along with some which led them to being unsuccessful. Harary, Rabie, and Varadi started this company â€Å"spin Master† with the intentions to generate a set of long-term brands and be able to sustain a permanent place within the global toy market. Since this was the start-up of their company the 3 friends were faced with having to make key decisions. Firstly, they had to figure out a way to introduce the product they had made and find a way to market that product. Spin Master soon accomplished this by the company called Roots Canada LTD. this company was a perfect match for the product because they both followed a similar theme, â€Å"urban adventure image† both being environmentally friendly. We will write a custom essay sample on Spin Master or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Secondly, they were faced with having to figure out how they were going to manage the enormous order that they received from K–market. This led the 3 entrepreneurs to come together and make a decision on moving from their small kitchen production to a factory with larger accommodations so that it was fit for their 200 working employees and so that they were able to start the production of such a large order. Lastly, the biggest and most important decision they were faced with was having to create a new product that would be as successful as their first, â€Å"the earth buddy† they had to be innovative and think of a product that would be as captivating as the pantyhosed sprouting head. This was resulted with the production of the devil sticks that were a very big success in its first 6 months and gained them $1. 8 million in sales. Since Spin Master was a new company and had been built by 3 friends from University, all the decisions of the company were made by the young new entrepreneurs, which led them to make some very risky decisions for the company. Looking at how the company’s decisions were based on a risk environment and how they were faced with unstructured problems, the company made more non-programed decisions. Spin Masters decisions were being made by the young entrepreneurs, they were neither structured problems nor did they occur over and over again and because these decisions were being made for the first time as the earth buddy was the first product that the 3 entrepreneurs thought to release it brought for them unstructured problems which had to be solved by meeting the demands of the unique situation at hand leading them to making more non-programed decisions over programmed decisions. 2. As a result of Spin Master’s success, which decision errors and traps might be a problem for them in the future? As a start-up company Spin Master has had many successful achievements, however there is still a chance for them to encounter problems in the future resulting on a negative impact on their companies’ outcome. One of the problems that they may encounter would be the representative heuristic. This heuristic is about decisions being made based on similarity to others situations. This eventually could cause Spin Master a problem in the future because they may make decisions based on representativeness of their previous successful products. Since this heuristic helps one to come to a decision rapidly, it may lead the company to make errors or even over evaluate the probability of their future products. To stay clear of this error the company should comprehend that prior knowledge of a success product will help them create innovative products but might not result with the same outcome as their previous one. Another problem for spin master in the future could be the availability heuristic. The use of this, decisions being made based on recent knowledge and incidents that they have, may lead to unsuitable resolutions because their current information may not be applicable with the new products that they are dealing with now. Spin Master is a company that is known to establish successful product to its consumers. This, results Spin Master to make new profound decisions and increase effort in making a new product. However, this can eventually lead the company into a trap called escalating commitment, this is when a company chooses to continue a course of action even though it is not appropriate for the situation at hand. Keeping this case in mind, Spin Master may actually want to continue to make their decisions based on the way they were made in the past because they were successful with their pervious products, however this validates that they choose to take the same extent of risk that they took with their other products. This could possibly be a future problem because if the product is not similar to the ones previously made then the same solution or method may not apply to an entirely different product even though they might perceive it to be similar as to their rest.